A growing body of data suggests that the traditional annual or twice-yearly performance appraisal may have outlived its usefulness. Today, information is both transparent and instantaneous, goals are mutable, and organizations of all kinds are ditching the paper trail. Managers and employees alike are looking for less formal and more frequent touchpoints to check in on progress, development needs, and engagement.
So what might a business world in which the performance appraisal is “dead” look like? What types of tools and processes present themselves as more effective in 2017?
FROM DREADED, OUTDATED, AND INEFFECTIVE…
The problems with performance appraisals are wide-ranging… and widely acknowledged. Historically, both managers and employees dislike them. Not only do they frame the conversation in a way that underscores the power differential, they place the burden of “policing” the process on managers (and on upper management and HR, who “police” managers by chasing down delinquent forms). They have also been more “rearview mirror“ (focused on the past) rather than “windshield” (focused on plans to develop employees’ skills and engagement).
During my public speaking engagements for audiences large and small, when I ask for a show of hands from those who love the performance appraisal process, it’s not uncommon that not a single hand goes up. But leaving aside the fact that many organizations’ annual review processes are perceived as cumbersome at best and a waste of time at worst, do they have real value in driving performance? Over the past several years, the answer seems to have become “no.”
The overarching problem with a yearly or twice-yearly conversation is that it is always dependent on trailing indicators. The employee’s achievement to date is measured against quantitative goals … set months prior. Rare is the objective-setting session that uses attributes like quality and value alignment as metrics. The result is that neither the employee’s nor the manager’s perception of performance is entirely relevant, which makes it all the more susceptible to bias.
Perhaps more tellingly, goals set in January are subject to change as new organizational realities exert their influence on priorities, and may have entirely fallen by the wayside by November or December of the same year. In a best-case scenario, what often happens is that the manager must give the employee he or she is reviewing a “mulligan” of sorts, because the goals are dated. What happens then? The goals are either scratched, or simply pushed into the next review period with little revision.
If we acknowledge that the dynamic nature of today’s workplace has rendered performance appraisals ineffective, how can we evolve toward a more applicable and less onerous process? One answer may lie with the work preferences of the workplace’s younger generation.
… TO INFORMAL, FREQUENT, AND BRIEF
It’s been frequently noted that Millennial workers thrive in environments that offer frequent, broad feedback, rather than the usual yearly “deep dive.” While it may be tempting to characterize this preference as a generational quirk, it’s important to bear in mind that while older cohorts might expect a traditional performance appraisal, that doesn’t necessarily mean they wouldn’t also benefit from more frequent and less formal touch points throughout the year. In addition to frequency, brevity seems to be attractive to both managers and employees burned out by the same old lengthy, bureaucratic forms.
Key to this shift is a renewed focus on the critical relationship between managers and employees. According to Gallup, a whopping 70 percent of an employee’s engagement is dependent on satisfaction with their manager. Now more than ever before, “people managers” who exhibit empathy and truly get to know their employees are in high demand. In fact, a Kenexa global study reports that the #1 driver of organizational wide employee engagement is caring about the wellbeing of employees. Strengthening communication between managers and employees has never been more important. It is a necessary step in demonstrating empathy –something that the once-a-year performance appraisal simply doesn’t accomplish. In this new model, frequent, brief, high-quality communication is at a premium. So how might performance appraisals be deconstructed to support this goal?
FIRST, DITCH THE NAME… THEN, DITCH THE RANKING
As mentioned above, the very name “performance review” or “performance appraisal” has an intimidating ring to it. It highlights the hierarchical nature of the conversation, making the meeting’s focus very clear. Why not shift the focus to something that is more representative of the actual objective? After all, the process is meant to be just that: a process. It’s a dialogue, not a one-way street.
I have no doubt that many organizations out there have already come up with clever, relevant terms for many other aspects of their work cultures. For the purposes of argument, let’s stick with something generic: call it a Career Roadmap or an Employee Development Plan. (I like this type of phrasing because it emphasizes the individual nature of engagement.)
Within this framework, there is still a need for goal-setting. But the understanding should be that the goals are fluid, mobile, and frequently updated ‒ quarterly at a minimum. And crucially, the employee is as responsible for his or her development as the manager. Managers and employees should both strive to get to know one another well enough that any engagement challenge or necessary change of course can be brought up and openly discussed. This means that the onus for initiating check-ins is shared, and accountability is mutual.
The practice of ranking employees on a fictitious bell curve is long overdue for an overhaul. Of course, every organization is going to have its star performers as well as a few people that are struggling or that need further development. But a system that requires managers to effectively classify a broad cross-section of staff as average overlooks the differentiators that constitute their potential. Instead, let managers do their own benchmarking when pay increases are in the offing, rather than forcing them to force-rank employees during a performance appraisal. Workforce experts have universally concluded that this benchmarking is dated at best, destructive at worst.
You may be wondering exactly how to replace your annual performance reviews with a less formal, vastly simplified framework. There are many large, well-known, and resource-rich organizations that are in the process of overhauling their performance appraisal systems (including Adobe, Gap, Accenture, and Deloitte). But smaller organizations, including Sanborn Head and Associates, a New Hampshire-based consulting engineering firm, and Beacon Communities, a Boston based property development and management firm, are implementing a quarterly check-in process in lieu of traditional performance appraisals.
Implementing a series of more frequent, less time-consuming, and more targeted meetings in place of the traditional performance review helps to foster dialogue among teams. Contrary to the way it has been approached in the past, engagement is not a fixed state, and “performance” is not a series of boxes to check. It’s time for organizations to graduate from the “tried-but-not-really-true…” to a new and more effective paradigm.
The Employee Engagement Group offers tools, training, and consulting for those wishing to make the move to a more periodic means of gauging engagement, planning for employees’ futures, and driving performance. Our Employee Development Plan focuses on achievement goals that remain fluid and can be re-assessed in the light of shifting priorities, and sets additional development goals, like cross-training, mentoring, or completing a degree. Our new Engagement Accelerator tool (eeaccelerator.com) is a dynamic 13-question online assessment that provides a snapshot of key engagement drivers and work preferences, along with talking points for managers. We also offer additional assessments, surveys, and exercises, as well as “stay interview” packages customized to your needs. Please contact us for more information!
AN END TO THE “BLIZZARD OF PAPER”
One of the primary benefits of a comprehensive overhaul of the performance evaluation is that it removes many of the arbitrary strictures that make the process so arduous for managers and HR alike. The days of sending a small truckload of forms and documentation to HR are over. Moving away from the traditional performance appraisal model means that managers are no longer collecting data for a massive file on every individual. Instead, the new model should keep documentation light… and digital.
In the first year of your Employment Development Plan/Career Roadmap implementation, as it supersedes the annual review, many organizations will find it useful to conduct a survey of some kind to ensure that the quarterly check-in meetings are happening. This survey can be designed so that it also validates managers’ and employees’ experience of the new process, and provides meaningful feedback for tweaks or additional checks and balances.