By Hemanth Puttaswamy, Vice President, Product Strategy, Saba
Performance reviews are dead…at least in the traditional sense. Many managers see reviews as an empty process, pushed on them by HR and offering little value. Thinking about the purpose of a performance review in organizations today, they’re usually conducted to support a salary adjustment. Reviewers and reviewees will get together on an annual (or quarterly, or half-yearly) basis and go through a torturous and forced process to support a 2 percent salary increase. This process allows organizations to justify salary changes and conclude that the compensation process is “fair.” But does this process improve performance in an organization? Shouldn’t the purpose of reviewing employee performance be to develop skills, identify high (and low) performers, and invest in individual growth accordingly? The way most of today’s organizations conduct performance reviews is not improving performance, and there is no evidence to argue the other side.
For a performance “review” process to effectively improve performance, it needs to be more than a forced quarterly or annual get-together that likely will set goals that aren’t even tracked against moving forward. To be effective, performance feedback needs to be a constant part of the work environment, ingrained in the very culture of every organization. The unnatural meeting during which managers sit down with employees and go through what they did during the past year is by nature backward looking and ends up being too little too late. It’s not action oriented, and the interaction is coerced, not volunteered. People rail against coerced behavior; they hate entering time at the end of the week, and they really hate the formal review process. So how can the process be effective if employees dislike it and enter into it begrudgingly?
Don’t be discouraged, it’s not hopeless. There is a better way to review performance and to effectively use the information to create a successful, individualized learning program. The first step is creating a culture in which performance feedback is an ongoing activity—the day-to-day should be one nonstop performance review process. The line of conversation between managers and employees should always be open, and feedback should be forthcoming. The next step is to identify the high and low performers and put in place a plan to develop them within the organization. In addition to identifying them by polling their managers or seeing who has the most sales, put it to a jury of their peers.
The Social Media Effect
For example, on Facebook, we measure the performance of a status update based on how many likes or comments it receives. If it receives 10 comments, it means that 10 people found the update valuable and worth their time to read and provide commentary. If it receives no feedback, it’s likely because readers didn’t find the content valuable. While this isn’t an apples-to-apples comparison, doesn’t it make sense that peers are a good judge of how valuable a contribution their coworker is making to the organization? Did one employee contribute more valuable content to the organization, which solicited engagement from peers? If so, it’s more likely that the contributor is a high performer. Engagement is a key measure of performance; the fact is that people give kudos to peers with a high level of performance and quickly will point out those they feel aren’t pulling their weight. If 100 employees were asked to vote on the top 10 performers in a specific group, they would pick the top 10 every time. An individual performance review can’t tell you this, because not every manager evaluates performance the same way and doesn’t stack up performance based on the overall employee pool.
In an organization, it’s clear who the top performers are—not only to managers, but also to their peers and subordinates. Employees want to be like the top performers, striving to learn what they know, follow in their footsteps, and be their “friends.” In a way, it’s like crowdsourcing performance—and the social aspects can’t be ignored. Top performers influence what others want to learn, how they work, and what inspires them. To cultivate and grow these performers—perhaps for an expanded role in an organization—can’t be accomplished by conducting an annual performance review and sending them to a weeklong training session following it. This backward method won’t effectively inspire others around them, or develop their talents. Neither will compensating them accordingly or giving them a subscription to Harvard Business Review.
“Upleveling” the Game
To make a difference, employers must help develop employees’ careers, take them to the next level, and grow their talents. A huge part of this is game dynamics. People want to “uplevel” to be like someone they respect and admire. Making the top performers transparent throughout the organization allows their peers to follow them the same way they would on social media or in an interactive game. It allows the performers to inspire others through their actions, driving further individual and career growth. This recognition—in addition to the ability to make decisions and have autonomy—are two surefire ways to develop a top-performing employee, and none of these has anything to do with an annual performance review.
To sum it all up, while organizations can’t get rid of performance reviews entirely, they need to realize that performance reviews won’t actually improve performance. They need to understand what they can be doing to better provide the necessary tools and culture for employees to grow in their careers. Do we know all of the ways to measure and impact performance? No. Are we learning, and starting to explore new ideas? Absolutely. It is here where positive change will happen.
Hemanth Puttaswamy is vice president of Product Strategy at Saba, a leading provider of Learning Management (LMS), Talent Management, Performance Management, and Cloud Collaboration Software Solutions. For more information, visit http://www.saba.com.
