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Performance management

Redemption of the performance appraisal

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Not every company can just go ahead and dump the annual performance review process. Co-authors Ben Whitter (organisation and people development manager at University of Nottingham Ningbo China and Foo Chek Wee, (ZALORA Group’s HR director) carve out alternatives you can implement in your existing systems to rejuvenate the performance process.

In a stunning development, Accenture has dumped the performance review. CEO Pierre Nanterme described the move simply as, “we’re done with that”.

These four words may prove to have a major impact across business and HR teams in the months ahead.

If you can’t feel it yet, get ready. A movement is underway. In research by CEB, 6% of the world’s top companies are making similar changes to the ways they manage performance.

Microsoft, Adobe, Gap and a host of others have already ditched their review processes, including General Electric, which has been a huge advocate of it for years.

If you don’t think 6% is a lot, then examine the employee populations involved, and the fact that they are iconic businesses, meaning others are about to follow the same path quickly.

Most HR people will not be surprised by this. Ninety-five per cent of managers, according to CEB, are dissatisfied with performance reviews, and nearly 90% of HR people are seriously questioning the accuracy of the performance information that comes out of the process.

Microsoft, Adobe, Gap and a host of others have already ditched their review processes, including General Electric, which has been a huge advocate of it for years.

At a time when companies such as Zappos are abolishing management altogether (and managers for that matter) in favour of self-organisation via holacracy, a simple change to eliminate performance reviews within a company is not very ground-breaking, surely?

It is and I’m pretty sure you know why. The annual performance appraisal has for the longest period been a source of much conversation for all of us, as managers and employees.

Currently, organisations are doing everything, nothing and something about it – a huge mix of practices to say the least.

Google, which is constantly referenced for its people approach, has eliminated a quarterly 41-point scale in 2013 (yes, 41 points) to rate their people; instead opting for a simpler five-point scale.

While its process is still a work in progress, recent industry views show it is still committed to the review. Microsoft, not so much. Reviews went out of the window two years ago, which led others to follow suit.

In one session several years ago with a private-sector client, co-author Whitter recalls a conversation about the success of a values-based system across 10,000 employees.

This HR-owned process was an interesting sell to the business. One attendee said candidly that he didn’t even have the discussion about the company’s values with his large team and nor did any of his direct reports – though that conversation was meant to be the core part of the process.

“Why should I when my manager doesn’t even take our values seriously?” he asked. Meaning is garnered from everything and across everywhere within a business.

What happens in HR, stays in HR

So if reviews are out, what’s in? A focus on the individual. Accenture explains this involves more regular support for staff, timely feedback on progress all-year round and a commitment to select the best people in the first place.

Once selected, trust them and give them freedom to operate to their full potential. With two-thirds of Accenture’s workforce comprising Millennials, traditional approaches just don’t cut it anymore in this context.

The great news is we already know the best thing to do: Build the new approach to performance management with your people, not for them.

Why? Because the meaningfulness score of performance management is high. Very high. That implies, it has to mean something to your people, be a solid part of your employee experience, and ultimately help you deliver superior performance.

The great news is we already know the best thing to do, and Accenture’s Nanterme perhaps favours this approach after taking advice from Ellyn Shook, his CHRO, and that is very simply this: Build the new approach to performance management with your people, not for them.

But until you’re in a position to rethink your entire performance review process, what can you, as a people manager, do to achieve meaningful performance review sessions?

The seeds of an idea

Performance is often a one-sided boss-administered/employee-received performance review. We know this leads to employee disengagement.

In response, Samuel A. Culbert, in his book Get Rid of the Performance Review!, proposed replacing the traditional performance review with performance preview, a two-sided, reciprocally accountable dialogue aimed at eliciting what both boss and employee can and will do to achieve agreed goals together.

This approach essentially entails three steps. First, to agree on unit or team performance goals used as a yardstick in measuring not the employee, but the unit or team (i.e. manager and employee).

Second, involve the skip-level manager (i.e. boss of the manager) to monitor the progress of the manager/employee team, ensuring the unit is achieving the goals it has set.

Third, conduct regular performance previews by having the manager ask three questions: What are you getting from me (manager) that you find helpful and would like me to continue doing?
What are you getting from me (manager) that impedes your effectiveness and would like me to stop doing? and, what are you not getting from me (manager) that you think will enhance your effectiveness, and tell me what you would like me to start doing?

So what now? The above progressive notion of a performance preview is of high leverage and impact for an organisation. It requires a mindset and organisational change on how the traditional performance review is to be done.

However, not all organisations are ready for such a progressive approach.

What are you not getting from me (manager) that you think will enhance your effectiveness, and tell me what you would like me to start doing?

As people managers, we do not have to wait for a sea change to start having constructive feedback sessions with our own people.

We can execute the continue-stop-start feedback technique immediately and we’ll be amazed how such a simple approach can bring positive change as a part of our session.

Here are some pointers you may want to consider as you execute this feedback technique:

  • Give a heads up. Prior to the review session, pre-empt your direct reports on how the session will be done and ask them to think through the areas he/she would like to highlight in the session.
  • Preparation. Prepare for it by drawing a three by three grid on a piece of paper, with continue, stop, and start as row headers and the employee and your names as column headers. It will be helpful for you to pen your initial thoughts on the grids with specific examples or incidents.
  • Be candid, constructive and complete. The purpose of this 45-minute session is to allow your direct reports to learn your expectations from them. Equally important, do allow time for your direct reports to give you their candid feedback on what they want you to continue, stop, and start to support them better. To encourage your direct report to come forth with candid feedback, lead by example by analysing your own behaviours and staying constructive throughout.
  • Follow through. At the end of the session, both parties would have touched on several key issues. Agree on action steps, commit to resolving issues resolved, and book a time for you and your direct report to review the committed actions.

Inevitably, more organisations will follow Accenture, but until that day comes, people managers can achieve similar results within their current system by simply focusing on delivering a more meaningful feedback experience for their team.

Let’s not wait. Let’s engage our people now.

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