Beat the lose-lose in performance reviews

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Performance runner

The “everyone wins” approach to performance reviews is a lose-lose for everyone.

As an HR consultant, I’ve analyzed countless data sets. I’ve spoken with over 1000 HR execs. If they’ve told me one thing with a unified voice, it’s this. “We ain’t perfect!”

One company expressed dire concern over soaring turnover rates. Showing a steady annual increase, it was approaching 20%. And yet, when I analyzed performance ratings among the company’s employees, I found that over 90% of employees “met” or “exceeded expectations”. How can this be?

This is evidence of the “everyone wins” approach to performance management. Not only is it totally illogical, but it’s also exceedingly common. Maybe we set our expectations low enough that everyone succeeds. Maybe, we don’t ask the right questions of ourselves, employees and managers. Given the evidence, it’s clear that on the whole, we lack the basic ability to manage performance toward our objectives. This is the world of broken performance management.

Ask any coach. Managing performance is necessary. And folks simply don’t know how to do it. Sometimes it requires big questions and tough answers – not a typical strong suit for many managers. There’s not enough hours in the day. So, managers and employees tackle the tough stuff last. This is why performance reviews are predominately held at the end of the year and even then, they’re conducted with as little effort as possible. No wonder the results aren’t meaningful.

And to solve the social conundrum, regardless of the truth, or the coaching a person may want or need, managers assign the ratings likely to cause the least possible friction. Nearly everyone meets or exceeds expectations. Everyone wins is easy.

Unintended consequences.

Unfortunately, this approach undercuts the viability of the performance management process. And a lot worse. It actually erodes performance while hiding the damage among ever higher ratings. It interrupts engagement by crushing employee recognition. It sends a clear message to your top performers that their value is equal to that of lower performers. How do you think they will respond? Where’s their incentive? Everyone wins means everyone loses.

So what should you do? Drop performance management altogether? Why have managers at all?

We have to realize that managers and employees will never get good at anything they practice once a year. The annual review – on its own – might not be very helpful, but if placed within an effective context of communication, it’s worth its weight in gold. We have to learn that critical doesn’t mean negative. People need practice delivering and handling criticism so that the organization can continue to grow and perform at the highest levels it can.

Most HR professionals do a better job than they’ll comfortably admit. But whether it’s hiring, training, learning, development or engagement, there’s usually an area of culture or two that causes consternation for HR professionals. Commit to regular structured conversations. Let the truth set you free. Is giving up really an option?

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