February is flying past us at a rapid pace, and for most managers and HR professionals, the shortest month is also that which is associated with the most dreaded activity of the year; performance reviews. Recent data by SuccessFactors polling HR professionals tells us that nearly eight in 10 companies conduct performance appraisals; of those, 72% reported being only “somewhat satisfied”, “not very satisfied” or “extremely dissatisfied” with the process.
At best, what is supposed to be a forthright, transparent conversation between managers and subordinates for the benefit of their performance becomes a meaningless, inflexible annual ritual in which we must put complicated human behaviors and actions into simplified numeric or generic categories to fulfill a directive. At worst, managers abuse the systems by inflating ratings of favored employees while deflating the accomplishments of others, otherwise known as the halo effect. And while study after study has shown this process to be ineffective and unwanted, there is little left to take its place, as companies need measurement data to support compensation decisions, as well as termination decisions.
So how do we get back on track without throwing the baby out with the bathwater? How do we start using this process as a performance management tool instead of a compensation tool? How do we use these conversations as opportunities for improvement, so that employees “feel the love” for their efforts, rather than making them a check on managers’ lists?
The answer may not come easy – there’s not an app for that. Because attitudes towards this process have developed over decades, it only makes sense that a major shift in not only how the process works, but how people think about it, will take some significant time. And while there are many best practices out there to help guide us, I will only touch on a few, and I encourage you to contact me with your ideas if you have fought this battle and won!
If you are looking for a complete overhaul, first consider going electronic if you have not already done so – paper forms inhibit doing things remotely for both employees and managers, and it’s also easier for both to go into the system and add notes throughout the year as they come to mind, making the year-end results much more accurate. Another idea is to break down one-and-done mindset – ensuring that employees and managers have consistent, timely feedback. My favorite initiation of this includes having the managers rate each employee on a quarterly basis (keeping to the bell curve may or may not be enforced at this stage) and include comments as to reasoning; for year-end ratings, you then simply calibrate these ratings altogether giving you the annual score. While no paperwork would is needed for these quarterly meetings, managers would schedule them with their subordinates to discuss their current performance – and as ratings would not be communicated at this meetings, the honest feedback is imperative here. This process alleviates the annual year-end crunch for managers and HR, gives employees timely feedback, and reduces the potential for issues like the halo effect and insufficient substantiation.
Other alternatives for those not looking for a major change include creating set expectations for what constitutes a particular rating, calibration group sessions, and peer reviews. Creating set expectations for each rating would include a written description of what behaviors and actions constitute the ideal embodiment of a particular rating. Many find this helpful when managers throughout the company are not on the same page rating-wise. Calibration group sessions are more fitting for executive level groups, and are usually done off-site with a third party. Managers at a certain level gather in a room, designate certain areas of the room as rating buckets, and every employee’s name goes on a post-it note. Each manager then puts that person’s post-it in the area in which they believe they rank; from there, the discussion takes place in order to not only ensure the bell curve, but also alleviate any disproportionate rankings by any certain manager (i.e. a manager who considers themselves a “hard rater” never gives out high ratings would be forced by the group to do so if warranted). This tool is also useful so that talent at that level is exposed to many different managers, and bench strength can be discussed with the visual tool of the post-its. Lastly, peer reviews, notably toted by Google, are in addition to a peer review and manager review; typically the employee must choose a specified number of peers to review them (usually those whom the employee works most closely).
So, while the dissent is getting louder, I wouldn’t plan on a total eradication of the performance review process. It is still a much-needed practice, and an inherently good one – it’s just about finding out what works for your employees and company.
Until next time – Be Inspirational!
