Should You Ditch Performance Reviews?

Should You Ditch Performance Reviews?

Our recent episode with Drift founder David Cancel put performance reviews on our mind. Well, really it put them out of our mind. In recent years, companies have begun to realize that traditional annual performance reviews aren’t all they’re cracked up to be. David advocates for the benefits of reviews…but with a special emphasis on coaching. What’s the benefit of drifting away from typical reviews? Read on…

What’s wrong with the traditional performance reviews?

If your own experiences with annual reviews haven’t already convinced you that they’re terrible, then let me share some numbers with you. In a survey conducted by the Human Capital Institute, 78% of HR managers said they think the annual performance review isn’t effective in improving employee performance. Another 56% said annual reviews aren’t an accurate reading of performance.

Companies are adopting less formal, more frequent reviews

So what to do instead of the annual review? This is where the “coaching” mindset takes over. Many well known companies have started conducting casual, more frequent reviews. Companies like Adobe, Patagonia, GE, and Microsoft are seeing the benefits. In a report of 27 companies, 100% that adopted continuous feedback systems said that performance conversations improved, and 73% saw increased employee engagement. Adobe even created a framework for their “check-in” process that creates an ongoing dialogue between managers and employees.

Develop your skills 

So, how does one get started adopting a new review method? Rebecca Zucker, executive coach and partner at leadership development firm Next Step Partners, says that it’s a skill that takes time to develop. You’re going to have to put in the time, just like learning any other skill. 

You need goals for your discussion. Harvard Business Review recommends that you come up with some goals for the discussion before you draft your review. You want to make sure that your feedback comes across clearly—especially if an employee has done well in one area, but not another. Documenting goals and taking notes in and before the conversation will help you make sure that your team members don’t confuse the areas where they’ve done well with the ones that need improvement.

Invest in tools

If your mind is racing to figure out how to deal with a paradigm shift away from appraisals and towards coaching, don’t get too worried. You can take it slow. Josh Bersin, principal at Deloitte says, “Companies pursuing such changes shouldn’t expect to make them overnight…H.R. departments have to reorient around new software and new processes.” Forbes also stresses the importance of taking advantage of the latest tech tools.

A good tech tool might be one of the biggest keys to help make the shift towards coaching. Look for software like Waypoint, which helps managers schedule on-on-ones, take notes, and set goals for themselves and their team members.

The Harvard Business Review insists that we all remember the importance of documenting your meetings. HBR recommends that you record your feedback so that it can be shared and saved. “Record your observations about your employee’s job performance as objectively as possible,” says HBR, “and tie your conclusions to hard data. Provide evidence of progress (or lack thereof) by connecting accom­plishments with established goals: ‘Derek increased sales by 7%, which exceeded his goal of 5%.’” You don’t want to be caught unprepared for legal questions when it’s time to give a raise or let someone go.

Look for technology that will help you keep on track with your coaching and one-on-ones, and provides a platform to track your goals and progress. A good tool, strong documentation, and consistent feedback will help you get the most out of your time spent coaching your employees.