Paul Hebert, 2015

Paul Hebert | Founding Member, HRExaminer Editorial Advisory Board

You won’t believe me, but I’ll say it any way. Ninety percent of this post was written prior to the big announcement on July 21st that Accenture will stop doing employee performance reviews. I did not write this post knowing they were going to do exactly what I have outlined below. If I had that kind of predictive power I’d be counting lottery winnings on a yet-to-be-named private island.

The article says Accenture will:

“(D)isband rankings and the once-a-year evaluation process starting in fiscal year 2016 . . .. It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.”

About time.

See… I’ve been thinking about this whole review thing for a while, and other than employee engagement, probably the most talked about and beat up idea in the HR space is performance reviews. They’re the annual ritual where employees get to hear all the ways they are letting their employer down, and are handed the list of impossible activities for improvement, that no one will probably ever follow up on anyway.

Performance reviews should start out as a simple conversation between colleagues about “what’s happening,” but ultimately becomes a power struggle between boss and servant. And we’re not content with making the process suck only a little. We start to do them quarterly because it isn’t humiliating enough every 12 months. Then, to really amp up the negativity, we bring in spectators and add a 360 degree element – just to be sure everyone gets their shot. But wait! Now we have to enlist big data and include all your kudo’s from your Peer2Peer rewards program and your “badges” from your social recognition program to counterbalance all the negative notes you got from the guy whose red stapler you stole.

Oh it is glorious, and horrible.

More work and more effort has never gone into anything so absolutely useless.

Yet it still sits there. Staring at you. Reminding you to do one, two, three different versions depending on the division, the manager, the day of the month.

What is it with performance reviews? Why is this such an issue?

As both as the giver and the receiver of performance reviews, we know as sure as the sun will come up tomorrow. And again. And again.

In those immortal words: “we just can’t quit performance reviews.”

Is it About Them or Is it About You?

We try. Continuously. We offer up suggestions and ideas. I know, what about reviews in the moment? In real time! Pulse reviews! Reviews based on astrological sign, or maybe your height! You name it – someone has offered up a solution for the performance review problem. While Accenture went nuclear on the review, two other recent articles focus on simply changing the review. They each take decidedly different approaches.

First, is the recommendation from Bersin by Deloitte. Their new and improved approach to performance reviews is all about simplicity… and … themselves.

They have boiled down performance reviews to four (4) questions. Each question is about how the person being reviewed can have an impact on the organization. The questions are:

  1. Given what I know of this person’s performance, and if it were my money, would I award this person the highest possible compensation increase and bonus? (Should the company spend the money on this person?)
  2. Given what I know of this person’s performance, would I always want him or her on my team? (Does this person add value to the company – always?)
  3. Is this person is at risk for low performance?(Will this person suck in the future and not add value to the company)
  4. Is this person ready for promotion today? (Should I ask them to do more for the company?)

(The statements in parentheses are my interpretation of what those “employee facing” questions actually mean.)

The answers to those four questions determine that employee’s fate within the Bersin walls.

I don’t know about you, but I think there is more nuance than that in my day-to-day performance. They say country music has no subtext – but this performance review process is even too thin even for a hit country song.

And all the questions are really about the company. So inwardly focused. Not a single mention of what that employee needs or wants. How do you think they view employees in that environment?

Flip The Coin

Next we have almost a 180 degree shift in an article on FastCompany called “The Case For Subjective Employee Evaluations.” This post focuses on a evaluations as a “debriefing” process. The focus is on the “mission,” and how it was accomplished, looking at all the performance characteristics of the team – not just the individual. Many of the questions are about improvement and self-analysis by the employee versus documenting the “opinion” of higher-paid minds.

The questions from this process include:

  • What specifically have you accomplished?
  • What have you learned?
  • What didn’t you accomplish related to your objectives?
  • What do you wish you had done differently? Why?
  • What skills do you need to develop/improve?
  • How will this affect your next project?
  • How can I better help you?

The difference in approach and focus cannot be more striking.

