ICYMI: Performance reviews are out, frequent check-ins are in

It’s that time of year again, HR has kicked off the annual performance review process. It’s your opportunity to have irrelevant meaningful conversations full of constructive feedback about your performance over the past year. Or, is it?

 

Each year managers and employees alike relentlessly complain about what they consider a tedious, unnecessary and unrewarding process. And, guess what? Some business leaders are starting to take notice!

 

For the past few years, the death of the traditional performance review has been a widely speculated topic among HR folks. Back in 2013, a CEB study found that 23% of HR pros surveyed were satisfied with their organizations’ performance evaluations, which was down from more than 50% the previous decade. Last year, Deloitte made headlines when the organization announced that they were going to do away with formal performance rankings.

 

In case you missed it, not much has changed this year. IBM, General Electric, Gap and Accenture have publically come out saying they are blowing up their performance review process because it wasn’t producing any valuable information. Let’s explore their rationale behind such a major decision.

 

Performance reviews put people against each other

An article published on The Huffington Post notes that, “researchers and companies say that ranking people essentially makes them feel bad — and it also pits workers against each other.” Assigning someone a numerical ranking makes people feel threatened, experts say, which is why so many organizations (notably Microsoft) have turned away from stack-ranking systems.

 

Performance reviews are expensive

Both Gap and IBM have released information citing just how much annual performance reviews cost their organization, and the numbers are startling. After looking at data, The Gap told The Huffington Post they realized employees spent 130,000 hours of time in the annual review process, costing the organization almost $3 million a year. During the Fortune Global Forum last November, IBM Chairman and CEO, Ginni Rometty, divulged that during her tenure the organization has divested $8 billion of the company’s business hours on performance reviews. Both organizations have moved to a more collaborative and less formal review process aimed at providing feedback to employees when and where they need it. Sounds like a dream, right?

 

What to do before you jump on the anti-performance review train

Adobe is another organization that made a public announcement ditching annual reviews and moving towards more frequent, meaningful check-ins. The idea is to provide relevant feedback throughout the year, so managers can mentor and assist employees as needed. But, hold the phone before you ditch your annual performance review. In a Harvard Business Review article this week, Graham Kenny cautions business and HR leaders to be careful before they make a drastic change. He asks the most basic question: why do employees dislike the traditional performance appraisal? The answer: performance reviews focus on activity, not outcome. Therefore, they can become demeaning. In the article, Kenny offers up two pieces of sound advice to organizations moving from traditional performance reviews to non-traditional check-ins. “Firstly, organizations should look at measuring ‘outcomes,’” and “Secondly, develop reviews based on the relationship each team has or unit has with its key stakeholders.” Dive into the full article for more great advice and examples on how to make this change work!

 

What do you think – are performance reviews going extinct?

 

ICYMI: Deloitte ditches performance rankings

In case you missed it volume three! The hottest headlines covering workplace culture, performance and management.

Performance review overhaul

Do you dread your performance review? Do you question its authenticity and impact on your team? Do you find it outdated and meaningless? According to research, only 23% of HR pros surveyed say they’re satisfied with their organizations’ performance evaluations. This week Deloitte decided they had enough and overhauled the structure of their performance reviews. An article from The Washington Post highlights the new process:

 

“Deloitte’s new approach, which it has piloted among roughly 10 percent of employees so far, would do away with “cascading objectives,” those nonsensical attempts to create similar goals for everyone in the organization. It would also ditch laborious 360-degree reviews, in which everyone from managers to peers to underlings weigh in on one person’s performance. And after realizing the company was spending 2 million collective hours each year assigning numerical ratings to each employee, it looked to get rid of those, too.”

 

Deloitte decided to do away with formal rankings and instead ask each employee four questions:

 

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.
  2. Given what I know of this person’s performance, I would always want him or her on my team.
  3. This person is at risk for low performance.
  4. This person is ready for promotion today.

 

Deloitte is a trusted advisor to organizations big and small. It will be interesting to see how this shift plays out in HR departments, especially learning, development and performance functions!

 

Huh? Poor Performing Employees Use Internet Explorer?

Cornerstone OnDemand claims to have the research to back this up. An article from The Atlantic argues that people who use Firefox or Chrome are better performing employees. The article states:

 

“But in the world of Big Data, everything means something. Cornerstone OnDemand, a company that sells software that helps employers recruit and retain workers, analyzed data on about 50,000 people who took its 45-minute online job assessment (which is like a thorough personality test) and then were successfully hired at a firm using its software. These candidates ended up working customer-service and sales jobs for companies in industries such as telecommunications, retail, and hospitality.

 

Cornerstone’s researchers found that people who took the test on a non-default browser, such as Firefox or Chrome, ended up staying at their jobs about 15 percent longer than those who stuck with Safari or Internet Explorer. They performed better on the job as well. (These statistics were roughly the same for both Mac and PC users.)”

 

Kris Dunn, CHRO of Kinetix and founder of Fistful of Talent, offers some fantastic interpretation of the survey on his blog, The HR Capitalist.

Enough already! Stop sending late-night emails

 

There’s a difference between high-performers and workaholics. Intentional or not, sending late night emails is keeping your employees chained to work 24/7. According to a new article published by Harvard Business Review, being “always on” actually diminishes creativity, productivity and performance. That makes sense. We all need some distance away from work to avoid getting burnt out. Check out the rest of the article, which features tips on how to help your employees apply their brainpower and attention in a meaningful way!

 

That’s all for now!

Why Development Planning Shouldn’t be an Afterthought

Most of us who have spent time in the HR or training space understand development planning often manifests itself as an ugly compromise within organizations. Those who see learning and development as a line-item expense, rather than an investment in future performance, fight to minimize the impact development planning has in terms of taking people away from productive work.

 

Whether you just finished your performance review, or you have one right around the corner, I often see that this is the only time employees have even somewhat of a conversation around development.
If the bullet points employees add to their plan wind up shoved in a drawer, or submitted online (buried in a virtual drawer), the result is often the same: a forgotten conversation that manages to exclude learning and development – the very people the organization has hired to help grow employees’ skill sets.

 

So it’s easy to despair or dread launching into an uphill battle for new processes or new tools. However, I believe effective development planning can still be done with nothing more than a generic “areas for development” box on an annual appraisal. Employees and managers simply need a little help.

Here are 5 ways to get employees engaged in the process:

  1. Send an email or other communication to employees as the annual appraisal approaches letting them know about the L&D team, where to get information on training that is already provided, how to request additional training, and to consider these things as they complete the development part of the appraisal.
  2. Expose job descriptions and requirements somewhere employees can easily browse and apply for open opportunities. Remind them of this during development planning season.
  3. Point employees to an easily-searchable resource that lists available training interventions for desired skills, competencies or jobs. If all you have is a spreadsheet, make it available! Your learning management system (LMS) provider will likely have tools to make this process easier.
  4. Suggest a structure for filling out that aspect of the form. Something like, “I want to get better at ______ so that I can _____. To achieve this, I am going to ______.” Asking for the “what, why and how” of each part of the plan elicits important context.
  5. If you can’t capture what’s being added to plans via an automated system, send out a standalone survey asking what development needs are out there and what learning opportunities are desired.

 

At the end of the day, development planning is much less about a system, and more about employee-manager conversation, and the ability to create meaningful, actionable next steps. That meaning, the “What’s in it for me?” becomes more apparent when it’s framed around future aspirations.

 

When L&D can set the table for these conversations, everyone benefits.