Fixing The Performance Review Process
There are numerous articles written on the ineffectiveness of the annual performance review process and its net result. The performance review process tends to de-motivate a vast portion of the workforce. There are numerous suggestions on how to improve it, going as far as scrapping the entire process. Removing the process will not help given that, in most high-tech companies, a ranking or scoring process is required to drive: who to promote, keep, or let go, and drive compensation process. Therefore, it is important to fix the performance review process rather than abandoning it, and leaving the career development, promotions and compensation to an ad-hoc process!
Why is the performance review process ineffective?
A majority of the high-tech workplace has a university education. As students, they had to work very hard to get good grades in order to demonstrate knowledge depth, obtain scholarships, and secure good future jobs! In the university educational system, students are under constant performance reviews, so, why does a distaste for the process begin as soon as we start our careers?
Universities do a much better job of defining, right from the beginning, as to what is expected, what needs to get done, how one’s score is calculated and clarity on grading process (A,B,…,F)! They also grade you on each component, so one knows where they stand and why! The process is clear and leaves little room for surprise!
The fundamental problem with a high tech company’s performance review is that the process of how the score is calculated, is vague! There has been a lot of good literature written on how to define objectives and measure results (MBO, SMART and OKR), the missing piece is clarity on the scoring process! It is very easy to find ample discrepancies on scoring in performance reviews by the same managers within a team. When the scoring process is not clear, Individuals become frustrated on key differences between what is deserved vs what is given. The pressures within the high tech work environment including long work hours, time to market pressure and team vs individual performance, would make it difficult to deal with a grade that is possibly unfair!
How to fix it?
My suggestion is for managers to focus on the following two key points:
1 — Ownership:
Preach to the team about taking ownership of their career development, thinking about their skills like a product and constantly updating it to be competitive in the arena they play. Repeat this message on various occasions to obtain buy-in. Then, get them engaged in their performance review process regularly, quarterly. Everyone needs to genuinely see this process as a tool to manage and improve their careers. It is up to all of us, to pay attention to our career development, if we don’t, why should anybody else!
2 — OKRs & Scoring Process:
Define everything as a MBO/SMART/OKR, spend time with the team to clearly define the objectives and how it ties to company objectives. Explain why we need to do this, what needs to be delivered, dependencies and timelines. It is very important that goals for career development and team dynamics are clearly defined. Set expectations on the communication/presentation clarity, meeting interactions and inter-personal skills.
The most important step after that is, the agreement on how we obtain a score (as an example: Excellent, Good, Average, or Poor). This step, in most cases, is missed! This becomes the root cause of the performance review problem that causes frustration and de-motivation! It has to be done at the start of performance review period, not at the end!
By following these steps, I have seen a big change on people’s ability to buy into the process and become engaged in it.
I look forward to hearing your comments.
Mr. Hojjat Salemi is a Silicon Valley Executive. He has been working in the high‐tech field for more than 30 years. His background is in Systems and Semiconductor IC Development. He has worked in numerous high tech companies such as Cisco Systems, Cortina Systems, Nortel Networks, Mitel, Cortina, FPMX, Skystone Systems and NewBridge. He received his Bachelor and Master’s of Engineering at Ottawa University. In 2010, he was honored with the 2010 Faculty of Engineering Alumni Award of Excellence from Ottawa University. He also holds a number of patents on a variety of topics relating to Systems and Integrated Circuit design.