Eliminate Performance Reviews

And improve productivity

Photo by Krzysztof Kowalik on unsplash.com

Let’s start by reviewing the objective of performance reviews:

• Maximize people’s professional growth.
• Reward strong performers and identify under-performers.
• Promote a culture of feedback and recognition.

Based on what I’ve seen in the last 20 years, most companies use some variant of the following process to achieve these goals:

1. Pick a low cadence. 12 months seems to be the norm.
2. Write documents to review yourself, your manager, your peers, your direct reports based on everything that happened in the previous 12 months.
3. Assign numbers to people on a scale from, say, 1–5. The ratings determine future earnings and whether you need to be on a performance improvement plan. In other words, these numbers matter.
4. Finalize the ratings by holding layers of caucus-type calibration sessions where groups of people with limited information approve said ratings. Typically a curve is applied to the rating distributions.
5. Hold one-hour conversations with individuals to share the reviews, ratings, and bonuses (if applicable).

In short, this type of process crams all feedback for the last 12 months into a multistep process that makes the presidential primaries look simple.

There’s no way we would design a review process like this if we could start over with a blank slate. Let’s just review some of the problems here:

• Promotes procrastination — Why give feedback today when I can wait until the review cycle next year? I would argue that standard reviews actually promote a culture of infrequent feedback and lack of recognition.
• Recency bias — The review will be skewed towards the last 3 months. No one remembers what you did 7 months ago. This creates a performance twilight zone.
• Poor quality due to fatigue — By cramming so much review-work and feedback into one cycle, everyone will get fatigued. Also, it’s forced and unnatural to do this many reviews at once. Towards the end of the process, you just want it to be over.
• Team bias — the loudest and most articulate managers are most likely to get their way in the calibration sessions.
• It’s time consuming — It’s not uncommon for people to burn 3–5 days going through the process each review cycle.

There are several counter-arguments that are often used to defend the standard review process. One argument is that it’s necessary if you want to be a performance-driven company that weeds out the slackers and rewards the rockstars. Also, without it, how can we grow as professionals? What about paper trails? And, last but not least, some will argue that most folks have a hard time giving feedback without a formal forcing function.

Let’s walk through these arguments, one-by-one.

If your teammates don’t know how to give feedback outside of Workday, then you have a more fundamental problem. Solve that directly instead.

If you have slackers or rockstars or both, take the appropriate action to reward and correct in real-time — not during infrequent review sessions when it might be too late.

Also, let’s be real: Professional growth does not come from performance reviews. You learn from experiences and life. You learn when your manager pulls you aside after a meeting and tells you how to engage and build trust through active listening. You learn when you have to deliver something under seemingly impossible deadlines. You learn when you have to make a hard call or have a tough conversation. You learn when facing business headwinds. And you learn when you make a mistake that has consequences. Those are the moments that define you professionally.

And doing reviews just to create paper trails? Really? We can do better.

Yet, companies stick with the traditional review process because this is how it has evolved over decades. But there has to be a better way. People, let’s get rid of performance reviews once and for all.

If you’ve read this far, you might wonder: What should we do instead if we kill performance reviews? Not care about performance and watch the company erode? Of course not.

I’m not an HR person and so I’m going to soft-pedal here. There are some thriving companies that have shunned traditional performance reviews — so I’d look at them for ideas and guidance. Having said that, here are some meaningful replacement techniques I’ve observed:

• It sounds like a cliche, but I’ll say it anyway: Instill a culture of continuous and direct feedback. Set aside time during 1:1s to do this. Part of your job as a manager is to be a coach and coaches don’t wait to give feedback till the season is over. That’s how you miss the playoffs.
• If you don’t think this will work, then schedule sessions to give feedback. No need to write essays or hold caucuses to set ratings. Just go for a walk and talk it out. People are capable of this.
• If your company pays bonuses, managers can decide who gets what — within reasonable ranges. Sure, they need to defend their choices, but that does not require multiple caucuses.
• If someone is underperforming, maybe talk to them about searching for another job or switching roles. There are many reasons why competent people may not be performing. So nip it in the bud and bypass the humiliating (and much delayed) process of getting an “F” during the performance reviews.

If this does not work then it’s because humans can’t be trusted to do the right thing even when given the right parameters. But I refuse to believe that. So let’s get rid of traditional performance reviews once and for all. Let’s start over and solve for performance instead of process and paper trails.