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Wednesday, December 13, 2006

Performance reviews reviewed

Harvard Business School's Working Knowledge newsletter has an article by James Heskett titled What's to Be Done About Performance Reviews? that is worth reading. James first tries to clarify why we have performance reviews in the first place:

Perhaps a more important issue is the objective of the review itself. Is it to weed out poor performers? To recognize the so-called A players? To provide the basis for compensation decisions? To provide clues to future opportunity within the organization? To map out an individual plan for personal development? All of these? Too often this is unclear. Is it any wonder then that managers, many of whom receive little or no training in how to do it, conduct the task of reviewing performance so poorly?

Most of the performance reviews that I have been involved in have not gone as well as planned. Why?

Their goals were not well defined: Why exactly were we conducting the review? The reviews were used to determine salary, promotions, past employee performance and future employee development. With virtually everything riding on one review, it is unsurprising that most of us hated it, much like a final exam at school.

They are too infrequent: A recurrent theme in the comments is that performance feedback should be a continuous process between the manager and the reports, not a once a year event. The feedback should be a conversation, not a test. Employees also need feedback at the time of the event, not many months after.

They are too backward looking: The reviews that I have been involved in have tended to be too backward looking. They spend far too much time analysing what happened in the past and not enough time about what should be happening in the future.

Some interesting comments. Jon Clemens says:

In my experience, the nature of reviews at most companies is overly burdened with administrative headaches involved with passing documents back and forth, knowing when things are due, and getting access to timely, relevant information. This in large part contributes to the standard practice of pain that is associated with many company's reviews.

Thad Juszczak says:

Too often I have seen managers tell employees "good job!" and the employees have interpreted that as "outstanding performance!" Managers should not be waiting for the once or twice a year period when feedback and performance results are formally recognized. If either the managers or employees are "surprised" during the formal review process, then someone was not doing their job or listening.

Anonymous says:

The most effective model I have had to implement was Deming-philosophy-based and assumed that everyone did a satisfactory job and did not tie performance to reward. However, we did add to that skill-based pay or project/performance goals (3-5) that would support the organization or department strategic initiatives or self-development. Also, good performers were able to get promoted. This is when we achieved the most growth in our department and organization; employees were put in control of whether or not they achieved their goal and therefore their reward. Performance issues were addressed in real time, not once a year at review time.

And finally, B.Greenspan says:

I have known many colleagues in other organizations where the review systems are essentially "fear based." How can a person get a helpful review when the manager is more fearful of his or her review?

I'll close up this post now. The original article has 93 comments plus a closing summary so do check it out.

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