The end of performance reviews?
NPR has a story on a new book called Get Rid of the Performance Review, by Larry Rout. The book is based on a popular WSJ article from 2008. The NYT picked up the story in May of this year.
My favorite comment in all of these articles is from the always wise Bob Sutton, who says in the NYT article, “In the typical case, it’s done so badly it’s better not to do it at all.”
And perhaps that’s the problem. Almost no one in the entire chain of events required to perform performance reviews believes in them enough to either a) do them well b) fight for change in the process c) propose an alternative.
When I worked at Microsoft, reviews were a formality with good managers. We’d agree on the minimum we needed to do early on, and that’s all their was. If I wasn’t doing well, I knew about it early, and we’d talk about it at least once a month. The actual review meeting never held surprises. With bad managers, reviews became a legal battleground, where positions were established, and claims were made, in an ever-escalating and desperate attempt to make up for something fundamentally broken in how the relationship was working.
In my years since, and my many travels to many corporations, I’ve discovered how ridiculously similiar the review process is in most major corporations. There is almost no innovation here among the Fortune 500. Yet every HR department will proudly proclaim how unique and special what they do is. That somehow their magic “evaluation criteria” are superior and less porous than any of their competitors. When someone takes great pride in the construction of a form, beware for your soul.
The surprise to most employees who have never been a manager is how little relevance what they write in the review has on their rewards or bonuses. Often the decision for promotions, or raises, is made weeks or months before the evaluations are due. Which might be fine, if this were transparent: but it rarely is.
Have you seen a performance review process in action that worked well? Or can imagine one of your own invention? I’d love to hear about it. Links welcome.
Scott,
I’ve worked for 3 family run companies, one state government agency, and one middle sized corporation and in every instance it is exactly the same as you describe in your good manager/bad manager comment. The line in the NYT article hits the nail on the head. Most employees figure the end result is preconfigured and the review process is set up to justify the end result. This is just a waste of everyone’s time, in most cases.
Thanks Marc.
The point I didn’t make is the paper trail argument. The review process is nearly identical in most major corporations since it’s likely driven by what the legal teams suggests is in the reviews, so a paper trail exists that is useful in wrongful-termination/etc. type cases. It’s a pet theory, but I’d bet on it.
“When someone takes great pride in the construction of a form, beware for your soul.”
You could probably do a whole post based just on this sentence!
In my (young) career, I’ve seen exactly what you describe. If it were up to me I’d replace the performance review with something much smaller and more frequent. Help my employees understand what they’re going to need to do to become successful and then work with them to keep them on track.
Rich:
The most positive spin I have on the review process is it guarantees. Some managers are hard to find, neglect their employees, etc. and the way they handle questions about the review process, or goal setting, etc. are telling. If your boss can’t find time to answer your questions on how you are being reviewed, it’s a good indicator to go and find another boss.
Fundamentally there is no remedy for bad managers except for firing them, or taking their team away. The review process, whatever it is, can be a way for employees to figure out if they have a good or bad manager.
Scott
Great post. Very well said:
There is almost no innovation here among the Fortune 500. Yet every HR department will proudly proclaim how unique and special what they do is. That somehow their magic “evaluation criteria” are superior and less porous than any of their competitors. When someone takes great pride in the construction of a form, beware for your soul.
I’ve seen the horror stories. I have hard the complaints as well. From my friends, GE’s process seems to work well.
Of course, a constructive review hinges on the ability to take critical feedback.
In my organization (7000+ people) it’s clearly the legal paper trail that’s needed. If they want to fire you, they need documentation that shows you’re a poor performer and you failed to improve. In fact, our whole performance review process was instituted after they (rightfully) lost a large law suit to a population of employees who were laid off under false pretense for the sake of downsizing. If you’re getting low performance results — beware, they’re basically building a case to fire you. The good news is, you have time to get it corrected. For the rest of the staff, it’s still a good time for you and your manager to have discussions beyond the scope of particular projects and the day-to-day work so you should make the best of it.
In our research the commonest complaint was that performance reviews weren’t USEFUL – to managers, and to employees. Solve for that and you actually might get something that contributes to improved people management and performance. http://www.sonar6.com/colorpapers/i-met-expectations has our top 5 ways to fix the process.
With the last company I was with, my boss/manager was a rather intelligent guy and he would review our code from the past year (I’m a programmer), and then go over his findings and opinions with us. It was actually a very positive experience and I usually walked away impressed with how much effort he put into it. It was insightful and benefited me more than the company. There is no doubt it made me a better programmer.
