Thought Leadership Blog

The HRS Thought Leadership Blog delivers validated findings, visionary perspectives and op/ed commentaries related to HR, Leadership, Organizational Development and Employment Law. To enjoy the full volume of available articles, please enter topic keywords in the search box to explore our body of work. Articles are regularly presented by the HRS team and guest experts.


The Annual Performance Review: Post Mortem?

Each day, more employers abolish their annual review system. Why? Because feedback delayed an entire year is arguably worthless, accomplishes negative value, creates fear of feedback and decimates corporate resources. For the annual review to succeed, feedback must be ongoing throughout the year, and the annual review cannot produce surprises. Any employer who over-attends annual feedback and under-attends daily feedback is in critical need of realignment. As showcase employers such as Adobe, GE, Microsoft, Accenture and Deloitte have recently rejected the annual review in favor or regular conversation, they understand that performance appraisal done right is the catapult to success! 

Jack Welch’s 1980’s described “rank and yank” methodology at GE has merit, if and only if, the 10% being guillotined after one year of poor performance are 1) provided the tools to succeed along the way, and 2) damage controlled short of a full year’s underperformance. Frequent feedback by education-empowered leaders is most certainly inherent to the success blueprint. Leaders must effectively lead daily, not just annually.
 
Does Your Company’s Annual Review Deserve a Kick to the Curb?
Are leaders often late in preparing and/or delivering the annual review?
Are employees shocked by ratings and feedback?
Has your company encountered legal argument or unemployment defense because of instrument content or omission?
Is the benchmark employee flat-lining between or after reviews?
Is compensation becoming more tied to timing than merit, serving more as a COLA than a performance accolade?

Annualized reviews have become default policy due to conformity with once widespread practice and a desire to delay cumbersome, often cookie cutter, legalese documentation. HR information systems, while offering efficiency to the tech savvy, are often exacerbating the practice through irrelevant templates, impossible to align. There’s a much, much better way. Consistent with young employees’ reliance upon push-button and command control feedback through technology, a revamp of the system absolutely improves engagement and productivity for today’s and tomorrow’s workforce. Let’s keep up with the changes!


What Should the Annual Review Look Like?
A “no surprise” recap of the year’s challenges, improvements, progress against prior goals and goals/resources for the future,
A meaningful, customized instrument to facilitate progress rather than to impede progress,
Benchmark plan of forward-moving feedback, rich with self-evaluation tools made quick, accurate and easy through metrics, 
Deployment of criteria which in no way provokes and in fact reduces legal argument,
Consistent, applicable, weighted metrics which align job description, goals and compensation, 
Where collective bargaining is applicable, alignment with said agreements.

Not an exhaustive list, these are the critical starting points. Opportunities exist to deploy several evaluation formats within a single employer, as long as lawful and fair consistency exists at a department and/or job function level. 
 

Is a Great Performance Appraisal System Enough?
Yes, as long as we clarify that a great appraisal “system” cannot exist without the following:
Getting the right people in the right company seats,
Selecting, developing and continuing lifelong learning for the right leaders,
Properly deploying magnets and motivators,
Adapting to unique employee learning styles,
Understanding and appropriately addressing the unique talent intensity and interrelatedness of each company role,
Dedicating laser focus to legal, fiscal and brand risk management. 


Legislation in Employment Law Necessitates Valuable Rewrite of the Review
The earlier weight on personal attributes now produces a 6+ figure risk for employers who miss the cues for rewrite. Given the many attributes stemming from culture, religion, genetic and medical protection, we can no longer consider personality, attitude, mood, and/or any characteristic which may attach to a protected class. While many employers are still missing the point, the more savvy, such as HRS clients, are finding not only risk management but also improved productivity outcome by swapping workplace behavior ratings for personal characteristic ratings. Actionable ratings without insult and risk better pave the way to success. 

When crafting the review, consider ratings which align with job description and meaningful criteria to the unique job. You’re one of the rare few if a universal template actually fits the purpose. Most templates can be the culprit to your leaders dreading and delaying the evaluation process. If a leader is already evaluating the criteria on a daily basis, dropping the rating into the appraisal is simple. If a leader doesn’t find the criteria naturally relevant or described in applicable terms, the blank stare and frustration will replace and likely reverse progress. 

Deploy “Appreciative Inquiry” by driving what’s going well to such an extent that it overpowers that which is going wrong. A recent HRS survey of 3000+ validates positive feedback 4 times as powerful as negative feedback. That being said, over-attending the positive without documenting need for corrective action can provoke a legal challenge for a well-intending employer. Failure to prove an employee was cognizant of substandard behavior and chose not to succeed will posture wrongful discharge claim, even beyond the obvious blemish to fairness. Balance is critical.


The Resolution
Originating in military protocol, the annual review emerged into mainstream workplaces circa 1950’s as a metric to rank, recognize and review compensation. Due to changes in leadership case study and employment law, the annual review is now under review itself. Employers continue to prototype 360 reviews and peer-to-peer bonuses. Both have their niche, but both can backfire dramatically if wielded haphazardly without precise control.  

It remains absolutely the strongest ROI to invest up front into a custom, ongoing performance management system. Relevant tailored tools and lifelong leader development safeguard time, energy and risk at every evaluation rollout. Managers should not dread or find cumbersome the evaluation process. Evaluation should be at the very core of leadership. Of more than 60 performance appraisal formats available through HRS, we still find ourselves further customizing the instruments for improved client outcomes. Without exception, the appropriate fit minimizes waste and improves outcomes for all.  It is far too often the inappropriate use of templates which has threatened the reputation and results of the review system. 

Furthermore, because leaders are entirely disposable if they don’t create better performance in those who depend upon them, it is the performance evaluation system upon which company success relies. We at HRS advocate, design and facilitate leadership development and performance management systems that position an employer for success. We deliver and we see the results!


This thought leadership article was initially produced for IBAW and subsequently licensed by request to BizStarts



Jessica Ollenburg - Saturday, November 21, 2015