In the Bersin case, it is all about a “reviewer” determining value. In the second case it is all about helping a person examine their performance and being a part of the evaluation.

A Coin Can’t Have One Side

Which is right. Neither? Both?

To my mind – the mashup of these two approaches makes the most sense. We have to make decisions about employees and their contribution, fit, purpose, and connection. And we have to do it in a human way.

Accenture approaches reviews with more frequent, project-based discussions. “The firm will disband rankings and the once-a-year evaluation process starting in fiscal year 2016, which for Accenture begins this September. It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.”

It will be interesting to see what the content of those post-assignment conversations will be like. It won’t make much difference if they simply took a 12 month snapshot and created 5, 7, 2 or even 1 “mini-reviews.” That won’t solve anything.

But the REAL question is this: why, when it comes to performance reviews, do so many companies continue to kick it old-school?

Is it to avoid legal issues?

Are we defaulting to old methods in order to avoid the hard work that comes with a more detailed and heartfelt discussion of an employee’s performance? Is it because there no downside for managers who do poor reviews and therefore they have nothing to lose? Is it because we keep trying to find a “perfect” process that creates Stepford employees, removes risk from the manager, and reduces the time it takes to evaluate employees?

I don’t know.

I do know that each year individual performance reviews, no matter how they are conducted, make less and less sense. I say this because we all know that individual effort is almost a misnomer today. Little work can be accomplished by an individual, working in a vacuum without relying on another employee, process, or vendor. We ALL work in teams. At best, our excellence, or our stupidity, contributes to a small fraction of a project’s overall success or failure. So in either case, the individual review makes no real sense.

It’s Really About Effort

The Accenture article references the “costs” associated with the review process. “CEB also found that the average manager spends more than 200 hours a year on activities related to performance reviews—things like sitting in training sessions, filling out forms and delivering evaluations to employees. When you add up those hours, plus the cost of the performance-management technology itself, CEB estimates that a company of about 10,000 employees spends roughly $35 million a year to conduct reviews.”

The logical person would say spending $35 million and not seeing measurable impact would be a waste of money. I think Accenture thought the same thing. But no matter which approach: Bersin’s 4 questions, the “debrief,” or none at all, it still won’t fix the real problem. It still won’t save $35 million. I think we’ll simply shift the cost from the review “process” to costs associated with turnover, low productivity, unaligned activity, etc. Even with the new “structure” that Accenture will implement – done incorrectly they still have the potential to waste $35 million.

I say this because we are trying to change a process to solve a problem that unfortunately, isn’t process related.

It is people related.

See, the real problem with performance reviews is managers don’t put the effort into them to make them valuable and effective. They don’t really dig deep. They don’t care about helping the employee; they care about checking a box, because that is what is required of them. Think about it. Who actually measures the effort a manager puts into a review? Who checks to see how well the review accurately reflects reality (theirs or anyone else’s)? Has a manger ever been reviewed on their reviewing skills, and how exactly would you do that if you wanted to?

As I look at my history of performance reviews, any time I had an issue with one, it was never about the process. It was always about the effort — either the effort I put into the ones I gave, or the effort my manager put into the ones I received.

I think it always comes back to the path of least resistance. Managers can do all their reviews poorly and only have to worry about the small percentage of employees who will complain. Management by exception anyone? Or, they can take them seriously and put a ton of effort into 100% of them. That is a lot of effort with no real reason to do it.

Until we find a way to measure and document how well managers give employee performance reviews, we will continue to have crappy reviews. What gets measured gets done.

So hypothetically, we can waste $35 million with an unwieldy process. We can also waste $35 million by not having a process at all and still having disconnected and disengaged employees. Or we can invest $35 million in quality conversations with employees that actually create a return.

Somehow $35 million dollars is going to be spent.

I say spend it on the people not the process. Teach managers how to have quality conversations with their staffs in a way that benefits the company AND the employee. Then find a way to measure that.

Hold managers accountable for their real job – engaging employees.

That is where I would spend $35 million.

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