Four Lessons I Learned When my Company Replaced Annual Reviews with a Continuous Approach to Performance
It’s been my experience that most executives feel performance reviews are a waste of time. They find the typical annual review process overly complex, inefficient and ineffective at actually improving performance. All they really want to know is what individual employees are good at and where they have opportunities to develop. And as a talent management professional — I completely agree with that!
When a performance process is backwards-looking it is of very little value to employees. It becomes a compliance-based, check-box exercise designed to protect the organization rather than help people develop their skills and careers. Things have to change.
I led the effort in my organization to move to a more continuous approach to performance management rooted in frequent, ongoing and lightweight conversations. As any HR professional is aware, changing any ingrained process can be a challenge. Here are the key lessons learned from setting up, rolling out and refining our continuous performance practice.
- Frequent conversations take less time and add more value
No one looks forward to annual performance reviews. Managers spend hours preparing them, employees get little value from a backwards-looking discussion and the high stakes nature of a once-a-year evaluation makes everyone stressed and anxious.
Tell managers they need to have more performance-related conversations and their hearts may sink. But changing the nature of these conversations to be more frequent and lightweight creates less stressed managers and more engaged employees. In my organization, our quarterly check-ins involve just two questions:
- What are you doing well?
- What could you do better/want to do better?
Instead of a lengthy review that tries to cover all competencies and core values but ends up as a tiresome box-filling exercise, our conversations get straight to the heart of what’s important for the employee, the manager and, importantly, the business.
- Managers need training to be great coaches
Taking a continuous approach to performance is usually new to most people. Like any new experience, some advance guidance and knowledge can make it easier to adjust so it is important to take the time to train your managers prior to roll out.
Teaching managers to give and receive feedback is always worthwhile as managers account for 70% of the variance in engagement among employees. The better able a manager is able to motivate, engage and develop an employee, the more your business will see improvements in employee performance and overall business results.
- Create a culture of feedback
It’s not just managers who need to learn how to coach others. Your entire business needs to be immersed in a culture of feedback. Ultimately the objective is to create a business that is more effective because information about everything, from company strategy to employee performance, is transparently shared and discussed.
To create this culture of feedback, we anchored our performance process around our three core values: Bravery, Honesty, and Focus. Everyone is encouraged to focus on what’s most important to them and the business, to be honest about their opinions and be brave enough to ask hard questions and share potentially uncomfortable feedback.
On a more practical level, we regularly ask employees for feedback about their managers. We then use these comments as part of our ongoing training, so managers are constantly improving how they engage with and motivate their teams.
- Technology should support your process, not lead it
The beauty of a continuous approach to performance management is that it’s flexible and can be molded to meet the specific needs of your organization at any given time. As we moved to a more continuous approach for performance, we found that our HRIS just wasn’t agile enough to support the new, continuous process the business needed. Rather than adapt our process to suit the tool or make do with a clunky implementation, we looked for technology that was a better fit.
After a thorough search we identified Betterworks as our solution to provide a simple way for managers and employees to easily record all performance-related interactions and track past conversations in one place. Their experience is lightweight for end users, yet it still provides our HR and talent teams the valuable insights into individuals, teams and the overall business. It’s important that you focus on defining your process up-front to ensure it meets the needs of your business. Otherwise you may find yourself making do with whatever basic module your HRIS offers.
Continuously develop your process, as well as your people
A year into our new approach to performance management, we’ve had great feedback from managers and employees. Both feel that the frequent, lightweight conversations are a more valuable use of their time. I’ve also had employees tell me that they no longer dread their reviews, which in the past resulted in an official rating, but now are simply focused on how they can develop their skills and careers.
As with any new way of doing things, it will take time to get it right. It’s important to emphasize to everyone involved that you don’t expect perfection from day one. In fact, listening to feedback about the process itself will contribute to its success. As it grows and evolves, your continuous approach to performance will help create a motivated, engaged workforce who will stay with your organization and are ready to tackle today’s goals and tomorrow’s challenges.