My colleague Diane Spiegel of Sage Leadership Tools pointed out this OD-ED from the NY Times on why performance reviews are bad, and what should be done to correct them.
I agree with the premise. Reviews, and the lack of mutual objectives between manager and employee, drive the wrong behavior. No employee should be an "underperformer" at a point in time. Underperformance is usually as much about the manager as about the employee. The design of these convoluted, top-down tools also drives out innovation. They constrain degrees of freedom and the ability for employees to adapt to changing circumstances. Some systems don’t even allow for employee responses to manager evaluations. Annual performance tools are industrial age in focus, and at that, too far removed from the actual performance to be useful. One does not shut down a manufacturing line a year after it discovers some flaw in the process. A factory worker shuts down the line immediately upon discovering the defect so the cause can be corrected, and reword avoided. If performance was taken seriously the review discussion would be continuous, and any annual period of increases or bonus rewards would be a packaging exercise.
Here are some design thoughts on performance for managers:
- Balance for performance. Catch people doing things right, and catch them where you can coach. Encourage them to do the same for you.
- Provide moments of feedback immediately after some event (event here in its most general sense) and document the feedback and provide the documentation to the employee.
- Eliminate the creation of annual histories at performance time. An effective system should be simple and passive. As feedback is provided, and a dialog created, those narratives should be the only documentation needed outside of a click or two on process checkboxes. The goals and objectives should reflect a continuous process from the moment they are written.
- Co-create the measurements. One of the big issues with educators is the lack of a common, adopted measurement system that actually reflects performance. It is all well and good that Bill Gates and President Obama want higher performing teachers, but when the only option involves standardized tests, then we loose huge amounts of the learning experience that aren’t reflected in those tests – so we force the good teachers to do bad things because of the metrics.
- Communicate inwardly and outwardly. If there are goals and objectives, don’t keep them secret. Other people are likely aligned with the same work, so openly share what you are doing, how it is going and where you need help.
- Don’t let the performance management system (e.g., IT component) dictate the way performance is measured. If the system isn’t helping, then fix it or get rid of it.
- Don’t let HR dictate to you as a manager, how best to manage. This is a tricky one in that even managers have managers, and if the culture isn’t one of empowerment, then managers fall into the same trap as other employees. The constraints and dysfunctions precipitate down. Like the factory analogy, somebody needs to be empowered to shut down the line when the performance system isn’t working. Managers need to own their context and feel empowered to work with their teams within a broad policy framework.
- If you aren’t reflecting policy in your practice, then either change the policy or adopt the practice. Company culture is a vague and meaningless term. Company culture can only be meaningful if it is documented in policy and if people follow the ideas reflected in the documentation. Let me give you a performance example. An employee is asked to achieve a certain revenue target. The employee hits the target, but not without complaints from customers about the way he or she achieved those numbers. The selfish manager takes the numbers and runs, burying the complaints. The active manager starts seeing a pattern and take the sales person off the line and works with them to achieve the ethical and customer-centric policy that reflects the value of the company. The sale person is reintroduced in a probationary way and given target relief. As the manager and the employee mutually see progress, they co-create more aggressive targets and keep an eye on behavior as well. Yes, this can be complex and time consuming, but it is also a better approach than later law suits, employee turn over which includes the costs of onboarding a new sales person.
- Make sure there are targets tied to organizational growth and strategy so individuals can see how their performance in the context of long-term goals. It is important for people to see that performance is not just tactical, but that it is also moving the strategic indicators forward.