Is the performance review really dead?
January 27, 2016
When did it all start?
Was it UCLA professor Samuel Culbert’s 2010 book, “Get Rid of the Performance Review!”?
Was it the 2013 paper drily titled “Performance appraisal satisfaction: the role of feedback and goal orientation” that showed the limited impact of criticism on performance?
Or did it all start two years ago, in a piece in an article in The Atlantic, entitled The Case Against Performance Reviews? Drawing on academic papers and industry experience, that piece pulled apart the annualized ritual of the corporate performance review, asking whether or not “a process so flawed is worth saving” in its closing summary.
Whenever it started, in recent years the performance review has been the subject of some sharp criticism.
In its Human Capital Trends report for 2014, Deloitte announced boldly that performance management was “broken.” Their prescription: “Replace ‘rank and yank’ with coaching and development.”
In April of the following year, the global consulting firm took its own advice and made the front cover of Harvard Business Review when it announced why it was canning performance reviews.
A few months later, Accenture announced it would drop annual performance reviews from the beginning of its new financial year, in September 2015.
These are big decisions. Changing the process for managing hundreds of thousands of people takes an enormous amount of management’s energy and time. Firms like Accenture and Deloitte do not take such steps without a considerable amount of thought.
Such dramatic changes demand everyone in business consider two questions.
First – what’s behind this rapid reversal out of the annual performance review?
And second – if you don’t use an annual review, what should you do instead?
Out of date, out of touch
One key factor behind this shift is the need for speed. A wide range of organizations – including Adobe and Motorola – report that performance review by an annual evaluation is simply not agile enough to deal with the rapid pace of business. Things change fast today, and a performance review can be outdated within a few months.
Another driver behind the shift from performance reviews is the changing nature of work. Annual reviews don’t fit today’s reality of flatter hierarchies, an increasingly mobile workforce and team-based working. We no longer structure all offices where managers and employees consistently share the same space and timetables.
Finally, we work and live differently today. Not so long ago, mail order catalogs would say “Allow 10 days for delivery.” Now we expect our goods at the door tomorrow, if not today. In this connected world, we expect goods, restaurant deliveries, books, transportation, accommodations, and just about everything else to be available on demand, when we need it. Why should performance feedback be any different?
Today, waiting up to a year for a review of your performance fails to meet expectations set by the realities of both our lives and our work.
Fortunately, it doesn’t have to be this way.
Replacing the ritual
What’s the alternative to the annual performance review? In many industries it can be replaced by frequent, informal conversations between manager and employee. These can be planned or serendipitous. The key is that the check is an explicit discussion around performance based on a clear, agreed description of what good performance is for the employee’s specific role.
The brief conversation can result in immediate changes, praise, and the identification of learning opportunities, both formal and informal.
All this may sound like good management, and it is. But where it goes beyond regular day-to-day management is two things. First, these short conversations are – like a performance review – kept focused on outputs and on observable behaviors rather than (as happens too often during informal conversations) drifting into less easily defined and less useful areas of character and even gossip.
Second, notes from the conversations are recorded by the manager and kept available on a cloud-based system, meaning they are never lost and that all follow up points can be easily referred to.
Performance as a journey
Keeping a process on track, it’s often said, is like flying an airplane – at any one time it’s unlikely that the plane will be pointing exactly at the landing spot. Instead, throughout the journey, the pilot makes small adjustments to put the plane back on course, until it arrives safely at its destination.
The new approach to performance review mimics how pilots fly – through regular, small adjustments to the route. Until recently, the size and complexity of most organizations made it impossible to arrange such regular conversations, much less recording the many small course corrections. Now with HCM technology – in particular, cloud-based, mobile technologies, organizations of all sizes can keep track of these regular, short conversations between their managers and employees.
Wherever it began, the idea of measuring performance on a regular, annual basis has been a vital tool for organizations needing to keep abreast of individual performances. Now, however, many are considering moving to more agile processes that provide employees and managers with more flexibility while keeping performance data on track. If the trend continues, we will soon enter a new period of high-touch, high-frequency management.
Infor HCM provides the technical infrastructure that supports employee engagement. To learn more about the issues in this blog, download our Industry Perspective paper Recalibrating 360° feedback for the modern, mobile workplace.