Commentary: Performance Reviews Aren’t Dead – We’re Keeping Them on Life Support
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle.
By Shauna Cole
Shauna Cole works with Enterprise Saint John. She’s a certified HR professional (CHRP), holding an MBA and BA. A native Saint Johner, Shauna is passionate about working with our community and advancing HR.
On February 16, you asked “Are Performance Reviews Dead”, from my point of view, the answer is an, unfortunate, no.
The performance review isn’t dead because many organizations insist on keeping the antiquated process on life support, causing us to miss the mark on innovation and alienate millennials. Organizations are committed to keep these practices in place, even though all signals indicate, it’s time to just let them go.
“Performance reviews first emerged at the dawn of the twentieth century. They were useful in an economy that measured factory “outputs” but now, in an increasingly knowledge-based economy, they are not effective at capturing success in innovation, teamwork or customer empathy.” (Are Performance Reviews Dead?)
Performance reviews bring accountability to the individual level and translate those high level organizational goals and objectives into something that is meaningful to employees in their day-to-day roles.
The performance review approach seems like a great way to keep everyone on track and aligned toward the same view of success. As we strive to reach this perfectly linear and objective process, we end up missing out on those intangible pieces that can ultimately make or break us. This leads to a seriously flawed system that we insist on resuscitating again and again.
This practice of measuring performance on number scales and force ranking employees in some sort of fashion, actually encourages those behaviours which contradict innovation and creativity. These skills and approaches are pretty critical to success in today’s economy and highly valued by the millennial workforce.
Enter here the “Innovator’s Dilemma” (Clayton M. Christensen), where success can’t be measured on something that hasn’t been tried, tested and true. Combine this with the fact that any salary increase and bonus payout is tied to how the employee ranks on the point scale. Performance reviews are actually incentivizing employees to achieve the status quo. The organization does not understand how to measure success outside of its already established (but flawed) paradigm.
Another problem of the performance review becomes its lack of power in guiding any organizational decisions. I believe the intangible pieces of the employment experience are what actually make us or break us inside the organization – not the performance review. This leads the powerless performance review even further down the path towards its own demise.
I’d argue, it’s the intangible pieces of others’ perceptions of what we do, or don’t do, that have the greatest influence on our success. Sure, it’s up to us to figure out some way to manage these perceptions, we do have some span of control. How we actually manage those perceptions of others becomes another story, for another time.
Imagine you’re scored on a five point performance scale, with five being the maximum score. You’ve been a solid performer, receiving a score of 4 year over year. Then imagine the organization undergoes a reorganization and eliminates several positions. I’d argue your performance review score won’t save you from the cutting block. Rather, it is the employee with the strongest network of supporters and allies in positions of influence that will determine where you land, or don’t land.
It’s the perception of others that determines your success – right, wrong or indifferent. Sure, your performance score is probably an input to how these perceptions are shaped. But ultimately, it’s the conversation that takes place about and around the score that really matters.
The performance review system in itself typically provides the complete infrastructure for performance management and improvement. Having stringent annual processes associated with performance management, used to contribute to internal perceptions of fairness and equality. With the changing workforce, I’d say that performance management systems are now encouraging the polar opposite perceptions among millennials.
As the workforce starts to change from more traditional models to align with the needs of millennials, the performance review process will need to change. Millennials will simply not accept this oversimplified approach to performance. Millennials will understand that performance is much more dynamic than a number or a ranking in a spreadsheet.
It is my prediction that millennials will force the uncomfortable conversations with managers and leaders to move towards a more inclusive, holistic way to understand the employee’s success, or failure, in an organization. This approach will undoubtedly allow for the employee’s inclusion in the process and enable meaningful conversations in a movement towards innovation. At least, I hope.