At that time he had the freedom to structure the review how he wanted to. Eventually, after a few buyouts, everyone was forced to use an online review system and it lost all meaning and usefulness. I’ve never had a meaningful one since and I am now doing them quarterly!
I was at Microsoft for about two years as a dev lead for a team of 5/6 engineers. I hated going through the review process with my team. By the end it terrified me.
My people’s ratings were decided by a big group of 7 or 8 people, where i had the torrid task of trying to justify the ratings I wanted to give them, to a) fit other people’s less informed opinions, and b) fit in to a stack rank of the wider organisation.
I then had to go in to reviews with them and give feedback which I sometimes didn’t agree with or didn’t think was entirely fair. How do you deal with a situation like that? I could either tell them I thought it was bullshit, or lie through my teeth and tell them that I agreed with the ratings. I mostly told them the truth, and we focussed on how they could impress other people, and help other people better see the value they bought to the team. I don’t know if that was the right thing to do, but it was the only way I could look them in the eye (just).
I still wonder whether this is really how it worked in the rest of the company or whether we were being somehow hoodwinked by the org boss (we’d been acquired) who was a hit of a control freak (though I got on well with him professionally and socially).
Either way I know I didn’t handle it well. My relationship with people in the team suffered (even to this day), and the whole dynamic of our team changed for the worse. I don’t want to shift blame, and maybe there’s something about this approach that I’m missing, but it undermined me and the team, and this changed everything. Eventually, I decided to move to an individual role because of this issue, and within weeks of that decided to call it a day anyway when something better came along.
It was a big deal for me, and if I ever go back to managing people again, it will only be in a circumstance where I understand and entirely agree with the review process. I completely agree with you, Scott, that there should never be any surprises for people in a review meeting, but with the Microsoft approach I was subjected to, that was sometimes an impossibility.
Scott,
Somewhat related – slide pack on Netflix’s culture reference guide: http://www.slideshare.net/reed2001/culture-1798664
There is a section in there on performance reviews. Considering that Netflix has quite good ratings as a place to work, there’s a chance that whatever they’re doing manages to achieve its goal.
Scott-great stuff. Re Andy’s comments on stacked rankings they have value if the raters are the ones who will make the call when it comes time for someone to go out the door. Feedback on where you really stand is highly valuable and Andy’s advice on how to improve perception is valuable too. Perception is reality for the perceiving manager and if you don’t get that you’re in for a rough life. I’ve lived with the “we’re proud of our process” forms and I’d rather have the ranking with the 8 managers’ comments they made to come up with the rank.
As a software development manager at Rackspace, I stopped doing performance reviews for a while believing all those articles that said “no performance review is better than a bad performance review.” Well, that’s true, but that’s not the right answer. The answer, of course, is to learn to do them well.
First of all, the “annual” performance review is a joke. I do mine once a quarter. A year is WAY too long to go without having a serious talk with your directs. Hell, a MONTH is way too long to go without having a serious talk with your directs. Weekly one-on-one’s are probably your best bet.
The performance review should not be an event. It should simply be a meeting to codify all the little discussions you’ve had since the last review.
Scott, you said “no surprises”. I hear that about once a week from the VP of HR. He tells us that the direct should never hear something for the first time during a review, and if they do, you’ve failed them as a manager. Ok, maybe that’s a little strong, but he makes a good point. “No surprises” is very important.
Setting goals is hard, but it’s one of the most important duties you have as a manager (after one-on-one’s and constant feedback). A goal should not be a job requirement in disguise. It should make your employees stretch, but it should also be achievable. You should check up on the goals often, usually during one-on-one’s. Your employees should be the ones coming up with most of the goals, though you may need to help them make the goals S.M.A.R.T. Goals should not dictate how you want something done, but rather what and why. Make sure your directs understand how meeting these goals impacts the business. I could go on and on, but the point is, goals are extremely important to the review process. You need to spend a lot of time with them.
Most of the really great managers I know are still up in the air about 360 degree feedback. I, personally, love it. A very large part of every review I do is constructed from feedback from the person’s peers. Anyone that worked closely with the person under review during a review period will get an email from me asking for feedback. Some people want to remain anonymous, some don’t. I try to encourage an environment where people aren’t afraid to give feedback out in the open, but it’s hard.
