What’s wrong with annual performance reviews?
First of
all let’s start with the frequency.
Would you only talk to your children once a year about their behavior? No, I didn’t think so. So why do it with employees? Is an annual review really going to encompass
everything that you did over the entire 12 months, or is the focus really only
going to be on the last two or three months?
Discussing performance with employees should happen weekly, fortnightly
or at the very least monthly.
Performance
reviews are generally conducted by your direct manager, who more often than
not, are not trained in human resources management and how to conduct objective
appraisals and perhaps resent having to give up time out of their busy schedule
to firstly monitor and record the performance of each of their employees and
sit through the review process. Since
the appraisal process is generally a subjective measure, it is usually subject
to bias, whether it be gender, race or even office politics. A manager may wish to avoid conflict so
perhaps may add a leniency bias or may insert a centrality bias where employees
are generally clustered in the middle of the rating scale. While performance appraisal can be adapted to
look at purely objective goals, these goals generally only take into account a
small subset of the employee’s tasks. If
these goals and appraisal are directly linked to a financial reward, the
employee may simply focus on achieving those goals to the detriment of the rest
of their tasks.
Often
performance management and appraisal is directly linked to financial reward
such as bonuses or pay rises, however there is often no budget for bonuses to
be paid to all employees, leading to the necessary ranking of employees. This can then lead to a competitive,
individualistic culture within the organization that can hamper cooperation and
teamwork. If an employee receives a
negative appraisal and they don’t believe that the process was fair, it can
lead to mistrust between the employee and their manager thereby reducing their
motivation, leading to the appraisal becoming self-fulfilling.
Is there a
better way to manage performance?
Managers
still need a way to manage the performance of employees and setting objectives
and training goals with employees can increase motivation and job satisfaction. As with all relationships, the best way to
manage it is to have regular, open and honest discussion. While filling out forms once a year may still
be a requirement, performance management must be a continuous process.360-degree reviews where feedback is gathered from multiple sources: managers, peers, subordinates and customers, while perhaps still subject to individual biases, should be combined to give a more objective assessment. Employees often have more faith in the process and believe they are treated more fairly if they are given the opportunity to contribute and discuss their performance, rather than simply being lectured to.
Performance
management should be a positive experience for both managers and employees. By working on it as a mutual relationship, it
can be beneficial to both the organization and its employees. The organization will benefit when employee
goals are aligned with that of the business and employees will remain motivated
and engaged.
Does your organization
still do a traditional annual performance review? As a CIO or IT manager do you even have a say
in performance management or is it mandated by HR policies? Please leave a comment below or contact me on
twitter @theroadtocio
