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Join The Movement To Dump Annual Appraisals

Sometimes I think I’m all alone in the wilderness or part of the large and vocal chorus of complainers. These days I’m seeing many kindred spirits who are taking a bold stance when it comes to debunking the value of annual or semi-annual performance reviews. Some companies are even going so far as to eliminate them entirely. Hip hip hooray! Be the first on your block to join the movement.

Here is a great summary of what is happening and a strong point of view about what replaces this appraisal process from one of my colleagues in the UK.

Speaking as someone who was in charge of talent and performance as well as a consultant on the topic, here is what I have observed.

  • I haven’t heard anyone say “Gee, my review was so valuable.” Instead I hear a steady stream of complaints. From managers it is about the time suck and imperfect electronic system and drudgery of the entire process. From employees it is about how long it has been since their managers actually completed the form and the mandatory discussion and their disagreement with the numerical rating they received and their complaints about the one minor critical piece of feedback they received. In short, supervisors and employees agree that the value derived from these reviews is negligible.
  • In theory, these reviews are for development, assigning merit (sic. bonuses), creating the succession plans and differentiating between high and low performers. In reality, not so much. Listen, go back 20 years ago and there was no formal way to do any of these things. Most organizations were over and under valuing employees because they had no hard data. As the cottage industry grew around performance reviews (I can’t even imagine the billions!) companies were promised that this metrics-driven process would be the Holy Grail of an integrated “talent management” system. And who doesn’t want to focus on talent? Over time, I saw more bells and whistles added to the process. In the real world, low performers have years of glowing reviews and high performers with high ratings are not landing on the succession list. “She’s not ready yet. Let’s open an external search.” The gap between what is entered into the electronic system and how decisions about talent are made is wider than you think.
  • Countless hours are spent to create the 50 questions that can be used across all disciplines so the form can be a one size fits all. This is pure folly. Is it part of everyone’s job description to “think strategically” or “run the business as if it was your own” or “develop your people”? What about a highly technical individual contributor or someone without decision making authority or a writer? I remember all too well the complaints around the building when I was tasked to insist that everyone use the same form. Leaving an item blank wasn’t an option either because the system wouldn’t let you proceed to the next page until you had filled in every box. And don’t even get me started on 50 questions! I know of some companies that tried to solve this one-size problem by creating a dozen different forms: departments, disciplines, level, etc. Again, really???
  • Psychometricians extol the virtues of a 5-point rating scale. In the real world, managers default to 3’s and employees are incensed with anything less than a 5 and any review with 1’s and 2’s is wrong on so many levels. So where is the meaning and value in these numbers? I can answer that. They look great on the spreadsheets that HR and finance create to determine merit increases and bonuses and stock options. But if you ask if those numbers accurately reflect the performance and/or value of the employee (especially when compared to all folks with the same rating) the answer is no way. On the surface these ratings are expedient. In reality people are given (or not given) increases and promotions and bonuses on criteria that don’t appear anywhere on this appraisal. Those decisions are based on equally subjective anecdotes and “gut feelings.”

All of this is to say that we have come full circle. If organizations were too lax about a formal, standardized and fair way to assess staff performance 20 years ago, then all the fixes put into place have become over engineered, too generic and meaningless. Not to mention a total burden on everyone.

Some companies are now using a quarterly check-in conversation instead. This means that once a quarter managers have a free form discussion with their direct reports to cover a range of performance and developmental topics. From everything I see and hear, this method is far preferable to the outdated annual appraisal. It’s a good start.

But my concern about this new structure of talk-once-a-quarter is that managers will believe that is enough. To speak with your boss in any depth only once every three months is a problem. In an ideal world managers are offering ongoing feedback, touching base frequently (2-3 times a month), finding challenging assignments routinely and having casual chats by the coffee pot.

If all these systems and conversations are intended to develop the talent (or counsel people out) in the organization then constant interactions are the best way to achieve that. Yes, I know this means learning how to communicate effectively enough. Yes, I know this means having some tough conversations more often than desired. Yes, I know this means you can’t do this via text or email. Yes, I know this means having lots of human contact.

Oh well. “You may say I’m a dreamer. But I’m not the only one.”

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