Recent NPR story about (lack of) value in performance reviews caused a stir. Esther Derby reminded her long-time hate relationship with performance appraisals pointing that not only employees but also a lot of managers hate them. What more reviews are tied to merit pay which is also evil.
Well, I think it is oversimplification. We think performance review and we see corporate environment with multiple levels of management, constant fight for budgets, tough negotiations about rises and likely yearly appraisals which are so outdated that hardly bear any value for employers. If we discuss this kind of reviews, then agreed, they suck. They should be banned and people enforcing them should be forbidden to manage teams for at least 5 years.
Now, tell me I’m lucky but I had probably just a couple of these crappy appraisals. And hopefully I have performed none of those by myself. By the way if I did it to you, feel free to kick my butt if spot me somewhere.
Actually I tend to agree more with Scott Berkun who says that it is better not to do performance reviews at all if, and only if, they are done badly. It basically means most of the time we shouldn’t run performance appraisals but I boldly state I can to do better.
So this is the time I should answer simple question: “How the hell do you do this damned thing?”
Don’t make it all about money
To some point I agree with Esther. If performance appraisal is reduced to a discussion about merit bonus or raise it is fruitless at best. Money-related negotiations always suck and this isn’t an exception. If you follow some formalized process you likely have to talk about money too, but then make it as short as possible. It is no fun for both of you so make it quick and move on to more pleasant parts of the ceremony.
It is your goddamn duty to listen
I am a chatty guy so this one I should tattoo this on my forehead to remind it to myself every morning when I look into the mirror. Performance review is one of the best occasions to listen what your team mate has to say. Let me guess, you, as a manager, don’t have a lot of one-on-ones with folks from your team. And even if you have, there are people down there who are always omitted. By accident of course. When you run performance reviews you suddenly have to meet every single one of them, so don’t miss this chance. Learn what they want to tell you. Let them talk. Listen. Not everyone will be open but at least give them opportunity to talk.
Make it more a chit chat than a formal meeting
One thing I learned during my early years as a manager is that when people are stressed they won’t tell you much. Yeah, that’s an epiphany, isn’t it? The most valuable things I learned about people, about teams and about me as a leader I heard during informal chit chat which I often turn my performance appraisals into. When we have the hard part (money-related) done we can talk more openly. Actually we may discuss your last holidays for an hour if you like. If nothing else I will know that you love hiking next time we meet in the kitchen. But we may also discuss situations when I screwed up as a boss or new technologies you’d like to learn.
Let them set the rules
You have different people in the team. There are those who don’t really care. Performance review is something you both have to get through but they don’t give a damn. The money doesn’t matter. Your opinion doesn’t matter. A discussion doesn’t matter either. What then? Don’t waste time of both of you. Say what you have to say and get back to work. But there are also people who want to talk. Let them talk. Listen. Learn. There are people who need a discussion about different things. Be a partner in this discussion. There are people who look for information. Share it. Besides the small part you have to go through, it’s not you who should write the agenda.
Be open, be transparent
If you are about to say a bit more than on weekly team meeting would there be a better chance than during one-on-one? If you are about to show your human face would there a better time? If you are about to discuss your motives standing behind tough decisions would you wait for another occasion? Yes, we managers are scared to shit when we share our secrets (or things we think are our secrets). But believe me; we should do it more often. As one of the best game strategies of all time says, if you play fair you will get the same in return. Be honest, be open and you will get exactly the same from your team. Isn’t that a fair deal?
With these few simple rules I believe I’m able to run performance reviews which people don’t hate. Actually the last performance appraisal I’ve run I’ve started saying “As you already know no bonus money this time, so we can skip the formal part. Now, let’s talk.”
I think it was pretty good appraisal. And yes, I’ve learned a lot. I’ve learned a lot despite I know the guy pretty long time already.
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15 comments… add one
Hi Pawel – aside from the bad word you used, this is a pretty good post. Your idea of listening – to EVERYONE on the team – is a great one. Sometimes it’s the last person you’d expect who can come up with an amazing idea, suggestion or solution.
Good points.
Although there is one more thing that people so often forget about. First rule of giving feedback: more positive feedback (what is good that is) then negative (what can be improved). Ratio shoud be 3:1. No metter how crappy is your employee. Might feel a bit not intutive at first (why should I give 3x more positive feedback, while I see 3 times more bad things?), but works :)
Laura,
I’m sorry if wording has offended you but that’s how I write.