Keep the reviews free form. Don’t try and rank your directs, they hate that, and they WILL compare rankings. =) Trying to sum up someone’s performance on a scale of 1 to 5 isn’t going to go very well for you. Performance reviews are subjective, and there’s nothing you can do about that. Subjectivity should not be removed, only explained.
Please, I beg you, if you’re a manager, don’t discard performance reviews like I did, originally. They really are important, if for no other reason, they’re the one time that most managers really sit down and talk with their directs. Reviews are hard, but they don’t have to be. Create an open and honest environment with your directs, and performance reviews can actually be beneficial (hard to believe, I know).
I was very transparent with my teams about the timing. It wasn’t so much the evaluations that had odd timings as much as the ratings. Ratings were often assigned before the self-evals were seen by the manager.
1) I believe — and I shared this with my teams — that the person for whom you’re writing the self-evaluation is your next manager, the person who will hire you when you leave my team. (Granted, in the rare we-need-a-paper-trail case, that might not hold.) I also would edit my comments to correspond with self-evals, and sometimes vice versa, pushing the review back to the employee to address a particular point that I would make in my eval. I tried to write the evals in response to what employees wrote, but as you note, Scott, sometimes the timing made this very difficult if I wanted to be truly thoughtful about what I wrote.
2) Where does the expectation come from that self-evals will dramatically affect a review rating or rewards? If the manager doesn’t know what the employee’s been doing, and how well she’s been doing it, then there’s a much deeper problem. Likewise, if the employee is in doubt as to the manager’s evaluation before receiving a piece of electronic paper, that’s the real problem. Feedback and “reviewing” is a regular occurrence, not a once-a-year event, or it’s useless to everyone involved.
At work our “yearly reviews” happen every few years. I don’t mind them anymore. I work at a for-profit that bills the government therefore people cannot be individually rewarded. Any paper trail for firing is done in a special-purpose timely meeting. The review is for information and for setting goals to address shortcomings, usually trivial, sometimes big. The value for me has been learning, getting perspective on my work, and, being only human, learning what my blind spots are.
I have seen the paper trails and also, the bad managers. These are the people who will preach transparency but, will fail at the very outset. They will not provide you feedback about what went wrong and why? never ask for explanations if they have genuinely received any complaints regarding your work.
They will then use this information to lower the ratings, in order to, match the renumeration. In short, the whole process is a sham and you are forced to sit through it for the sake of bread and butter. Your article is like a nail on their heads. Thank you very much for writing on this otherwise, popular corporate legend.
I hope the policy makers are reading this.
The place I work right now has a fairly odd process. The key component is that the promotion process is transparent. There is a promotion board made up of elected engineers who serve a few years once elected to the committee. This is who decides who gets promotions. When you are eligible for promotion, it is up to you to put together a substantial promotion packet and submit it to the committee. If you don’t want the promotion, you don’t have to put your name in the hat or write up a dossier. Due to this promotion process, the performance review is mostly a chance for you and your manager to talk about what you have done, what you want to do, and how your activities can be structured to help you with the promotion process whenever you want to apply. It isn’t perfect, but it is better than any other one I have seen. Since the onus of putting forth names and making decisions has been removed from the manager’s hands, they don’t have to play the politics themselves. They can just give honest assessment, advice, and assistance.
Here is my take on the subject: http://blog.brodzinski.com/2010/07/performance-reviews.html
In short: I agree that bad performance reviews should be banned. I also agree that most performance reviews are bad. But I think it is not that hard to run a decent performance appraisal.
I tend to make the formal part, which usually means talking about money or money-related subjects, as short as possible and then switch to informal, open discussion which bears real value. For both sides.
Hereby I boldly claim my performance reviews don’t suck (that much) ;)
Giving regular feedback to your team, colleagues and boss is a great, easy way of improving everyone’s performance and building good work relationships. Here’s a link through to how giving rapid feedback can really help performance: http://bit.ly/aGoVN7.
I completely agree with you on this, especially about how with good managers the performance review really is just a formality. I’ve been working with a wonderful company for 5 years now and it’s just like that with the exception that my manager does give an honest review and will talk about things that need done differently, but as you said.. nothing is a surprise there. The one thing we do differently is a self-appraisal that goes along with this. It’s a little questionnaire with things such as “What are your goals for the next year?”, “What obstacles have you encountered this year and what steps did you take to overcome them?”, “What major accomplishments have you achieved this year?”, etc.. It seems less for HR than for just making us to think about the past year and what we could have done better or what we did extremely well. Either way it does keep us thinking in terms of goals, achievements, problems, and solutions.