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The end of performance reviews?

The end of performance reviews?

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The end of performance reviews? Don’t bet your life on it.

In 1897, a journalist was sent to inquire on a rumour Mark Twain was near death. In fact, it was Twain’s cousin who was very ill.

Twain recounted the event in the New York Journal of 2 June 1897, giving birth to much repeated (but often misquoted) words “the report of my death was an exaggeration”.

I find myself feeling much the same way in relation to the recent surge in reports about the growing list of reputable firms renouncing performance reviews.

Examples include:

• National Australia Bank will apparently be the first of the big banks to “free” 43,000 of its staff from the formal performance review process.
• Accenture confirmed it will disband staff rankings and annual evaluation starting in the financial year 2016.
• Last year SEEK phased out its half-yearly performance reviews in favour of “ongoing honest conversations” (which makes me wonder – were the previous conversations dishonest?).
• Deloitte’s staff are apparently “ecstatic to escape the scourge of performance reviews and forced rankings”.

The case for the prosecution goes something like this:

• No one likes annual performance reviews – they are hated equally by employees and supervisors alike.
• For many employees, the performance review is a dreaded moment when they feel unappreciated, or when they discover their key performance indicators are somehow mysteriously changed without being told.
• For supervisors, reviews are seen as a waste of time, a task that needs to be done as quickly and expeditiously as possible.
• For some, they are also uncomfortable moments where that difficult conversation they had been putting off for months is finally confronted or, more usually, avoided again;
• Existing evaluations are cumbersome and expensive and the outcome is not great.
• Reviews are fixated on the past instead of considering what employees should do going forward.

Dig a little deeper into the plans of most organisations that are moving away from performance reviews and what you find is they are not actually dispensing with the process of providing feedback.

What they are actually doing is addressing one or more of the following perceived flaws in their current approach.

Frequency

Part of the backlash seems to be driven by the frequency of feedback between managers and employees and the fact that it being a once or twice a year thing is insufficient. I absolutely agree that if feedback between managers and their reports is only happening this infrequently then there is no way that optimal performance can be the outcome. Why store up a suggestion on how performance can be improved for up to 6 months when it can be delivered now?

Open, regular feedback on performance is best practice and should be business as usual for all people managers, but that shouldn’t rule out a more structured reflection and accountability against goals on a semi-annual basis.

Rating systems

Another area of angst for managers and employees alike is rating systems. As an HR practitioner I share that angst. In particular, I view forced rankings, where all employees are ranked onto a ‘normal’ distribution and where there are a fixed number of 1’s, 2’s, 3’s etc as absolutely toxic and destructive to a performance based culture and teamwork. For example – if there are only a fixed number of 1’s, and the rating corresponds directly to reward outcomes, then human nature suggests that people will compete for those outcomes, generally at the expense of collaboration and team work.

But a high performance business must differentiate rewards/advancement etc based on performance.

At GPT our approach is a “justified rating”. That is, where a manager needs to justify a rating outcome. These are no arbitrary or set limits on the amount of ratings at each level. In a good year, you would expect that more people will have achieved their objectives and performed well than in a bad year, so there may be more good ratings that year than others.

Justified ratings work particularly well when there is a rigorous process of peer review to reach a consensus. At GPT, the Leadership Team do this as a group and review the ratings of each other’s teams and hence the business as a whole, and I can tell you that there is plenty of challenge on rating outcomes before they are finalised.

Distilling an entire year’s work to a rating can feel impersonal and blunt, but that is where manager discretion and feedback is particularly important (more on this below).

Manager feedback

Sports psychologist Dr Bob Rotella, in his book “How Champions Think”, says “people who are trying to be the best get used to tough evaluations”.

It’s an interesting fact of life that many of us are OK with tough evaluations when we are playing sport – sometimes delivered at high volume from a coach on the sidelines! But we are much more sensitive to tough evaluations delivered in the context of the workplace.

In my opinion, too many people operate at work behind a veneer of perfection / competence where they are unable to admit mistakes and/or unwilling to accept feedback. You can tell who they are – their careers are stalled and the problem is always “out there”, with their boss, their team or the company. They never take personal responsibility or have the humility to accept that they might need to take on some feedback to improve.

This also requires managers to be more forthright and direct. Part of the problem is too many people managers see the ‘manager’ part of their title as a noun, when it should really be a verb.
Former Commonwealth Bank of Australia HR executive and Australian Human Resources Institute board member Rhonda Brighton-Hall said the effectiveness of a performance review often depended on the quality of the leadership rather than the form in which it takes place.

“If your leaders can’t have a good conversation every six months and twelve months, those leaders won’t be able to do it on a regular basis,’’ she recently told the AFR.

Performance conversations – whether it is a semi-annual formal review or just a regular conversation – can be improved significantly by getting better at providing constructive feedback.

Good constructive feedback is:

• Given with the goal of improvement
• Timely
• Honest
• Respectful
• Clear
• Issue-specific
• Objective
• Supportive
• Motivating
• Action-oriented
• Solution-oriented

A fantastic example of this from pop culture can be seen on the high-rating Channel Nine television program “The Voice”.

Contrast the style of feedback provided by Jesse J with that of the other coaches, and keep in mind the characteristics of constructive feedback outlined above. Invariably you will find that the majority of the feedback from the other coaches is supportive at best, whereas Jessie J’s hits so many other aspects. She’s been an immensely successful singer, but if she ever loses her voice I would have my money on her being an excellent manager of people.

Performance reviews, whether done semi-annually as a formal process, or once a week as part of a catch up with our manager, are here to stay. The question is – as managers and employees – do we have the courage and humility to say what needs to be said, and then act on it?

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