Having worked for a large global corporation for over 10 years I’ve seen and felt the impact of corporate performance reviews first hand. Every year there is some re-launch or ‘improvement’ in the process, but every year the results are the same; a feeling it really wasn’t worth all the effort. So what’s wrong?
While it’s easy to be critical of performance reviews it’s not so easy to see how they can be improved. You might be thinking we all just need to receive more frequent pay rises and promotions, but that isn’t realistic. More money and promotions are the easy target, but these should not be the primary reward. What companies miss is the opportunity to make their employees feel valued and appreciated, which can still be achieved with monetary and promotional status-quo. Instead companies can leave employees feeling judged, criticised, and under valued. 89% of companies believe employees leave for monetary reasons, but only 12% actually do. Culture and appreciation matters.
So what does a poor performing performance review look like?
- Employees are being heavily compared against each other
- Too much emphasis on ‘development points’
- Little or no appreciation of employee effort and ‘team’ value
- Poor recognition for the ‘introvert workers’ and ‘introvert leaders’
I’ve seen the above used with spectacularly negative results on employees motivation.
Firstly the co-worker comparison, and in extreme cases the ‘forced ranking’ bell curve. What is fundamentally missing here is the ‘team value’. Having worked as part of a team on shared goals all year a company reverts to coworker comparison as the primary measure of performance. The larger the organisation the more complex the less meaning it has to compare output against coworkers.
This antiquated approach encourages individuals to focus more on those personal objectives and targets that will reflect well come the performance review, leaving little or no concern to help uplift colleagues. This is counter productive to achieving corporate goals. What you want is all employees focusing on making the corporate engine work more efficiently towards all goals. It’s not that ‘cascaded corporate goals’ aren’t included, but in my experience these become overshadowed, even irrelevant, when coworker comparison forms a core part of the review.
What companies miss is the opportunity to make their employees feel valued and appreciated, which can still be achieved with monetary and promotional status-quo.
Take any team sport and look at the winning team at the top of their game. Now imagine if each individual were compared and ranked against each other. What would happen to the defender who is downgraded because they didn’t score as many goals as the attacker? How can you realistically compare the value of one team member to another when everyone contributes in their own critical way to ensure the team win. Same is true in corporations, the quiet focused engineer keeping production stable brings as much value as the facilitator with a knack for collaboration. Both are essential to the eventual success of the team.
The ‘bell curve’ is the practice of grouping employees at the same rank and applying a distribution curve based on perceived performance. This means a percentage of people must be ranked as ‘under performing’, regardless of their commitment, effort, team value, personal circumstances and challenges e.g. corporate (changes in line manager/role), or personal (new born infant or health issues).
So what does a good performing performance review look like?
- Employees are compared against themselves, not others
- Minimum ‘corrective’ or ‘career progressing’ development points should be formally captured
- Ratings for effort, team value, and attitude
- Rewarding the quiet introvert workers, not just the extrovert networkers
The business world has changed. Job’s are not for life and corporations need to create a culture and appreciation of employees to retain the best talent. It’s time the traditional performance review and rankings systems took a good long look at its own performance.