If it’s broken, fix it – don’t throw performance reviews away

It seems that performance review bashing has become the newest sport in human resources. Recent weeks have seen several major Australian corporates announce that they are scrapping annual performance reviews. These announcements are sending some practitioners jumping for joy – after all, plenty of research shows us that no-one like performance reviews.

Before we get too excited about avoiding those uncomfortable annual discussions though, it’s worth considering whether it is the concept itself that is flawed or the way in which it is carried out. In this post we look at some of the common mistakes that give performance reviews a bad name, the reasons they might be worth saving, and what we can do to make them better.

What’s wrong with performance reviews?

There are four key complaints that come up time and time again when we talk to our clients about feedback conversations in their organisations.


1. Complaint: The managers don’t believe in the process

If you believe the performance review process to have little value, then the chances are you will put little effort into it and your expectations will be fulfilled – whether you are the reviewer or the reviewee.

My early experience of feedback demonstrated this problem. As a relatively junior accountant, I went into my first performance review at a new firm.  My reviewer opened the conversation with “Well, I didn’t have a chance to speak with your managers and I don’t have anything to share with you, so I guess you’re doing ok. I don’t see that it would make much difference anyway.  I’m sure you’ll get a ‘meets expectations’ at the calibration meeting.”

As you can imagine, I came away from that meeting with no real idea of how my performance measured up and no ideas about what I needed to do to work towards my next promotion. And, even if the Director had given some constructive feedback, there was a real risk that I would have rejected the feedback based on his lack of knowledge of me.

Advice: Encourage people to believe in the process.  Share stories of successful outcomes from reviews to help build buy-in to the process and ensure that performance reviews are undertaken by people who take the process seriously and who invest the time gathering information to have a productive conversation.


2. Complaint: Performance reviews mix up the different types of feedback 

Simon* is an analyst in a large organisation. He went into his performance review knowing that the outcome of the discussion was critical. If he wasn’t rated a 4, then there was going to be no bonus for him that year. Simon was also really keen to progress in the organisation and wanted some guidance on filling in a couple of gaps in his skill set to help get him to the next stage. He was reluctant to raise these gaps with his manager though, as he was worried this would go against him getting a bonus.

In our previous blog post, we drew the distinction between three purposes of feedback: appreciation, coaching and evaluation. A balance between these is important – and generally, it’s better that these are done separately. While you might deal with both coaching and evaluation during the course of the conversation, it is important to clearly define when you move from one to the other. Without this delineation, there is a real risk that staff won’t feel comfortable discussing their valid concerns about performance. Also, any performance concerns raised by the reviewer may be seen as just an excuse to give a lower evaluation and may not be taken seriously by the staff member.

To encourage a productive conversation, Simon’s manager could introduce the conversation something like this:

“Simon, I’d like to start by discussing how you’ve gone this year against your goals, and how that feeds in to your rating. Once we’ve finished that, I’d then like to look forward to identify any areas you are keen to work on and to give you some ideas on where you can focus to continue building your skills and working towards promotion.”

Advice: Break the performance conversation down by separating evaluation from coaching.  Create a safe space for staff to raise development concerns without fear of adverse consequences.


3. Complaint: Goals are unclear or irrelevant  confused businessman

I was recently coaching Justin, a newly-promoted manager, who had been sent for coaching because he needed to be “better at communicating”. When I first met with Justin, he was confused about why he even needed the coaching. From his perspective, he had reached every tangible KPI in the previous year and he saw little wrong with his performance. As a social person with lots of friends, Justin was pretty certain that he had no issues in communication.

When we had a joint meeting with his Director, it became clearer to me where the problem was. The Director had earlier given me some fairly brutal feedback about instances where Justin had communicated disrespectfully or even rudely with colleagues. According to the Director, Justin would talk over people, fail to listen to their point of view and get angry when they didn’t agree with his opinion. In the room with Justin, the Director watered down and even sugar-coated these messages to the point that they seemed like a minor detail. In fact, unless his behaviour changed, Justin would never get another promotion in that organisation.

Lucky for Justin, I was able to coach his Director through this conversation to take the padding off and enable him to express the real feedback. With a few targeted questions seeking out specific examples, and inviting discussion about what the consequences would be if his communication style didn’t change, the feedback became clearer to Justin. While it wasn’t an easy conversation for either the Director or Justin, we now had a clear goal to work towards. Justin was committed to progression in the organisation and was now at least open to some coaching to see what change was possible.

Advice: Ensure that performance goals are clear and that they are something the employee really cares about.


4. And now for the biggest complaint – The performance review is all there is

Without doubt, this is the most common complaint we hear. It seems like it’s common knowledge that feedback should be frequent and timely, but common practice is far from it.

Paul was a junior lawyer. Like most of his colleagues, he was keen and eager to learn and progress. Paul tried to set up feedback meetings with his Partner. Each time, the Partner rescheduled. Eventually, Paul worked up the courage to tell the Partner his concern about not getting feedback. The Partner said, “I’m sorry, it’s just that I’m really busy at the moment. Review the comments I’ve been putting on your documents and I’ll let you know if there’s anything else you need to worry about”.

Paul went away, somewhat comforted that there was no major problem. Come the performance discussion though, the Partner told him, “Look, the quality of what you are doing is great. You know your stuff. But I’m a little disappointed that you haven’t been more proactive throughout the year and sought out more work when you’ve been a bit quiet. I would have expected a lot more proactivity from you.”

As you can imagine, Paul was not only surprised, but also incredibly disappointed, and felt blindsided by this news. Not long after, he put in a request to move to another part of the firm and his talent was lost to that group.

Advice: Make the time to give feedback as it comes up. Make the time to give feedback as it comes up. (No, that’s not an error – it’s just so important I wanted to say it twice!)


So why do we still bother with Performance Reviews?

We’ve discussed four of the common issues with formal feedback processes.  So if there are so many problems with performance reviews, are there benefits that balance these out?

While I have been an advocate in the past of minimising the structure of performance reviews (who was planning on reading that 35 page capability framework anyway?) I am a firm believer in having a performance management process. Melbourne University’s Professor Peter Gahan, argues that “the problem is not so much with having performance targets, performance plans or conversations about performance, the problem is that it is often done in way that is disconnected from the realities of the business”.  Getting rid of them altogether would be throwing the baby out with the bath water.

The performance review is generally a tool by which certain decisions are made – salary reviews, bonuses and promotions are often linked to outcomes of the performance conversation. In other words, there is an element of evaluation in that conversation. With or without the performance review, this evaluation is an important and necessary part of working life. Putting this into a structured process gives staff a voice in the process and a greater sense of ownership in the outcomes.

More importantly, staff need to know, in a timely way, what they are doing well and what they need to do differently to produce the best outcomes. No feedback conversations means no opportunity to improve. One of the biggest problems with the annual performance review is that people rely on this too heavily for coaching.  It’s too late to give feedback in one big bundle during the mid-year or end of year review.  By then the details are forgotten and the value of the feedback is lost.

So, if we want to help staff improve performance and develop new skills sets, my advice is not to do away with performance reviews but to develop managers’ skills in giving feedback and encourage frequent, timely performance conversations.


To learn more about giving and/or receiving feedback, you can read, Thanks for the Feedback

* Names and industries have been changed to protect the innocent.

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