On May 5, 2016, the Colorado Rockies scored 13 runs in the fifth inning against the San Francisco Giants, setting the franchise record for the most runs scored in one inning. Not surprisingly, the Giants pulled pitcher Vin Mazzaro in the sixth inning and on May 6, sent him packing. What is the lesson in this painful Giants story for HR managers? The lesson is that the Giants didn’t wait until the end of the season in October to call Mazzaro into a meeting and tell him they didn’t like his performance in May. Mazzaro got immediate feedback and the Giants took swift action.
Imagine if performance appraisals worked much the same way with immediate, actionable feedback instead of end-of-year paperwork and unmotivating rating systems. What would the impact be on your organization and your employees?
The Why of Ditching Traditional Performance Reviews
It may sound scary or revolutionary to think about doing away with traditional performance reviews, but the idea isn’t entirely new. In fact, in 2015, GE nixed their review process along with Netflix, Adobe, and Accenture. In 2016, the Harvard Business Review reported that as many as one-third of U.S. companies have followed suit.
- Annual reviews focus on past performance instead of current accomplishments and behaviors, failing to set the stage for employee growth and leadership.
- Writing, reviewing, filing, and sharing reviews takes an inordinate amount of time. In fact, a Deloitte executive estimated that managers at the firm were spending 1.8 million hours completing reviews that brought little value to the business. Your business may not spend as many hours, but the impact is likely significant.
- Annual reviews don’t recognize teamwork. Focusing on individual performance and asking employees to rank themselves in relation to their peers may have worked in the last century, but today’s organizations tend to be team focused. Pitting employees against one another in reviews is counterproductive to this sensibility.
- Traditional reviews are rigid, usually with a hard deadline for completion. This inflexibility doesn’t allow for projects that may span longer periods of time and require employees to work with several teams and managers.
- Employees don’t want to feel like a number. Bob Seger sang about it way back in 1978 and it’s still true today. Having performance boiled down to a few digits isn’t motivating or inspiring for most employees. Businesses are striving to build strong cultures and engage employees, and an employee rating system flies in the face of those efforts.
Performance reviews weren’t created with bad intentions. Employers didn’t set out to create a painful process that produces little value for supervisors and employees. Instead, the intentions were to 1) uncover who the best employees are so they can be promoted and compensated appropriately; 2) identify the low performers that may need additional training, job reassignment, or to be terminated from the company; and 3) motivate employees by recognizing good work, making them feel valued and recognized.
Chances are good, however, that most organizations know who the best employees are without reading an annual review. They also know who the underperformers are.
And if an employee is doing a good job, why wait a year to tell her?
Enter the Better Way
Businesses have indeed taken their cue from baseball managers and realized the value of immediate, ongoing, and transparent feedback for employees. Frequent check-ins between managers and employees allow for conversation and coaching and provide time for reflection on projects and performance. This type of communication system allows for more agility and recognizes that in today’s business environment, employees’ roles are fluid and teams change over time based on company goals and needs.
Having a method in place to easily provide and track ongoing feedback may help businesses make the leap from a traditional process to a more informal one. Today, software allows managers to quickly give employees feedback. A less painful process for managers may mean that they are more willing to give ongoing feedback and allows employees to view their performance in real time.
If you’re thinking about ditching the annual review process, you’re in good company. Traditional is fine as a decorating style, but may not be effective in today’s business climate.