What’s the worst kept secret in talent management? It’s the fact that annual performance evaluations with ratings are subjective, demotivating, destroy collaboration and innovation, and are time consuming. Ultimately, they do little to motivate, align and improve the performance and innovation of employees.
Despite recent research and the fact that many well-regarded companies have abandoned the practice, such as GE, Ford, Microsoft, Accenture, Adobe, Deloitte, Expedia and IBM, this annual ritual still persists. According to the Economist, 9 in 10 companies still do performance evaluations with ratings.[i] (In order to learn more from the empirical research on forced rankings, see “Forced Ranking: The good, the bad, the ugly, and what to do about it!” http://wp.me/p5FLSC-1j ).
So, what works for performance management?
The following are my recommendations to align, motivate and engage employees, inspire innovation and drive performance.
Provide continuous feedback, coaching and development—not an end of the year data dump. Businesses operate in a constantly changing, global world. No one should set goals that stay the same all year – the business world is too fluid. Feedback and coaching must also be continual. Managers should hold regularly scheduled one-on-one meetings with every employee (at least weekly or biweekly). These meetings are an opportunity for employees to give their managers updates on their work, discuss obstacles, and ask for assistance and coaching. Managers need to vary their coaching and development advice based on the skills and experience of each employee so that it is relevant and helpful. With ongoing feedback, the annual performance review, which I still advocate, but without ratings, is no longer an argumentative, dreaded process. Instead, it becomes a discussion on competencies mastered, achievements, further development, and career aspirations.
Don’t depend on a manager’s feedback alone to make judgements about performance and who is or isn’t high potential. There is too much office politics and a halo effect when you let managers alone assess performance and potential, in part because managers see the ratings of their employees as a reflection of themselves. Initiate at least semi-annual performance meetings among managers to share their reviews of employee accomplishments, how employees achieved results, and their development progress. These meetings are twice as effective when there is a well vetted and understood set of work-based competencies in place—not just intuition. The competencies should be derived from an analysis that identifies the knowledge, skills and attributes that make your best employees THE BEST. This analysis can be done quickly and without a lot of effort.
Train your managers to be “builders” and to use what I call the “ACE” methodology:
- A-Alignment Business is fast paced. Goals are no longer relevant for the entire year. Managers need to continually align employees to changing market conditions, customer preferences, and the company’s strategies and goals.
- C-Constant Communications and Clarity. Change is a constant. It requires constant communication and clarity on issues such as roles, information sharing, timing, operating norms, decision rights and progress.
- E-Empathy and Empowerment. Mangers who show empathy, provide recognition, and let employees have a say in how they achieve their goals engender more engagement and achieve better results. We know this from numerous studies on emotional intelligence.[ii]The same goes for successful teams. (See my blog “What makes a Team Smart,” http://wp.me/p5FLSC-7.)
Finally, select managers who have the interest and skills to be builders. Builders align their teams with the organization’s purpose and strategies and constantly provide clarity on goals, roles, responsibilities and operating norms. They empower their teams and take an active interest in employee development. Hold managers accountable for being builders, as well as for their employees’ performance and results! Don’t use management roles as a plum reward for the technical expert who does not have these skills.
Have you recently updated your performance management system? What has worked for you?
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne.US. He consults on talent management, leadership development and coaching, innovation, and other strategic initiatives. Please e-mail Victor at email@example.com or visitwww.victorhrconsultant.com. For innovation visit www.InnovationOne.US.
[i]“The measure of a man: Reports of the death of performance reviews are exaggerated” The Economist. (Feb. 20, 2016). Found at http://www.economist.com/news/21693151-employers-are-modifying-not-abolishing-them-performance-reviews-not-dead-yet.
[ii] Daniel Goleman (2006) Working with Emotional Intelligence, Bantam Dell, Division of Random House, Inc., New York.