Is the performance review redundant?
Performance appraisals are like celebrity marriages; they are well intended but rarely work.
Advocates of traditional performance reviews will tell us that assessments are necessary to set clear direction for employees by providing valuable feedback on their performance. Without them, how will employees know how they are performing against business expectations? While this belief is valid and true in some cases, many organisations have at least questioned the value their annual performance review brings.
A common refrain heard from employees regarding the annual review process is that it’s too little, too late. If feedback is intended to improve performance (or celebrate great work), it should be given when and where it takes place. Being told six months later that your work could’ve been that little bit better if you’d done one or two things differently at the time, is an opportunity lost.
Organisations driving high performance get this, and have sparked a movement to focus on a ‘point in time’ structure, with the aim of consistently strong performance throughout the year and a continued dialogue with management for a better sense of where the employee is at in terms of output and happiness.
An article noted in the Deloitte University Press stated that performance management process should focus on continuous coaching and development, rather than competitive evaluation. Managers who provide regular feedback and opportunities to improve are far more likely to produce high-performing teams than those who retain once-a-year rankings.
Case study: Deloitte’s approach to performance management
Earlier last year, Deloitte unveiled a new-look performance management program that dismissed cascaded goals, laborious 360-degree reviews and numerical ratings. They wanted to focus on talking about the person, not their rating. So they simplified the process right down, asking only the direct manager for input into the review process and then introducing four simple questions to be asked at the completion of every project, or quarter. These are:
- Given what I know of this person’s performance, and if it were my money, would I award this person the highest possible compensation increase and bonus?
- Given what I know of this person’s performance, would I always want him or her on my team?
- Is this person at risk of low performance?
- Is this person ready for promotion today?
While results of the new system are yet to be shared, it is apparent how this approach could improve the efficiency of performance reviews, saving time and energy from an employer and employee perspective. It would also provide a more detailed and up-to-date view of employee performance and remove some of the angst and negativity surrounding more traditional formats.
One challenge that organisations face in abolishing the traditional approach is ensuring conversations about good or poor performance still take place.
Case study: SEEK’s approach to performance management
At SEEK, a substantial amount of review and renew has gone into the way we manage performance. We questioned whether our existing approach, which historically has involved a review of performance against our company values, really allowed each person to perform to their maximum potential. While our very best performers were living the SEEK values of ownership, passion, action, teamwork and honesty, so were staff who weren’t performing, and that made conversations difficult.
Instead, SEEK introduced a set of specific behaviours that are used to measure performance – the values were a given but the behaviours determine promotions and performance. By making the two distinct, it has clarified what is really important for people to concentrate on, in order to succeed at SEEK. This makes regular conversations about progress meaningful, but more importantly, it makes them easy, so there is no reason to only conduct them once a year.
Performance reviews: the verdict
So while there is still little evidence to suggest that abolishing performance reviews is the right approach, we can rest assured that a simplified approach should lead to an easier conversation.