The “death” of performance management reviews – really?

By David Mudd
David is a member of Clarity Recruitment’s Advisory Board and a guest blogger.

He has 15 years of corporate human resources and consulting experience, specializing in HR operations and talent management solutions.

With an MBA in Organizational Behaviour, David helps ensure our company drives real value for clients, candidates and partners. Read more from David on his blog HR By The Horns.

Check out any HR blog and it’s all the rage: Throw away the traditional performance review and move to a more agile approach. Frequently deemed an unsavoury character, suddenly the performance review process is akin to Darth Vader. Who knew we had an arch enemy in our midst? Fire and brimstone, hooray! But is it warranted?

On a personal level, all this rancour seems entirely misplaced. When else am I encouraged to thump my chest while expounding on my contributions to the business? That’s a party – not the worst meeting of the year – and I look forward to it! (A little tongue in cheek, perhaps, but only a little. Also, for the moment let’s set aside the scenario where one’s manager does a horrible job at this stuff – the primary cause of the entire debate, I suspect.)

Professionally, as a performance management design consultant, I’m skeptical. To me we’re very much mid-conversation on this topic, which makes it exciting. What follows is not a strong case in favour of the “traditional” review process. Instead, I attempt to re-focus the discussion in a constructive way by summarizing some of the detractors’ key arguments, and highlighting various challenges to these claims.

Josh Bersin is a big driver behind the “do-away-with-performance-appraisals movement” (see Time to Scrap Performance Appraisals). I admire Mr. Bersin’s work and read a lot of it, but I’m not on the same page here. Some of the historical problems with performance management noted in this article include:

  • Employees want more feedback than once per year;
  • One person can’t adequately evaluate an employee’s annual performance;
  • Poor performance should be addressed immediately, not just year-end;
  • Forced ranking can be destructive; and
  • Development planning is often treated as a throw-away in the overall process.

Well, I’m first to say I support all of these arguments: employees deserve immediate and ongoing feedback – both positive and constructive – that comes from multiple sources; forced distribution makes sense in an exclusive set of circumstances only; and no one has anything bad to say about robust development planning. Further, I bet many readers will agree with these notions too – they’re basic principles of effective performance management design.

So, at the risk of over-simplifying, might we have a multitude of poorly designed programs out there? And, if so, should we not focus on “fixing” rather than “eliminating” them?Throwing everything to the curb just seems so black and white.

A follow-up question is, “Why do well-designed programs fail, too?”  Of course good design is only half the equation – manager capability is the other. And let’s be frank: managers stink at performance management. Stink! (For facts without the passion, see Mercer’s 2013 Performance Management Survey Results.)

I don’t blame managers, by the way – instead, I’m saddened by chronic under-investment in manager training. Moreover, organizations continue to shy away from holding managers accountable for doing this well. So no wonder there’s a widespread problem – and interesting that it has less to do with the process itself, and more with how it is implemented.

Now, is there an alternative? In all honesty I’m intrigued and would love to see a clear, new approach. Unfortunately, the articles and case studies I’ve read so far are fuzzy on detail. One apparent theme is ditching formal, year-end discussions in favour of more frequent (e.g., bi-weekly) and informal (but presumably mandatory) supervisor/employee conversations. This is one of the key design changes that will bring “agility” to the mix, or so the argument goes. Again, I’m all for more feedback – but if managers stink at doing this even once or twice per year (or simply refuse to bother at all), isn’t this just compounding the problem? Let’s walk before we run.

The other emerging theme is to get rid of the year-end performance rating. There are two arguments: unhealthy focus on the rating takes away from what’s actually important (the supervisor/employee conversation), or managers can’t agree on what a “3” looks like versus a “4” so what’s the point? Before jumping aboard, let’s recall why we rate to begin with: because it provides the structure needed to evaluate talent on a broad scale for all sorts of reasons (to assess progress and distribute pay at an individual level, to help assess bench strength and allocate certain people investments at an organizational level, etc.). If all or even some of these have merit, then structure is vital – and no matter how you spin it, at the end of the day “structure” ends up looking like some sort of rating. Sorry!

And is that such a terrible thing? Why can’t leaders come to agree, over time, on “3” versus “4”, and why can’t leaders adequately reinforce the relative importance of feedback in the process? Certainly I’ve seen organizations do this effectively (not perfectly) – and benefit from doing so – after some concerted effort and robust guidance over several performance cycles. So, do these stumbling blocks speak more to the shortcomings of what is truly a broken HR practice, or do they reflect a lack of managerial alignment, capability and will?

For more on this topic, Edward Lawler’s article argues “the death of performance appraisals is not occurring and is unlikely to occur…[however] the key is to make them part of a complete performance management system.” Or, check out Sam Cuthbert’s clearly titled Get Rid of the Performance Review! I just ordered the latter online – perhaps I’ll be eating my words shortly.

Let us know what you think! At Clarity Recruitment, we’re always interested in hearing from accounting and finance professionals like yourselves, who are ready for new, exciting opportunities that can take their careers to the next level. And be sure to follow us on Twitter (@clarityrecruits) and connect with us on LinkedIn and Facebook for more great tips and advice.