Are you feelin’ groovy? Are you feeling like the hep cat who ate the canary?
Are you one of the first movers who stopped doing annual performance reviews and become too cool for school? Are you one of the folks who saw the bright shiny object and grabbed it? Did you stop doing annual reviews because Consultants who don’t do annual reviews (or get them) told you it was the great new way to achieve higher business outcomes and better employee engagement?
Then you might be experiencing some buyer’s remorse right now.
Annual Reviews May Not Be That Bad
I’m guessing no one wanted to be the one to point this out, since most HR visionaries have been harping on the demise of annual reviews with the fervor of a Steeler’s fan, but the benefits of removing the annual review may not be nearly as good as some have proposed. Actually, a Fast Company article from six months ago (how did this not get more play?), discussed the results from a CEB survey of 10,000 employees from 18 countries showing that ditching the annual review:
- Caused Manager conversation quality to decline by 14%
- Meant Managers spent less time on informal reviews conversations
- Caused top performers’ satisfaction with pay differentiation to decrease by 8%
- Helped create a drop in Employee Engagement of 6%
Tell me again how annual reviews were the problem?
Good Managers Mean Good Employees
I feel like such a broken record on this issue.
Not about annual performance reviews but how we keep trying to fix employee problems caused by the lack of manager skill and manager quality by changing systems. It seems companies have thrown in the towel on trying to improve the quality of their management teams and have decided that rearranging processes will fix employee issues.
No amount of rearranging deck chairs would have changed the course of the Titanic. Only changing those in charge of steering the ship would have changed that outcome.
While I’m sure there are success stories, and this article does mention there were some successes…at first. But they said once the “initial glow” of the change wore off – managers reported problems.
- Only 4% of HR leaders reported they could accurately assess performance once the review process changed
- A lack of laser focus on reviews (ie: annual performance review tracking) suggested to managers the company didn’t value or prioritize performance reviews, so the managers didn’t focus on it
- Managers didn’t use the “freed up time” normally used during the performance review process to work with their staffs – they just got busy on some other functional element of their job
- Companies didn’t find a better way to connect the historic “raise” process to something other than the traditional performance review
In other words… changing the process created its own set of problems.
Training Training Training
In real estate there is the old saw that success is a function of location, location, location.
And I’ll go on record as saying manager success is a function of training, training, training. And, changing your company policy to embrace ongoing performance conversations instead of annual reviews means you NEED to have training first and foremost on your mind. Long before you decide to pull the trigger on your process.
The Fast Company article ends with what every company should have started with… manager and employee training is needed to make eliminating annual reviews work:
“… making the investment to get managers to be better at informal communications and feedback. He also says they are getting employees on the bandwagon, too, by empowering them to start the conversation with their managers about their performance through training and job aides. Senior leadership can also keep track of conversations through software and surveys to ensure feedback is being given regularly.”
Yeah…that’s right – training and measurement. Make sure people know what to do, how to do it, and then track the behavior.
Who knew? Just about anyone with a modicum of management skill. I’m a big “early adopter” but as a manager I also know that I have big impact on some people’s lives. My input and decisions can either help or hurt the people I’m charged with guiding as a manager. Experimenting with their income, their rating, their promotion possibilities isn’t something I should do en masse without taking time for some due diligence. Advice for the future – take a breath. Take some time.
Now – let’s talk A.I. and HR big data… I’m sure there is something shiny in the pile too!
Paul Hebert is Vice President of Individual Performance Strategy at Creative Group Inc, writer, speaker and consultant. Paul focuses on influencing behaviors and driving business results through employees, channel partners and consumers. He is dedicated to creating true emotional connections often overlooked in our automated, tech-enabled world. Using proven motivational theory, behavioral economics and social psychology he has driven extraordinary company performance for his clients. Paul is widely considered an expert on motivation, incentives, and engagement.