Why have performance reviews?

Recently, there’s been a lot written about how bad performance reviews are.  I agree.  In fact, the traditional performance review is perfectly designed to deflate employees, depress managers, and provide no meaningful improvement to either performance or development.  But if you think people don’t like performance reviews, try not having them–people won’t like that either.

The key is to refocus on the purpose of performance reviews (and it’s not to determine how to dole out the merit increase budget, which is a big part of the problem.)  A hint:  If your performance review process isn’t resulting in better performance and better alignment with your business strategy, you should get rid of it and start from scratch.  And if you want ideas on how to do it, send me an email (bob.legge[at]leggecompany.com) and I’ll send you my article on how to do it.


Why managers need to get beyond criticism

I believe that criticism is one of the lowest level skills–because anyone can do it.  And criticism has little value for a supervisor or manager whose job it is to improve the performance and value of subordinates.  The fact that performance reviews are often built around criticism is a clear sign that the manager’s skills are in need of improvement.  People who have a performance difficulty need help to identify and correct the cause of weak performance.  It can be a skill deficiency, a process problem, a lack of motivation, whatever.  In any case, what’s needed is a system for coaching not criticism.

How Management Ideas Get Bastardized

Microsoft jettisoned its version of “rank and yank” last week; a practice of forced rankings that resulted in internal power struggles and unhealthy competition. Leave it to us humans to take a good idea and turn it into its opposite. A good example is “management by objectives,” Peter Drucker’s idea to improve individual communications, but which has become a stick to assign tasks and get compliance. That was not at all its original intent. Which brings us back to “rank and yank” which was based on a leadership approach promulgated by Jack Welch to communicate a very clear picture of where an organization is going (its mission) and the behaviors critical to getting there (its values,) followed by clear and candid feedback about how well each person is helping the organization. Nice, except the forced ranking of people got all the attention instead of the original intent. The same is true for performance reviews in many organizations which do nothing to improve performance because the real purpose is to dole out the merit increase budget.

In each of these examples, the real value and original intent were lost.  When you launch a new practice in your organization, be vigilant to make sure it’s purpose isn’t hijacked.


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Why Your Performance Reviews REDUCE Performance

One doesn’t drive a car by looking in the rearview mirror, so why do that with performance reviews? When a manager emphasizes mistakes, shortfall, weaknesses, and problems, it does not cause an improvement in employee performance. What it does cause is damage to the relationship and bad feelings all around. Many managers know this, so instead they provide unwarranted positives, rating everyone better than average. But that doesn’t help performance either. If you want better performance, and that should be the number one reason for doing performance reviews, then you need to look ahead. Instead of dwelling on the negative past, provide ideas for improving performance in the future. Only by putting the focus on improvements going forward will you see better results. This takes a mindset shift often requiring training and practice. But it leads to immediate and significant benefits for the organization.


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Why Leaders Can’t Be Honest and Candid

Candid, honest feedback about performance is all too rare in most organizations.  The reluctance to talk to a subordinate about poor performance, the ‘grade inflation’ inherent in performance reviews, and the withholding of honest praise for excellent performance are examples.  These can happen because of fear to be candid with people.  It’s why you can have nearly everyone’s performance rated “above average” in a year when organization performance is weak.

The flip side is the leader on a power trip who loves having control over people, so he keeps secrets, won’t discuss issues, shares little, and often lashes out with a heavy hand to punish people he doesn’t trust.  That’s not a leader, that’s a boss.

Both cases have a negative effect on people and performance.  They drive out trust and cause people to ‘check out’ while on the job.  I once had a person complain to me about receiving an excellent performance review.  There was little doubt that her performance was excellent, but she was demoralized because her manager gave the same rating to every one of his direct reports.

Leaders lead; they know that providing candid and honest feedback with their people is important to improving performance.  While some managers and supervisors are clearly on a power trip, others avoid candid discussions because they do not know how to effectively discuss performance and coach performance improvements.  If you have this going on in your organization, you need to address it.

Here’s How to Change Your Performance Reviews So They Improve Performance

As the fourth quarter begins, many companies are preparing for another round of performance reviews. You know, the administrative exercise that nobody likes. The problem isn’t with the concept, but rather with how reviews are conducted. Few managers or supervisors ever learn how to effectively write and conduct reviews, so they end up being an administrative chore that doesn’t help improve performance, increase accountability, or build skills. Here are three best practices to make performance management reviews powerfully effective:
1. Base reviews on performance results and behaviors that reflect the organization’s values. Jobs exist to get results, so identify the key results expected for each position. And you want those results accomplished in a way that reflects your values, evaluate each person on those. Use measures for results and evidence for behaviors–not opinions. Keep it simple and effective.
2. Focus on improving performance, not casting blame or judging. Think of performance reviews as the feedback loop necessary to make improvements, just as with any improvement process. Blame and judgment immediately eliminate any positive impact because they stop communication.
3. Train everyone in a supervisory role in the skills to conduct reviews. When people don’t know how to conduct performance reviews, they tend to do all the wrong things and it creates dread and upset instead of better performance and results.
For more on building an effective performance management process, send me an email or call me.

The Perfect Program to Turn-Off Employees

Most performance appraisal programs are perfectly designed to de-motivate managers and subordinates alike.  Managers detest them and employees dread them.  If you don’t believe me, ask your people.  It doesn’t have to be this way.  In fact the performance review can be a highly motivational tool, and a key part of executing strategy. 

They’re deeply flawed because they have lost their purpose and are primarily used to allocate ‘merit’ increases.  This causes perverse influence, dysfunction and mistrust everywhere:  managers rating everyone the same so that all would get the same increase, managers obviously playing favorites to give certain people more money, etc.  It’s gaming the system to dole out meager increases, rather than increasing the value of your talent.

The primary purpose of a performance review should be to tell people where they stand, how they fit in the organization, what they can do to improve, and what they can do to get ahead.  It should be a level-set and development-oriented.  It needs to be a tool to increase the value of your talent.  Performance reviews should drive merit increases, not the other way around.  This requires a culture of trust and honesty, managers who are trained to grow talent rather than control it and employees who are energized about the company, its direction and its leadership.