Here are three ideas to make the process more meaningful.
This is the time of year when a lot of the leaders I work with are buckling down to write up annual performance reviews for the people on their team. This is a process that almost no one enjoys—neither the reviewer or the reviewee. Seriously, do you know anyone in any role who looks forward to an annual performance review?
There are a lot of reasons why annual performance review processes don’t work. Here are three.
First, they’re annual. Is there any other aspect of life where you expect great results from checking in for a half hour once a year? Marriage? Parenting? Working out? I didn’t think so. It doesn’t work at work either. If you want feedback and coaching to be effective it needs to be in the moment and ongoing. The annual review conversation should be a recap of coaching conversations you’ve had throughout the year.
Second, performance reviews are usually more monologues than dialogues. The reviewer comes in with a list of objectives the reviewee needed to achieve and then proceeds to move through the list. Quite often, the reviewer doesn’t have all the information needed to do a full assessment and the reviewee feels frustrated or dejected because they don’t get acknowledged for the range of things they’ve accomplished.
Third, in many organizations, the annual review process is directly tied to the compensation process. Everyone views the performance rating primarily as a mechanism to trigger the distribution of a bonus pool or eligibility for an increase to base salary. When the review process comes down to a rating or a number, nobody pays a lot of attention to the content of the review conversation. It’s more like, “Let’s just cut to the chase. Am I getting a raise or a bonus or not?”
If you’re a leader in an organization that puts a lot of effort into the annual performance review process, a lot of this probably sounds familiar. You may also feel like there’s not a lot you can do to change it. That may be true in terms of the process that you have to work within. It’s not true, however, in terms of how you can use the annual review process to set you and your team up for success.
Here are three ideas on how you can do that and, in the process, make your performance review process more meaningful.
First, make the process more prospective and less retrospective. If you’ve done a good job of staying engaged with your people throughout the year, you shouldn’t have to use the annual review to deliver a surprise message or drop the hammer about something that didn’t get done. Consider using the review to recap the year’s accomplishments and remaining opportunities and then pivot to the future. Use the one-on-one to talk about next year’s agenda and how the work that the reviewee has done this year aligns with and sets the foundation for what’s coming up next. Talk about their work and personal goals and connect them with the goals and the work of your group as a whole.
Second, separate the conversation from the compensation. You don’t need 30 or 45 minutes to tell them whether or not they’re going to get a raise or a bonus. Use the review conversations for developmental not evaluative purposes. Schedule another separate round of shorter conversations later to deliver any compensation-related news you need to share.
Third, remember that review conversations have a huge impact on your personal leadership effectiveness and establishing the perception of how you lead. What are you trying to accomplish with the review conversation? How do you want your team member to feel at the end of it? Motivated? Challenged? Excited? Appreciated? Get a clear picture in your mind about how you need to show up in the conversation to make it likely that your team member leaves the meeting feeling the way you hope they’ll feel. There are short-term and long-term effects of performance conversations on engagement and commitment. Be aware of what you’re trying to do and intentional about how you do it.
Interested in more on how to make the most of performance reviews? Check out this post I wrote back in 2013.