At a glance
Managers spend 200 hours a year on performance review documentation, according to Gartner research. Despite that dedication, 95 per cent of employees dislike performance reviews, and a near equal proportion think they give an inaccurate picture.
Greg Smith, author of the book Career Conversations: How to get the best from your talent pool, says “performance reviews can cheese people off and be a demotivating experience, which is clearly not what people intend, but then they go and repeat the same thing time and again”.
In some organisations, the performance review tends to be a tick-the-box exercise, and as a result is widely seen as pointless, he says.
Mark Shaw, CEO of NEOS HR, says a structured, target-setting focus to performance reviews might work for salespeople, but nobody else.
He says the way many organisations conduct performance reviews is suited to the 1950s when the world of work was a more stable place. The dynamic, fast-moving workplace of today requires a different approach.
“You can set goals, and by the time you sit down to have an annual or bi-annual review, everything has changed. There may have been a restructure, a new boss, new projects – there are so many variables involved,” Shaw says.
Smith says it’s not that employees don’t want feedback on their performance – quite the reverse.
“Today, more than ever, employees want to know how they are progressing, but they don’t want to feel judged – that is the source of straight-out anger – and they want assessments to be fair and balanced.”
Arbitrary ratings that aren’t linked to anything concrete, or criteria that are vague and open to debate, can poison what could be a positive and helpful conversation.
Performance reviews should focus on the future
What should performance reviews look like in the 21st century? It boils down to having good, constructive conversations that take a more solutions-focused approach. Regular check-ins will let employees know how they’re doing and avoid any big surprises during the annual review.
“Reflection is important, but more in terms of what has worked,” Smith says.
“I don’t think trawling over old miseries of the year before is much use. We should look at deficits, but you’re going to get more productivity if you focus on strengths.”
Shaw agrees that “it shouldn’t be about my performance and what happened yesterday. It should be about doing a better job tomorrow.”
How to measure skills
Should we measure performance at all? Yes, says Smith, “but make it simple and the measurements real and concrete, such as projects aligned to budgets or goals achieved within time frames”.
As for the harder-to-measure soft skills, Shaw refers to the well-established BARS tool (Behaviourally Anchored Rating Scale), which helps identify the differences between acceptable, good and excellent behaviours by using conversation to define what each of those look like in a work context.
Once described, a manager can then say: “What you’re doing is good, but we’d like you to try doing these things to make your performance even better.”
Smith says not all managers find these conversations easy, especially if they lack the interpersonal skills necessary to engage employees.
“Particularly in technical professions such as computing, engineering and accountancy, often you find managers get it, but they don’t know how to do it. Thankfully, these are highly trainable skills.”
Helpful framing of reviews
Starting from a position of positive intent and being open and receptive is the way to go.
“Then, when you go into the questioning, frame these in a helpful way such as, ‘Can you point to an occasion when you had a particularly stressful project? How did you cope with that?’ (if you are looking for resilience),” Smith says.
Role-playing also helps explore behavioural competency by teasing out how someone might respond in any given situation.
Managers can find these conversations quite enlightening or inspiring when they realise they can do it and it’s not a disaster.
Performance reviews tend to go wrong when too much is loaded into one conversation.
Shaw says separating difficult conversations is more effective, and these should be approached with supporting evidence.
“If someone is always late, for example, communicate it as a problem for you, their manager. ‘Help me fix my problem.’ It shifts the focus to the problem rather than the employee. When we have that conversation, the majority of the time we re-engage that person or they make an active choice to leave.”
Shaw also suggests discussing remuneration separately.
“When you get rid of remuneration and the difficult conversation, what is left is the subject of continuous improvement. How can we do things better together? That is the only conversation to have.”
CPA Library resource:
5 quick tips for better performance reviews
Set and agree on clear goals. Make sure measurements are concrete.
Adopt an ask-not-tell approach. You are not going to learn anything by doing all the talking.
Have ongoing and regular informal and formal catch-ups. Avoid rescheduling, as it implies the meeting is not important to you.
Provide personal skills training for management. For soft skills deficits, back up your observations with examples.
Focus on the future and development. Don’t dwell on failure.
Source: Greg Smith
Performance review case study: The Deloitte experience
After abandoning ratings for staff, Deloitte received feedback that employees needed some kind of framework to know how they were progressing.
The firm is in the process of introducing performance indicators with a focus on strength-based conversations and support for employees.
Six conversations take place annually between an employee and their coach. One is about goal-setting, two are Best Self conversations with a holistic focus on wellbeing and work–life balance. Two more are called You, Me, Agree, where the talk is about progress set against specific goals. The final conversation is solely about pay and is underpinned by more informal check-ins throughout the year.
In a project-based company such as Deloitte, it is not uncommon for more than one voice to contribute to a performance assessment, making accusations of unfairness less likely.