5 Ways to Change Your Thinking On Performance Reviews

It’s about that time again.

Employees all over the world are collectively groaning at the prospect of this year’s annual performance review. Managers will dig through emails and project tracking tools in an attempt to remember what their direct reports did over the past 12 months, while employees will grudgingly respond to question after question on their peers’ abilities to “collaborate” and “successfully contribute to the objectives of the company” on a scale of 1 to 5.

What’s wrong here?

How has this process, which almost every company with over 100 employees has tried at one point or another, become so ineffective and wasteful? I’m sure you’ve read your fair share of similar articles that list the myriad ways performance reviews are broken, so I’ll keep the list below short to get to the good stuff (the solutions):

1. Legal Compliance has become the main driver (i.e. do we have enough data on our employees in case we have to fire someone?)
2. Compensation, rather than employee growth, has become the focus of performance conversations.
3. Annual reviews aren’t enough. They only cover the two elements above and neglect the growth needs of employees.

It’s A Way Of Doing Things

Thinking about performance management in this new way is a cultural shift. It’s a new way to think about your employees, it’s a new way to think about your organization, and it’s a new way to think about your relationship with your coworkers. Some companies already have this, while others will need to work at creating this high performing culture. Changing the way your company thinks about performance management will take more effort than you may realize and will require substantial changes to the status quo, but if you accept that and are ready for the challenge you’re off to a great start. Now, let’s get to it.

What It Is Not

NO 1–5 RATINGS, AND ABSOLUTELY NO STACK RANKINGS

Your system should look at performance holistically and should be focused on how to help every individual employee improve, not just pit them against each other. Rating skills or “leadership traits” on a scale of one to five doesn’t offer valuable insight to employees on how they can improve, it just tells them they’re inadequate (as it’s pretty rare to get full marks). It is a relic of the old performance review system that attempted to make it easier to slice and dice employees into forced stack rankings. It’s also a cop-out.

COMPENSATION IS A SEPARATE CONVERSATION

As you’ll read shortly below, performance management should be a continuous conversation. A more formalized conversation centered around compensation should be separate from the ongoing, learning-focused performance conversations happening throughout the year. The compensation conversation should be informed by an employee’s performance, but the goal of your larger performance system should be to help employees learn and improve to create long term, long lasting results.

What It Is

Rule #1: IT’S ALL ABOUT EMPLOYEES

Think of performance management as a business operations tool, not as an HR process. Performance management should be the way managers and teams work more effectively, how they produce better results, and how they create great things together. HR does need to be able to collect performance data to be legally compliant, but that doesn’t mean compliance should run the show. Your performance management system should be built and designed for the employee and the manager, not the HR admin.

Rule #2: IT’S ALL ABOUT LEARNING & IMPROVEMENT

The main goal of your system should be to provide each and every employee with an avenue to collect personalized suggestions for improvement, driven by the employee herself. Your performance management system should be thought of as a learning resource that can help everyone get better at what they do, not as a gotcha tool made to catch, and cut, people out. The system needs to facilitate internal mentorship and coaching, and should take advantage of the fact that your company is made up of really amazing, talented people.

Rule #3: IT’S CONTINUOUS & BITE-SIZED

Your new system should make it easy for employees to send and request feedback from anyone at any time, and should help make that behavior commonplace. Employees shouldn’t have to wait until the end of the year to know how they’re doing, and the prospect of getting performance feedback shouldn’t nearly give them a heart attack. We all know getting feedback early and often is great and leads to higher performance, but the problem is that it’s a new behavior for most. Your tool should help teach this new behavior to your employees, and should be seen as a long-term investment by management. Bite-sized feedback is much easier to digest, is more actionable when given within context, and is much less intimidating than one annual report that supposedly encompasses an entire year’s worth of work.

Rule #4: IT’S COLLABORATIVE

Most annual performance reviews are driven by managers. Unfortunately, this creates mistrust within the manager-employee relationship, and is often biased by personal opinions (Googling “My manager has it out for me” produces over 600 million results). This also places a lot of extra work on the manager’s plate. By making your performance management system collaborative, your system strengthens the ties between employees and decreases the amount of busywork a manager has to complete for each employee. How do you make it collaborative? Open the feedback channels between employees, break down departmental silos, and increase transparency around company, team and individual goals.

Rule #5: IT’S DATA-DRIVEN

We live in an age where data can be collected and mined on just about anything you can think of, including employee performance. It’s because of this data that we can begin to find trends and biases that are normally hidden from plain sight (if you haven’t read the linguistic analysis study on male vs female performance reviews, read it now). Your performance management system should enable you to collect and make sense of this data on an on-going basis and provide insights that are actionable. Are there any social issues happening between two of your employees? What employees are great at managing up but turn out to be abusive to their own direct reports? Which employees are crucial to your team’s success, even though they may not shine as an individual contributor?

Seeing Performance in a New Light

With a continuous, collaborative, learning-centric performance management system driven by data, you can gain greater insight into employee performance than ever before. Design your system for the employee and for the manager. Make it enjoyable and valuable for everyone to use on a daily basis. Not only will this give every employee an avenue for personal development within your company, but it will create a culture of continuous learning and improvement that will drive bottom-line results up and to the right. If your company is able to look at employee performance management with this new lens, you’ll reap the benefits for years to come.

Over the past two years the team at workZeit has been creating tools to improve the way companies work. Featherlight is the latest product currently in Beta that follows the philosophy of performance management outlined above. Featherlight uses machine learning and natural language processing to provide insights to managers and employees in real-time to improve the way teams get work done.

Want to learn more? Email Kelsey at featherlight.co