By Maria Greco Danaher (Shareholder, Ogletree Deakins) and Christopher M. Danaher (Regional Manager, Thomson Reuters)
Is the annual performance review a value-added event for employees . . . or is it an anxiety-generating mechanism that could be eliminated without the loss of any forward momentum to a company?
Here are a few facts about performance reviews (based, not on any scientific calculations or extensive polling results, but on the authors’ combined experience with corporate management practices, training, and litigation avoidance):
- Supervisors and managers frequently misstate the true nature of the performance issues being addressed, generally describing each issue as less of a problem than it is;
- Many employees are unable to understand the exact nature — and effect — of the resulting evaluation;
- Written performance reviews often are used as evidence in employment litigation to support an employee’s claim of discrimination;
- The practice of annual performance reviews has been criticized by employers, employees, and media, alike; and (most surprisingly),
- Most companies continue to implement annual performance reviews in the same way that they’ve done over past years.
The Pros and Cons:
There are strong supporters for and strong detractors of the typical annual performance evaluation. The New Yorker summarized those arguments concisely in its July 24, 2015 edition, with “The Push Against Performance Reviews.”
With corporate employers’ increasing attention on employee engagement, individual accountability, and value-added efforts, companies are asking whether or not performance evaluations should remain part of management’s tool box for performance improvement. Look at the primary arguments for each side:
- FOR: Advocates of annual reviews assert that it creates a mechanism for managers to identify “top performers” and “problem employees” and to explain to the “average” employee the steps that he or she can take to move into the highest tier.
- AGAINST: The problem with that rationale is that it typically is based on an assumption that there is a “top” and a “bottom” group of performers. With that mindset, some managers and supervisors create artificial categories of deficiencies (“not outgoing enough,” “unable to accept criticism gracefully,” etc.) to assure that they can populate each performance level. Further, it is the unusually thoughtful and far-sighted manager who takes the initiative to explain to the middle-of-the-deck employee what must be done to rise to the top.
What Is The Alternative?:
The alternative to the dreaded review process can be summarized in three words: frequent meaningful feedback. Regular meetings (optimally, at least monthly) do several things, including:
- Allow employees to have a voice in the relationship with their supervisors;
- Lessen the anxiety that is a typical result of the anticipation of the yearly event on which all raises, promotions, and job possibilities rest;
- Help weaker performers to understand the steps needed to move toward improvement; and
- Assure that managers and subordinates are on the same page when it comes time to make decisions regarding raises, promotions, or disciplinary actions.
The trend clearly is in that direction. Adobe has instituted “check-in conversations” with employees; earlier this year, Deloitte completely redesigned its appraisal system; Microsoft abolished its evaluation system in 2013 ; and Accenture is getting rid of performance rankings altogether in September.
How To Do It Right:
Whether or not a company continues using an annual performance review or moves to a more frequent meeting schedule, the mechanism should include the following elements:
- A pre-set written agenda, with actual talking points, which allows both the manager and the employee to give realistic thought to comments and discussion topics;
- Objective measurements – set during the meeting to allow for employee input and questions – for which the employee should strive before the next meeting;
- Concise documentation of the meeting itself, which is made available to the employee for convenient review; and
- Time during the session for productive discussion and honest feed-back.
There’s an important consequence to providing frequent meaningful feedback, as opposed to a once-a-year anxiety producing meeting: it encourages managers to think of “managing” as an action word, rather than just a job title. This new mind-set could lead directly to increased employee engagement.
It takes sincere attention and honest effort to stay in touch with employees for more than a single scheduled “checklist review.” But teams often emulate their managers, so an investment of time and effort by a manager could very well lead to more effective output from the whole team, who then view the manager as doing more than just the “bare minimum.”