Performance Reviews—Make Them More Flexible to Make Them More Meaningful


Business Handshake2016 is half over. I’ve asked before in the middle of the year, are you halfway toward meeting your performance objectives?

That question is still a good one to ask yourself as a form of self-assessment. But it might need tweaking. From a management perspective, the question is probably less relevant than it has been traditionally. There is a trend away from annual performance reviews and annual objectives toward a more flexible system. I think this is a good trend.

Businesses from General Electric to IBM to Goldman Sachs are moving to more project-oriented, shorter term performance objectives. And if GE is changing, you know something is afoot—Jack Welch instituted the epitome of the “rank and yank” performance management system.

The best performance management systems focus on (1) on aligning employee performance with organizational goals and (2) communications between managers and employees. The “annual” nature of performance management worked better in a steady-state business environment than in today’s faster paced, ever-changing situations

I have long been an advocate of managers’ giving performance feedback more frequently than once a year (see here, here, and here). And if managers don’t conduct regular formal or informal performance reviews, employees should ask for more coaching and feedback.

But it’s all to the better if corporate systems promote this regular dialogue about performance.

The new IBM system, called Checkpoint, envisions shorter-term goals and quarterly progress reports. It judges employees on five criteria—business results, impact on client success, innovation, personal responsibility to others, and skills. So there are five scores, rather than a single performance rating.

GE is also moving toward a more flexible system with more frequent feedback.

And Goldman Sachs is dropping its numerical ratings in favor of “qualitative” feedback that is “real-time” during the year, rather than using annual reviews, though it is using verbal ratings of “outstanding,” “good,” and “needs improvement.”

All these systemic changes feel like they are moving employers in the right direction on performance management. But, as with most management tools, it isn’t the tool or the system that is important, but the communication between managers and employees.

As one writer recently pointed out,

“The more seriously an organization takes its performance review process, the less human a workplace it is!”

The focus should be on the human element, not on administering a system.

What is your company doing to keep its performance management system relevant to today’s workforce?

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2 Comments

Filed under Human Resources, Leadership, Management, Workplace

2 responses to “Performance Reviews—Make Them More Flexible to Make Them More Meaningful

  1. Pingback: Performance Management Isn’t About Deadwood | Sara Rickover, Behind the Corporate Veil

  2. Pingback: Performance Management Redux: Flexibility Is Key | Sara Rickover, Behind the Corporate Veil

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