Ditching The Performance Review

February 26, 2015

I was astounded to read “Let’s Kill The Performance Review” by Liz Ryan. I agree with many of the things she states.

  • The majority of performance review/performance management systems in companies are broken–or at least dysfunctional.
  • It consumes too much unproductive time, with unclear benefit.
  • It’s not a necessary process for compensation management (though I do like compensation tied to performance.)
  • Performance plans as a protection against legal action isn’t really a good defense.
  • And while she doesn’t say it, most managers are poorly trained at setting performance expectations, coaching to them and evaluating performance.

But a recommendation to kill performance reviews, seems to be playing to pop culture, rather than responsible leadership. Killing them because the process is broken is the wrong thing, fix the process, solve the problem!

It’s our responsibility, as managers, to set performance expectations for our people. They need and want to know what is expected of them. We cheat them and our companies by not clearly setting performance expectations and holding them accountable for meeting them.

It’s our responsibility, as managers, to do maximize the performance of everyone on our teams. We do this through clearly set performance expectations and ongoing coaching.

It’s our responsibility, as managers, to evaluate people’s performance against those expectations. They expect it, they need to know how they stand and what they should be doing about it (part of coaching). We need to understand it, as well.

The performance review process is critical, both for our people and for us to fulfill our own responsibilities to our own managers and companies.

But the performance review process in most companies is broken. Abandoning it is not the answer, fixing it is the answer. Ms. Ryan makes an economic argument about the time wasted in performance reviews, suggesting huge cost savings. But if we aren’t reviewing performance in some way, how do we assure we achieve our goals. So it seems the time invested in performance reviews is well worth the investment, if we focus on improving the review process.

She also suggests people wanting feedback will ask for it. But what about those that don’t. They are often those that most need feedback. Besides, it’s totally irresponsible for managers to sit idly by, waiting for people to come to them for feedback. It’s our job as managers to provide leadership, direction, coaching and feedback to everyone on our team.

She suggests compensation systems be tied to market data, providing competitive compensation to everyone. It’s partly accurate, but naive. Market data is always a part of any compensation planning, but when you are looking at allocating a pot of money for increases across a team of people, what’s the most fair way to allocate it? I think it’s based on relative performance. I want to recognize my very top performers with bigger increases than my very bottom performers. I don’t know that I want to give my bottom performers an increase at all (Personally, i believe everyone in an organization should be on a leveraged compensation plan—but that’s another post.)

Abandoning performance reviews is the wrong solution. Finding ways to make the process more relevant and impactful creates huge wins for our people and our companies–and isn’t that our responsibility as managers?

Here are some thoughts:

1. There is absolutely no reason that all performance reviews happen at the beginning or end of the fiscal year. There’s also no reason they are held only annually. Why not hold them annually or semi annually based on the “anniversary” of when they started in the job. If a person starts in March, then annually, the review will be held every March. A person starting in August would get the review in August. Even though they are mid way through a fiscal year upon which goals like quota are set, it’s pretty easy to bridge this in the performance review. Also, this spreads the reviews across the year, rather than having all bunched in one month.

2. Make the employee part of developing the performance criteria. Too often, the performance criteria are set with little or no input from the individual. We know this is just bad practice, so increase ownership and engagement in the performance planning process.

3. Even if the formal evaluation period is yearly, set interim checkpoint reviews. Set people up to be successful and not “surprised” at the end of a performance period. Do interim reviews, help them establish action plans to improve performance. If they were part of developing the plan in the first place, they will have huge ownership in doing this.

4. Recognize that coaching and the performance review are different–though tightly related. In coaching we generally are focusing on a specific area of improvement. For example we may be coaching how a person better qualifies a deal, how that individual might improve prospecting, or any number of other things. The performance plan and review looks at total performance. That’s why it is important to have interim performance reviews to look at total performance in the job. Coaching and performance reviews go hand in hand, but don’t confuse them.

5. Ms. Ryan argues things should be more team focused. There is absolutely no reason why a performance plan can’t include team or collaborative goals as part of the plan. Every performance plan I have ever had has included team and collaborative elements.

6. Change people’s attitudes about performance planning. I don’t know why, and Ms. Ryan reinforces it, but everyone thinks of performance planning as “punitive” or “negative.” Everyone in the organization is expected to perform at the highest possible level. As leaders it’s our job to help our people achieve the highest levels of performance. Continuing to improve performance is part of continuous improvement. If we don’t measure our performance, if we don’t improve our performance, organizationally we will die. If we really do our jobs right as managers, we will have outstanding performances and outstanding review meetings, and outstanding reviews. The “negative” aspect of performance planning is really a result of bad implementation and bad execution by management.

7. Train managers incessantly on performance management, performance planning, performance reviews. Train them on coaching. Develop their skills to they do this right. Train people on personal performance management. Give them the training and tools to help understand an maximize their own performance.

8. Stop backing away from the tough people management issues. Performance planning, performance management is about shared accountability. A performance failure on the part of an individual is also a performance failure on the part of the manager. (Actually, it may represent a bigger performance failure.). There will be bad performances, possibly the right person in the wrong job, or any other reason. We owe those people the respect to let them understand where they aren’t performing. We owe them the chance to improve their performance—coaching and helping them as much as possible. If they don’t make it, we further owe them the respect of letting them understand where the failures were so they might avoid those in the future. Too often, management takes the cheap, easy way out. Rather than terminating people for performance, they enact a RIF or Lay-Off. RIF’s or Lay-Off’s are really a result of management errors (perhaps management non performance) not individual performance problems. We owe it to all our people, even our poor performers to give them an accurate view of the performance.

9. Put in place tools and systems to help managers and people set performance expectations, measure performance against them, and improve performance.

I’ll stop here.

Fortunately, performance management is too important an issue to be left in the hands or HR professionals (with no disrespect to my friends in HR). It’s our jobs as leaders to manage, measure, and help our people maximize their performance and contribution to our organizations. If we stop the performance review process, we are forsaking our responsibilities as managers and leaders.

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