April 11, 2016

The debate about performance reviews and systems seems to be never-ending. Recently, there has been a movement to eliminate annual performance reviews altogether and encourage other kinds of informal feedback instead. Most employment attorneys that I know shriek at the idea of this less formal system since it's hard enough to train managers to give people effective feedback once a year, much less on a more informal basis. (Although I do know one outlier employment attorney who believes that we should just throw performance reviews out anyway, since they're all "padded.")
The reason attorneys object to an informal system is that such a system usually results in leaving your organization with no documentation if there's a complaint. While frequent feedback would be useful, managers just don't tend to do it or document the conversation effectively, in my experience. Most discussions of eliminating performance reviews, don't even consider this issue, ignoring yearly documentation until there's a lawsuit, at which point deciders tend to "get religion."

A thoughtful examination of parts of this whole performance feedback debate was outlined in a recent Harvard Business School article, https://hbr.org/2015/04/reinventing-performance-management
The piece detailed the authors' experience rethinking the performance system at Deloitte. While there's much to chew on in the article, two ideas stood out for me:

1.  The highest performing teams strongly agreed with this statement: "At work, I have the opportunity to do what I do best every day," pointing to the importance of making sure that the right people are in the right jobs. These teams were 44% more likely to earn high customer satisfaction scores, 50% more likely to have low employee turnover, and 38% more likely to be more productive.

2.  Instead of asking managers to rate past performance, one of the most reliable indicators of true performance was to ask about future performance by having managers answer this question: "How much do you want this person on your team in the future?" 
Performance management systems are expensive. The Deloitte study found that their managers spent more than two million hours a year filling out performance reviews, meeting with employees and calibrating performance ratings for their 65,000 employees. In addition, the authors detailed the studies that show how subjective performance reviews tend to be, revealing more about the rater than the person rated.

One of my performance management recommendations: 
weekly one-on-ones 
between managers and employees

Ironically, after all this study, Deloitte came up with one solution I have recommended for years: weekly one-on-ones between managers and employees. In those meetings, managers should do what they're paid to do: manage. They should listen to employee issues, track assignments, anticipate problems and so on.
From a legal perspective, the problem with any kind of performance management is documentation. Managers simply fail to do it correctly resulting in major problems if there's a complaint. One way we train managers to make the whole process less painful is to conduct weekly meetings and then have the employee email back to the manager their understanding of what was said. While these employee emails can be depressing because of frequent miscommunication (when the manager realizes that the employee didn't hear what the manager thought they said) this system gives the manager an opportunity to sort out misunderstandings and guide the employee back on track.
This ongoing employee email technique also helps improve the manager's ability to communicate and the employee's listening skills. At the end of the year, when performance feedback rolls around, managers have this beautiful email documentation trail and who has done all the work? The employee. Such a system also helps employees decide that managers are being fair and that they are  trying to communicate well.

Did You Know?

All of our management workshops cover how to give employee performance feedback effectively, as well as documentation rules and tips. We also have the option to provide these workshops in a webinar format. Call or write us for more information. 303-216-1020 or [email protected]

Check out Lynne's books on how to handle difficult conversations with employees.

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