Why the performance review has reached its exit time

The pandemic offered people many lessons. We learned a lot during the pandemic. We learned that employees and their managers can work from different locations and still get work done. We learned many employees, even though they often don’t get rewarded with the highest salaries, are willing to work through incredibly difficult conditions to keep the rest of us safe and fed. Now that we’re settling into the new world of work (fingers crossed), the topic of what do to with performance management is gaining attention again, as it should. Despite our best efforts and intentions, the traditional approach to performance management has failed managers, employees and our organizations. Most of today’s performance management approaches, no matter what we call them, are often complex, emotionally burdensome, and time consuming, resulting in the most dreaded task we have to do at work. But before you assume that one approach or another is right for your organization, it might be helpful to think beyond the headlines and consider the challenges of the core tenants of the traditional approach to performance “management.”

Although well intended, the traditional performance management approach runs face-first into three primary roadblocks.

Trying to accomplish two distinct outcomes with one not-so-great process: Performance management is intended to measure employee performance and provide a feedback mechanism to drive more performance. Although both outcomes have to do with employees, they are distinctly different things. Measuring employee performance provides data to help inform talent decisions. What’s measured does not get done; what’s measured gets measured. Think about taking your temperature. Does taking your temperature reduce a fever? Of course not. And the act of measuring employee performance does not increase performance. Two separate outcomes deserve two separate approaches.

Overengineered: Work is complex so it would seem that measuring employee performance should be complex too. The traditional attempt to capture employee performance in the midst of that complexity usually involves trying to use goals, job responsibilities, and competencies as measuring sticks. This approach assumes that work is stable enough for goals to stay relevant, job responsibilities are countable, and that there is a homogeneous ideal behavior model for each job. In today’s world, most work is dynamic, shifting quickly and often not even close to the job description that outlined the work on the first day in position. Goals too, become outdated almost as fast as they’re created. Even if they are timely and relevant for an employee’s work (and not every employee’s work is conducive to goals), the markers that we try to measure are usually made up in an attempt to have some sort of quantitative measure of work that’s uncountable. As for competencies, well, your own unique best work is just that, unique. Forcing employees into a persona that isn’t them is counterproductive to optimal unique contribution.

Emotionally burdensome: In addition to being incredibly time consuming, performance management takes an emotional toll on many employees and their leaders. Employees struggle to write a self-review of their own work to hopefully entice their manager to give them a better rating. Managers spend hours writing some sort of narrative about work they don’t really remember so they can justify the rating they know they already want to give. And after all that comes the dreaded performance review conversation where managers are supposed to give an all-inclusive feedback report to their employees who really only want to know if they’re going to get fired and what their merit increase is going to be. No amount of training or gussying up a form is going to make it any easier.
There are many other challenges such as the unreliability of the data that is collected, the fact that most employee performance is hard to differentiate, and the forcing of the curve. The bottom line is that it’s time for not just a process change but a fundamental approach change.

Singularly focused: If organizations want to measure employee performance (which they should), then they ought to have a process dedicated to that and that alone. Increasing performance happens in many ways but most powerfully by creating a practice of high attention between team leaders and team members. Separating performance measurement from performance acceleration allows organizations to design processes and programs to achieve the intended outcome rather than trying to flip a burger with an egg beater.

Simple: Even though employee performance is variable and dynamic, all performance has a few things in common that can capture a large majority of any employee’s performance. Does the employee deliver quality work in an appropriate timeframe and is the employee reasonable to work with? No goals to grade or competency models to rate. Just two simple questions which can be asked of managers frequently to provide the organization with a beautiful view into the talent landscape of their organization.

Emotionally doable: Feedback may be the gift that keeps on giving but it’s a white elephant gift. Performance review conversations are intended to be helpful but often end up in a game of the team member defending their performance and the team leader trying to come up with encouraging words to help the team member feel good about a “satisfactory” rating. Grown-ups don’t need a grade; we need safety, security, and certainty. Safety, security and certainty are created through frequent, forward-looking conversations, not once a year report cards. Creating a separate annual compensation conversation from the ongoing, hopefully weekly, check-ins around performance disconnects the backward looking from the forward facing and removes the anxiety that comes with the annual one-size-fits everyone meeting. A “thank you so much for your unique contribution to the organization” is doable by anyone, even the most reluctant team leader.
There has never been a more perfect time to reinvent how organizations measure employee performance. Tweaking your current process, buying a piece of software that simply does what the old one did but with prettier colors, or doing quarterly conversations versus once a year are not the solution to this decades old problem. Fundamentally reinventing how we measure performance by focusing on the singular goal of performance measurement, keeping performance movement a separate thing, simplifying by measuring the critical few things, and removing the emotional burden of a once-a-year difficult conversation to the greatest extent we can is certainly a great first step. And now is the time. The pandemic has opened the door to a new world of work and our people processes should reflect that.