Performance Review Hooey, or 4 Ways to REALLY Build Business Success

123RF Stock Photo
123RF Stock Photo

It’s that time again when organizations are abustle with performance grading, self reviews, rank ordering, goal setting, final performance evaluations, and merit pay raises all in the name of managing performance.

The amount of activity and anxiety the performance review process produces could make last minute Christmas shopping look like a seasonal stress reliever. So what’s all the fuss about?

They say that if managers don’t do end-of-year performance reviews, people won’t work hard enough at their jobs; it’s a last ditch effort to hold people accountable. Really? Is that what we believe about our so-called greatest assets?

Managing performance is at the bottom of the list

Well, not everyone. And get this: some of those doubters are the same zealots who hound you to turn in your performance reviews.

While HR leaders clamor for you to do performance reviews in order to hold people accountable, they secretly report in national surveys that they really use them to justify pay increases. In fact, any reasons they give relating to managing performance end up at or near the bottom of the list.

How ironic! Apparently, when it comes to performance reviews, some HR leaders are feeding managers a bunch of hooey. Fed up with it, companies like Lockheed, Adobe Systems, and NASA have pulled the plug on performance reviews. After calculating the time, expense, and lack of return on investment, leaders decided resources drained by doing them could be better used in more productive activities.

Of course, not everyone is ready to break with tradition. A hurdle for some is feeling they have to plug the hole that’s left when the forms are gone and not knowing what to do instead.

Holding supervisors accountable?

Historically, the old review process has been a way to check up on supervisors who weren’t doing their jobs. Bad supervisors had to be told to track results, give feedback (particularly when things weren’t going well), and prove they were complying by turning in a form for each employee at the end of the year.

Letting them off the hook by telling them they no longer have to do reviews seems risky. If they stop doing reviews, how would supervisors be held accountable for holding everyone else accountable? Well, to shift to an appraisal-less workplace, we have to first stop thinking of performance management as a way to hold people accountable: then, change how we’re managing.

It sounds strange, doesn’t it? Isn’t holding people accountable the boss’s job? The problem is, holding people accountable simply reinforces employee compliance at the expense of commitment.

It’s this hold-them-accountable mentality that causes organizations to define performance management as an extra half a percent raise or one-point drop on a rating scale as if personal fulfillment at work can be reduced to a level of cheese and electric shocks in a lab experiment. But meaning and purpose — commitment — aren’t produced from simplistic rewards and punishments and holding people accountable for compliance; they come from a sense of ownership for something bigger than oneself.

4 ways to build business unit success

How do we help employees shift their energies away from complying with boss expectations to committing to business unit success? How do we support them taking on meaningful improvement initiatives as their own?

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Four leadership practices will help:

  1. Create team meetings where everyone comes together and determines what the team can do better to confront challenges and contribute to business unit goals. Facilitate rich, collaborative discussions that identify critical team outputs and actions team members need to take to succeed.
  2. Help both the team and individual team members develop commitments that combine to improve overall team performance and contribute to business unit goals. Establish defined goals and tracking mechanisms for commitments.
  3. Make commitments and metrics visible by posting them on walls and places frequented by team members.
  4. Provide regular feedback by holding frequent team meetings where team members solicit helpful information from each other about what they should change to help the team succeed.

You might look at these practices and say you’re organization isn’t ready for that. If so, start with educating employees about the business and their impact on it. Then involve them more in solving problems and deciding how to do the work.

Eventually, you can use these alternatives to performance reviews and stop holding people accountable with implied threats and promises of insignificant rewards through performance ratings and merit pay increases. It will change your conversations about accountability, and instead of conversations about compliance, you will be having conversations about commitment.

Best of all, you can stop wasting time doing all the activities associated with performance reviews and spend your time doing things that actually fuel higher performance.

Trying it on for fit

As an individual contributor, you can take the initiative and start building a culture of ownership, collaboration, and enthusiasm for performance improvements by finding ways to educate yourself and fellow team members about the business.

Start by asking questions to learn the business. Discuss with others how you might work better together to solve a problem or improve team performance. Post your commitments and performance results where they can be easily seen and talked about.

Schedule a regular time to meet fellow team members and ask them what they want you to keep doing as well as what they would like you to change in order to fulfill your commitments and contribute to team goals.

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2 Comments on “Performance Review Hooey, or 4 Ways to REALLY Build Business Success

  1. #1-#3 seem to be your Goal Setting and tracking process. Isn’t #4 (frequent meetings and feedback) your new Performance process? If a team member fails to contribute or perform towards the goal, what happens? How do the shy folks handle this kind of team feedback? I’m wondering if there are folks who just don’t feel comfortable talking in front of a group about what they’ve done (or not done) and how their contributions (or lack thereof) get recognized? I could certainly see this working very well with small groups that have worked together for a long time (low turnover), but wonder how/if you’d do this for larger organizations.

    This is very interesting and though-provoking!

  2. Great comments, Tracy. You are exactly right.These steps ARE your new
    performance process. If a team member fails to perform (fulfill
    commitments or meet team needs), the leader should be having a
    conversation with the individual about the individual’s commitment, and
    at some point, his or her relevance to the business. Of course, team
    members and leaders need to learn the process of giving and receiving
    effective feedback to make this work. A heavy dose of feedback training
    from someone who understands this process is important. I have been
    implementing this process for over 20 years with amazing performance
    results in mostly large client organizations, but also in
    some smaller business units. You might take a shot at building it in a
    team or two as a pilot before you try scaling to larger departments or
    business units so you can apply what you learn along the way before
    making a huge commitment to the change.

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