Are you still doing traditional performance reviews?

26 Feb

In 2015, PWC surveyed the ASX top 150 regarding performance reviews. The survey found that most high performing businesses acknowledged their performance review processes didn’t work, yet still did them in lieu of a better way. All these years later, still are and we say, it’s time to stop!

When I started to read the early research coming out of the US around 2010, I was working in-house in HR and it grabbed my attention. As an HR practitioner, I knew the traditional performance review framework was broken and it was welcomed news that a spotlight was being shone on the problem. It was one of the few HR practices that hadn’t faced the same scrutiny as others in the transformation of the HR value proposition.

Five years later, PWC’s survey published some meaningful data, noting:

69% of companies see line managers not prioritising performance management conversations or giving feedback, as an organisational issue;
line manager capability in managing performance was an issue;
46% of companies intended to improve their coaching and feedback as a way to improve performance management; and
while most organisations emphasised HR and senior leadership being responsible for performance management effectiveness, 61% of employees believed they are equally responsible - that it’s a shared responsibility.

In 2016 Harvard Business Review published an article “The Performance Management Revolution”. In this article, the authors cite a senior manager from Deloitee’s People + Strategy team describing their global traditional performance review process as “an investment of 1.8 million hours across the firm that didn’t fit our business needs anymore”.
You can read the article here.

The process is broken

I had spoken to hundreds of high performers over the years and couldn’t find one who said they found the traditional approach valuable. Nor did they consider it a key leadership tool in managing and leading their own teams, in fact, the opposite was true. Many said it would undo a year’s worth of good work thanks to arbitrary goals designed to fit an ineffective template that didn’t provide a holistic process to managing the complexities of people and performance.

Another insight high performers told me was that they want to own and manage their own performance, on their terms, based on their individual needs, and according to PWC’s report, 61% agree. Despite this, the process is still HR driven and Manager led, ‘one size fits all’, and compliance focussed.

Before I answered the call to change, I managed the compliance focussed traditional performance appraisal processes and I have seen it all. A manager who used to photocopy both the goal document and the appraisal form and just change the names - I kind of admire the efficiency for a non value add task! Given, this bloke wasn’t the greatest leader, who didn’t really want to have performance conversations of any kind, what else could be expected? And these types of examples are endless;

the manager who did all the talking
the manager who stored up 12 months of negative feedback to dump in one go
the manager who believed he only had to manage performance once a year when the forms came along
the CEO who demanded all his managers did them, but never did them for his managers
the manager who used the time to talk only about himself and his great achievements
the manager who refused to allow people any input into why things could not possibly have been achieved
the manager who handed out the forms, asked people to fill them out, and send back via email with no conversation at all
the HR department who managed the whole process via email or the HRIS, no training for managers in how to have a performance conversation or how to manage performance.

For HR departments who are only interested in compliance, it will be paraded as a huge success - “we got 100% of the forms back on time”! Massive red flag. Managing the follow up, begging and then threatening for completion, impossible deadlines (especially if there is a link to pay), and then managing all the fall out is the opposite of proactive HR. HR practitioners that are trying to have an influence on performance and culture, know it adds no value and consider it a burden and a waste of time.

Of all these issues, and the many I haven’t covered, here is the biggest problem of all – it is all rear view – sometimes a very distant past, and not the here and now or the future. Literally, what is the point?!

If performance conversations are being had on a regular basis, adjusting, realigning, resetting objectives and providing real time feedback there is no need for a periodic event. Reviewing and managing performance is not event based for any business that wants a high performing culture.

To claim that you have a high performing culture, you have to manage performance.

When I replaced the old with something better, something that worked, the results were immediate. There was improved engagement and alignment and improved results. The alternative, ongoing, purposeful conversations, the kind that keep leaders close to the pulse of performance, behaviour, and trust. That approach felt radical at the time but it worked. It takes intent, you have to train leaders in emotional intelligence, the principles of performance management and skill and equip them with the tools to manage performance constructively and effectively but the need is critical.

Way back in 2010, before PWC’s report, and when it was just an idea, I chucked out performance reviews for the employer I was working for at the time, and I’ve done so ever since. And here is the good oil – no one complained, productivity didn’t drop, performance didn’t tank, nothing changed – that’s how little value there was, not good or bad. But this was also a huge “aha” moment. There was an opportunity to reinvent the process of reviewing and appraising performance.

Over the years I’ve constantly refined the process, applied key learnings and incorporated feedback from high performers but the results speak for themselves in all the cases. I would never go back to traditional performance reviews. Never.

You need to do the same. Some entrenched HR practices need to die, this is one of them!

Reach out if you want to learn more about how we can help you innovate your performance management process.