Ask anyone what they think of a performance review and you'll likely get a shudder or grimace. Employees often resent them, managers hate the many hours it takes to do them, and HR struggles to get the value that ideally should be gotten from them.<\/p>\n
In this guest post by Eric Jorgenson<\/a>, creator of the Evergreen Business Weekly<\/a>, he takes a deep dive into what the experts have said about the performance review, how they're reinventing them, and even how some well-known companies are replacing them altogether.<\/p>\n If you enjoy this deep dive on the performance review, I highly recommend you sign up to receive all his posts here<\/a>.\u00a0 Evergreen has also guest-posted on Lighthouse on Employee Retention<\/a>, Firing<\/a>, and Organizational Communication<\/a>.<\/p>\n Evergreens<\/strong><\/em> are designed to feel like short books, you're meant to meander and spend ~3 hours on this topic this week<\/em><\/strong>. Save some of these links and read them throughout the week. Immerse yourself in this topic and leave the week smarter than you started!<\/em><\/p>\n No one looks forward to their performance review. Yet the idea behind them is simple and optimistic: provide feedback, coaching, and what the results of past performance mean for an employee's future compensation and career.<\/p>\n Apprehension about performance reviews often leads to sub-par effort by managers, and dismissal from the employee's side\u200a\u2014\u200awhich is neither helpful nor productive. It turns out that with some awareness of the potential pitfalls, reviews can be easy, productive, and beneficial.<\/p>\n This Evergreen is everything you need to know to make your performance reviews simple, easy, and productive. And maybe even not terrifying. Here's what we've got in this Edition of Evergreen<\/a>:<\/p>\n Enjoy the read, and hopefully you'll find something you can apply to your team.<\/p>\n The best place to start for most management topics is, of course with Andy Grove of Intel and his classic management book, High Output Management<\/a>.<\/p>\n He devotes an entire chapter (Chapter 13: Performance Appraisal) to guidance on how to do performance reviews, and why they are so important to a manager's toolkit. This is the best resource on the traditional performance review, full of fantastic insight and advice from a man who has a lifetime of lessons to teach on management.<\/p>\n Grove strongly believes in the importance of Performance Reviews as he wrote:<\/p>\n The fact is that giving such reviews is the single most important form of task-relevant feedback<\/strong> we as supervisors can provide.The long and short of it: if performance matters in your operation, performance reviews are absolutely necessary.<\/em><\/p>\n<\/blockquote>\n As Grove puts it, the most crucial function of performance reviews is to improve employee performance. Every other function is secondary to that.<\/p>\n In order to execute excellent performance reviews, we have to start with the assessment process itself, as Grove states:<\/p>\n Determining the performance of professional employees in a strictly objective manner is very difficult because there is obviously no cut-and-dried way to measure and characterize an employee's work completely. Many jobs involve activities that are not reflected by output in the time period covered by the review.<\/em><\/p>\n<\/blockquote>\n ...The biggest problem with [assessments] is that we don't usually define what it is we want from our subordinates, and, as noted earlier, if we don't know what we want, we are surely not going to get it.<\/em><\/p>\n<\/blockquote>\n He continues, emphasizing the importance of evaluating an employee's output, not hypothetical future output:<\/p>\n One big pitfall to avoid is the \"potential trap.\u201d<\/strong> At all times you should force yourself to assess the performance, not the potential.<\/em><\/p>\n<\/blockquote>\n ...and recognizes that performance has to be tied to results of their team:<\/p>\n The performance rating of a manager cannot be higher than the one we would accord to his organization!<\/em><\/p>\n<\/blockquote>\n After assessing the performance, and creating the worksheet (read more about this in Grove's book<\/a>) that organizes and prioritizes the potential topics of conversation, you're ready for the meeting where you delivery the assessment. Here's what Grove has to say about that:<\/p>\n There are three L's to keep in mind when delivering a review: Level, listen, and leave yourself out.<\/strong><\/em><\/p>\n<\/blockquote>\n Level: <\/strong>You must level with your subordinate\u200a\u2014\u200athe credibility and integrity of the entire system depend on your being totally frank. [\u2026]<\/em><\/p>\n<\/blockquote>\n Listen: <\/strong>This is what I mean by listening: employing your entire arsenal of sensory capabilities to make certain your points are being properly interpreted by your subordinate's brain. [\u2026]<\/em><\/p>\n<\/blockquote>\n Leave yourself out: <\/strong>It is very important for you to understand that the performance review is about and for your subordinate. So your own insecurities, anxieties, guilt, or whatever should be kept out of it.\u00a0<\/em><\/p>\n<\/blockquote>\n This chapter is stuffed full of helpful advice that we've just covered the tip of, so if you don't already own High Output Management<\/a>, it's worth buying for this chapter alone.<\/p>\n There are a lot of benefits to the performance review as put forth by Andy Grove, and no doubt Intel was better for them under his instruction. However, there are many people who disagree, and believe that performance reviews are flawed, broken, and possibly even useless.<\/p>\n It may be that they're only effective if executed thoughtfully and carefully, as they were under Grove, and the benefits quickly become harmful if they're half-assed. Or maybe they are best in a large and heavily measured business like Intel.<\/p>\n Let's look at some of the dissenting opinions and see what we can learn about the problems that they see with the traditional process:<\/p>\n Performance reviews are the medium for quite a few tasks that could be handled separately. Here are a list of issues that are commonly handled in a performance review:<\/p>\n That's a lot. A performance review is packed with content, and some messages tend to tower over others in the mind of the recipient. Especially if you have information about a raise or bonus in a conversation\u2026 they're not likely to remember anything else that you said.<\/p>\n As David Maister puts it in his book, True Professionalism<\/a>:<\/p>\n It is a truism of management that the worst possible way to give someone performance feedback (and have it accepted as constructive critique) is to save it until the end of the year and give it all at once, just at the very moment when his or her acknowledging the critique will in one way or another affect compensation.<\/em><\/p>\n<\/blockquote>\n So how do you handle this issue of performance vs. compensation review?<\/p>\n Google has come up with an interesting solution to this problem as Laszlo Bock explains in his book about the People Operations team at Google, called \u2018Work Rules!<\/a>'. Thanks to Itamar Goldminz<\/a> for the contribution!<\/p>\n Google has learned that it's beneficial to separate these two very different concepts into totally distinct conversations\u200a\u2014\u200aseparated by a month. In November, employees have their performance reviews, with the standard conversation about areas of improvement and emphasis on good work. In December, a conversation is had about compensation and role changes. They tried a number of different times for the separation and this ended up being the one that fit.<\/p>\n Judging by the literature coming from the field of Psychology, academics have launched an all-out assault on performance reviews; some articles read like they are determined to see them banned from the earth.<\/p>\n This short post from Psychology today<\/a> cites a few studies that show some of the negative consequences, such as decreased productivity and loyalty to the company. Adobe even found that voluntary attrition was significantly higher <\/a>in the period after performance reviews. [Thanks to Natala Constantine and Jason Evanish<\/a>, respectively, for these two contributions.]\n Stack ranking is unpleasant for employees and managers don't enjoy it either. This video from the \"Stuff I learned the hard way\" Youtube channel captures well why it's painful to stack rank<\/p>\nThe Performance Review<\/h1>\n
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The Classic Performance Review<\/h2>\n
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The Performance Review for Non-Believers<\/strong><\/h2>\n
Conflation of Performance and Compensation<\/h3>\n
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Our Psychological Limitations to take Criticism<\/h3>\n