In myriad companies and sectors, performance reviews have two main goals:
- To identify who’s performing well and who’s not;
- To help employees grow and develop according to their strengths and weaknesses.
Identifying employee performance is a tricky thing. At Qulture.Rocks, we believe great performance means: “Delivering results, by own merit, and according to the company culture."
"Delivering results" is the easy part. Great salespeople hit their quotas; great engineers produce a lot of high-quality code; great designers produce awesome user experiences on time. “By own merit” is a bit harder: imagine a salesman that gets a call from the CEO of the company. “Hey Charlie, this is Jeb [the CEO]. I’ve just had lunch with the head of distribution at Apple. I sold him our software, so why don’t you call his aide at the number I’m sending you, to get the details sorted?” Charlie’s probably going to meet his quota big time. But was it really his own merit? You should discount a lot of it. Finally, and sticking with our friend Charlie, let’s say he’s an extremely intuitive person, making decisions based on his gut-feeling and “experience,” but works on a data-driven, analytical environment where arguments are made based on hard data. He’ll surely disrupt the work of his colleagues, and set a bad example for the company by getting great compensation and promotion opportunities. Should someone that isn’t aligned with the company culture take on more responsibility?
The whole performance discussion is what we call “allocating scarce resources”. It’s a vital part of a company’s strategy and management, where the right behaviours are reinforced, and the wrong ones, corrected (or even cut at their roots). If your company’s managers are doing their jobs correctly, this process should generate no surprises: people should never be caught off-guard by negative or positive feedback. Great - and poor - performance are continuums, and don’t happen overnight.
We believe that the growth and development part of performance reviews should be gradually ditched in favour of ongoing, continuous feedback between managers and employees. To many a company rely on the whole performance review cycle to trigger behavioural feedback and coaching, but it’s is really the worst time of the year to do so. Compensation and promotion decisions are emotional, stressful situations for everybody, and there’s no really fixing that. But development and growth should be fluid processes, that happen in the day-to-day of the company, when behaviours, positive and negative, are identified in real-time. That’s when feedback can be timelier and more actionable.
A great way to engender a feedback culture, conducive to growth and development, is to enforce 1-on-1 meetings between managers and their employees. We at Qulture.Rocks have worked on that by offering a “check-in” functionality, where managers can log their 1:1 meetings, action items, and observations, and track those over time. HR should be pivotal in the process, training managers on what, when, and where to perform 1:1s, just like GE’s HR team.
If 1:1s are too much of a stretch to your company, and performance reviews still serve as the major feedback event of the year, do this: have feedback and development conversations happen before compensation conversations, and space them away from each other (at least a month apart in time). You’ll ensure that compensation concerns don’t wipe out growth and development from your employees’ minds. Oh, and that’s what Google does.