But coming back to merits, this is the thing I caught myself at – there are people who I tend to talk with more on everyday basis, but there are also those who I never talk to unless there is an occasion triggered by some external event, i.e. performance review. Unless you change your routines and consciously start talking with them performance appraisals can be the only situation when you’re enforced to drop whatever you’re doing and talk with those folks.
Marek,
I’d say it depends. And yes, this is my favorite answer to any question.
It depends because I know people who I can freely revert the ratio. I can tell 3 times as much bad things as good ones. And it would work well in their case. You just need to know them well enough to be able to decide you can focus on fixing wrong things instead of keeping correct positive to negative feedback ratio.
Actually I consider myself as this kind of person too. If you happened to be my manager I wouldn’t care much about praise you’re going to share. Not that I don’t give a damn. Hell, I do. Everyone likes to be praised. But I am aware that praise doesn’t move me further as an employee, as a manager and as a person.
Things I want to say are critical and negative. This is exactly what helps to unwind myself.
But of course, in common situation, if there is no strong relationship between manager and employee you’re right. If you praised me 3 times as much as you criticized me I’d probably consider it was like fifty-fifty. That’s how our brains work.
Paweł,
You make some good points there. I agree with your approach in that indeed if you decide to hold occasional appraisal meetings, this approach looks honest and more useful than the bog-standard, form-driven approach organisations so like to use.
I would like though, to see you address the fundamental question – what is the purpose of such appraisal meeting? If the only reason to hold them is because it is the HR policy and a corporate requirement – even the best approach to running such meeting, and after you take money out of the equation, will be futile.
As I manager my approach (and only responsibility) is to create an environment where people care and are intrinsically motivated to improve. Suddenly feedback becomes cornerstone for progress and people value every opportunity to understand their performance and improve it. Not for the money.
Marek,
This is a very good rule and I have successfully applied it in the past. I would recommend however to apply this rule diligently not “No mater how crappy is your employee.” but thinking – “What have I done wrong, or what have I not done, to see people who are not performing as well I’d expect”. No amount of positive feedback wile have any positive result if it is not sincere.
Also guys – it is time to stop talking about “negative feedback” – it should be abandoned – try and apply “positive feedback” and “constructive feedback” – yes – even this slight alteration of wording will make a difference not only to how the employee will receive your feedback but also how you will give that feedback yourselves.
Marcin,
Basically there are two possible motivations to run performance review:
1. Because this is how it works in the organization and you have to do it
2. Because you, as a leader, want it and see value in it
If the former is the case you likely can’t take money out of equation. To some point you have to stick to the procedures. So you probably have some formal system which “helps” you to form your feedback in some structured way. But then my advice is, make it as short as possible and get to the point 2.
I run appraisals because I see value in them. I hope this value is there for both me and a team member. But this isn’t an occasion to motivate people. Actually if manager’s motivational efforts and feedback delivery are limited to quarterly or yearly performance reviews I wouldn’t like to work for this kind of manager.
For me it is about learning. Learning how we work, what do we expect from each other. Learning how we judge results of our work. Learning what we care about beyond our work.
From this perspective I can’t say the review was futile even if I did it because HR policy. Because if nothing else I learn something about folks I’m working with.
On the other hand I agree that performance reviews done only because HR dept said so with no intrinsic motivation of a manager suck. And they better be avoided.
And talking about negative feedback – that’s only wording, but you’re right. What we think of is critical feedback. If feedback has no positive goal, i.e. improving the way one works, it should better be omitted.
Pawel,
I wonder how better corporate/companies/institutions would be if they employ the same method you highlighted here. Sadly, the state of businesses still stick to the adage of performance review == authority. Some managers (or should I say still a lot of them) tend to think that by doing performance reviews, they are asserting themselves over their subordinates or the teams they lead. This has been one of men (and women) in power play with to appease their egos and satiate their lack of competence in people management.
What’s odd is that performance reviews does not totally replicate what a person has done through the whole period of review. Most of it reflects only the latest ones which the person has been involved or doing. Just for example, a guy developed a pricing system that was so good 11 months ago and suddenly the business changed and the same system is not adept to the needs of the business, the review would tend on the latter side where the system did not work anymore. I find this quite not right, but is human nature.
