It lasted half a week and it was a great place to meet others in the industry.
One talk was about how to foster collaboration and it was a panel of small to mid-size company leaders who felt their culture was paramount to their success and that they look at ways to foster collaboration through projects, company events, as well as through the open-office floor plan concept.
What I found disheartening, though, was every single leader of those four companies said they were doing either semi-annual or annual performance reviews and they all felt it was necessary for the success of their company.
What was interesting is the leaders even discussed how many different performance review approaches they have done in their company’s history and a few even laughed that they had tried the 3-tier rating system, the 5-tier rating system, or removing the rating system all together. For some reason this was called a success.
This is why you need to stop doing performance reviews.
They demotivate your people
Imagine if you worked on your house for one year and updated your kitchen, improved your bathroom to make it a personal haven with the color and style you have always wanted and you finally now have that bedroom, that oasis where the world’s troubles melt away as you sink into the most comfortable bed surrounded by colors and designs that bring you peace.
Now imagine your spouse telling you it is awful and you need to rethink the whole thing or they will leave!
That my friends is a typical performance review and even though it is not an all or nothing event as I described above, the anxiety your staff is feeling, even the great performing ones, feel that it is.
It is a top-down critique that never captures the true contributions of your staff and is based on things that happened up to twelve months ago. Just like the person who worked an entire year on their home improvements, don’t you think something could have been said prior to the scheduled performance review?
They institutionalize dysfunctional behavior
What I find amazing is people would never, under any circumstances, wait six or twelve months to communicate to anyone in their circle of acquaintances outside of work. This includes family, businesses you frequent, or service people you hire to work on home projects.
For example, would you wait six months before asking your child if they studied for their history test? Would you wait twelve months if you were unhappy with your spouse about the scratch on the car? Would you forgo half a year before telling last night’s restaurant that your food was cold? Would you let twelve months pass before telling the plumber that the pipes he installed are leaking?
Of course not, but for some reason we think that because it’s business, the place we spend the largest amount of our waking time, the place where we invest our time, our efforts, and in many cases, large sums of our own money, we think it makes sense to let things sit and fester for months and months because it is more appropriate to do so.
Is it any wonder work is our most dysfunctional relationship?
On the other end of the spectrum, would you wait almost a year before telling someone you care about that what he or she is doing matters and that you need him or her and that he or she integral to the success of the team? We do it all the time!
They allow managers not to manage but twice a year
People say, “If something was serious enough I would try to resolve the issue as soon as possible.” But where is this line? What is considered serious enough? Who gauges this invisible line? Who manages as to whether something should be raised before the next performance review? And at what cost are people allowing smaller issues be left alone to fester?
The problem is performance reviews set up a dysfunctional relationship between management and non-management and it allows for the complete breakdown of effective communication, via an institutionalized set of rules that tell employees and managers that performance related talks are only discussed once or twice a year.
That is not managing and it sets up a system that allows managers to only discuss performance-related issues twice a year which gives them 358 days to relax, sit back, and not manage.
They focus on improving things you are the weakest at rather than on your strengths
Many people say the performance review includes an improvement section and a career planning section, and we can discuss this at the performance review time.
I say, why wait? So you are telling me you knew for six to twelve months that a person on your team, the team that you are relying on to help you reach your team goals, is having performance issues but you are going to wait six to twelve months before talking about it with them? And even then, once you talk about it, how soon will the improvement plan be implemented?
Also, I would rather help my team improve on the things they do well rather than the things they don’t do well. Otherwise you get a team of mediocre performers.
In the end, do you want a team of people who do average work on things they hate doing or a team of people who love what they do and are always improving?
They go against the culture you are trying to foster
During the collaboration talk I mentioned earlier one of the leaders said they have a flat hierarchy because they don’t have titles. My immediate thought was, “Sir, you have performance reviews, you have hierarchy!” I did everything I could not to jump up and tell him. That’s how passionate I am about this topic!
For me culture is key to the success of every company. Knowing who you are, not who you want to be, and finding the people who can enhance that is paramount to your success. But for some reason businesses allow HR to institute policies and procedures that go against that all-important culture.
For an industry that survives and thrives on innovation, when it comes to HR, the tech industry does anything but innovate. They think the professionals know what they are doing and we need to follow the tried and true methods that all HR teams use. Well, I have one word to say about that… WRONG!
Think how every HR decision you make will impact your people and how it supports or rubs against the culture that has made you successful. Understand that these decisions will not only impact your people and your culture, it will impact their productivity, their passion and commitment, and ultimately your customers and your bottom line.
Stop towing the line and start innovating in everything HR. Your staff, your company, your customers, and your future will thank you!
So how do you get rid of performance reviews and create a true team of collaborators? That is in my next blog, entitled A Better Way to Manage Performance.