Angelo,
Actually no one forbids managers in corporate structures to use the method. Heck, I personally used similar approach when I was a part of corporate world.
But you’re right, most managers neither see any value in nor care about performance reviews. And these reviews should never happen.
You’re also right that yearly reviews suck. Personally I always tended to do reviews quarterly since monthly regime seems to be too frequent. But year is definitely too long.
Hi, Pawal –
I’m all in favor of talking about performance. Openly, frequently, informally and as a two-way street. (See: http://www.estherderby.com/2004/11/an-alternative-to-the-yearly-performance-review.html & http://www.estherderby.com/2010/06/a-managers-guide-to-getting-feedback.html)
I do think that companies would be better off without time-consuming rituals that don’t actually accomplish their stated goals. There’s ample evidence that yearly or even quarterly performance appraisal schemes, with rating, ranking, and so-called merit pay don’t improve overall performance.
While these systems don’t achieve their stated goals, there’s also evidence that they have significant unintended consequences that depress performance. They often damage relationships, erode trust and demoralize people.
Further, they ignore the role of managers in creating the environment. Many performance failures are the result of poor management, not poor worker skills or poor worker motivation.
As with everything, there will be individual exceptions where a particular individual improves as a result of something he hears in a periodic review. If companies want to improve performance, managers need to focus their efforts on the work system, not the just the workers. They need to create an environment for success–not just tell others what to do and then pass judgement on their performance.
Cheers,
Esther
Esther,
There are two perspectives:
1. Performance reviews are crappy in general. An average performance review works as a great role model for your rants. And as I said I think they should be banned.
2. Performance reviews can be much better. If we don’t just stick to rituals and try to get some value from these meetings it isn’t that hard to make them valuable. For both sides.
So while I can agree that in general performance appraisals do more harm than good I can’t agree on throwing out the baby with the bathwater. I believe we should spend more effort on educating managers than on getting rid of performance reviews.
After all if a manager isn’t able to deal with performance appraisal without damaging relationships, depressing performance and eroding trust it is the problem of the manager, not the review. You can’t blame the tool.
Pawel,
I am beginning to dive into Deming and am wondering how do performance reviews fit in with the concept of managers as systems designer! Deming was generally against the idea of performance reviews and several people have attempted to find a happy medium…
I am still trying and havent found/struck the perfect balance yet.
Srikanth
Srikanth,
It all comes down to your definition of performance review. If you treat reviews purely as a tool to distribute merit pay it doesn’t suit the model of a manager as system designer.
However my point is performance reviews should be treated differently. They should be an occasion to exchange feedback and learn about each other possibly in very informal way. If you choose this approach you change the purpose of performance appraisal – you make it all about learning the current state of the system. Without this information you can’t really (re)design the system itself.
One may say that I change the real meaning of performance review but I see it more like making good use of the old corporate ritual which is usually already implemented and pretty much everyone is familiar with. What more, I do see value of this approach to performance appraisals not only for managers but most of all for team members.
Pawel, an interesting read and some good follow up points from contributors.
One point to mention in the ‘project management world’ is how few performance management systems incorporate project management (by this I mean measure the performance of people engaged in projects – managers or project managers or sponsors).
I recently asked the HR Manager who was on a project management training course whether project management performance was measured in their system. Very embarrassingly she said they did not appraise project management in their appraisal scheme! This is from a company which is moving much more into project management…
We need to work harder to get this aspect included in performance management systems.
I recognize, like you and many contributors that it’s the interview that counts however the interview is often kick started by the software purchased………..
Ron,
If a scheme of performance review is decided by some implemented system (doesn’t really matter if it is software or just a formalized process) it will be a bad review.
Of course when the organization expects to see all reviews done in some manner manager shouldn’t omit the part. But as I stated above – in this situation the best we can to is to make this obligatory part as short as possible and then get through to the part where the real value is.
In retrospective I see virtually no value in sharing “grades,” or whatever other form our appraisals had, with my team members. It was either accepted or it triggered discussion but only because it was directly interrelated with money.
So whatever system organization follows, it shouldn’t be the key thing during performance reviews.