Should You Conduct Performance Reviews?

by | Aug 13, 2020 | Blog

‘Sorry Kevin, you’ve not met your KPIs this quarter.’

‘But…I conceived of and worked on the project that secured the contact with our leading client.’

‘Yes, but you didn’t meet your personal targets. We all know you work really hard and you are very valuable to the company, but we won’t be giving you a pay rise this year. You didn’t reach your KPIs.’

‘I secured 6 whales last quarter, each worth more than 1 million per year.’

‘Yes. But your target is 10 new clients per quarter.’

‘Regardless of the amount each client commits to?’

‘Well, yes. The target is 10.’

‘Even if those 10 only equal 1 million as a collective, the focus is on 10 new clients, not the return on the accounts that I have secured?’

‘That’s right Kevin. So, now that you get it, you’ll understand that I have to report that you are underperforming.’

Performance reviews are a relic of industrial manufacturing. A time when your performance could be measured by the number of completed tasks you performed in a set time – such as the number of boxes sorted on a production line in one hour. This is measurable and a manager can clearly see a pattern to your performance and perhaps motivate you to do better, or penalise you for not reaching targets.

As knowledge industries have developed and factory work has been largely automated in many countries, performance reviews have become far less reliant on input and output data.

Setting targets is still seen as a way to motivate productivity. However, targets do not take into account the time that it takes to conceive of a brilliant idea, secure a relationship with a client to make a sale or even evaluate the contribution a person makes to a team environment.

While some people would contend that performance reviews are motivational tools used to positively encourage high levels of performance, when you look more closely, they are a way to control employees, maintain the hierarchy and even exert power over potential threats to management.

So what metrics do managers use, and are performance reviews still relevant?

Do you do performance reviews at your company?

Most managers have moved away from conducting performance reviews. Organizations have found that having an open-door policy actually facilities more regular conversation and feedback mechanisms.

When interviewed, managers of knowledge industry-based organisations said they did not conduct performance reviews because:

  • Annual performance reviews are costly, lack agility and do little to improve performance standards overall.
  • The purpose of a performance review in knowledge-based organisations is unclear and organic feedback is more time relevant and reliable.
  • Grading workers like primary school children demotivates employees and creates tension between coworkers. The ratings used are often subjective, so if a manager and a worker do not really like each other, it is likely to affect the review rating.
  • Performance reviews are insulting. People are hired for their professional skills and should be guided and nurtured by their management team. Withholding feedback until it’s time for a review does nothing to support the growth of the business or the employee.
  • Random coworker performance reviews are a covert act of bullying and do not accurately express to the worker the quality of their work, bit their likability in the workplace, which often has nothing to do with performance or productivity.

So rather than grading and degrading people in the workplace, managers who want to guide their teams and touch base with employees to ensure that they feel supported and motivated do some of the following less costly and more positive things:

  • Have an open-door policy, always welcoming feedback, offering to listen to ideas or comments, and host casual chats with employees on a regular basis. Once a year, a one-on-one meeting would focus on goals, ambitions, growth and workplace relations.
  • Rather than having a formal review, giving employees real-time feedback. This is done one-on-one and is an exercise in listening and responding on the part of the manager.
  • Salary adjustments are completely separate from discussions about employee performance and are handled by HR. While performance does affect decisions about pay increases, it is not up to the manager to make the final decision about pay rates, but the HR manager.
  • Managers should act as coaches. The team works best when managers are viewed as coaches and more experienced peers to help employees with their career development.
  • Separate peer feedback from reviews. Employees do need to be able to talk to managers about their coworkers in a neutral and supportive manner. If one employee is having difficulty with another employee in regards to their work performance, a manager should be neutral in their response and understand all sides of the situation before taking any action or commenting on the situation.
  • It is incumbent on managers to discuss awkward or difficult situations with workers in a sensitive and respectful manner. To this, specific questions should be asked that elicit answerable responses – such as ‘Kevin, your last project failed to produce results. How can I support you in your next project?’

Performance reviews do little to serve your creative talent who are often busy in a world of their own, conceiving of the next big idea to grow your business. Such tactics only serve to dampen enthusiasm, dismiss differences between people and create a culture of fear.

While your management team needs to be able to measure the success of their team, the metric used needs to change. By approaching teams with an attitude of openness and allowing a dialogue to take place as needed, you help to build trust between coworkers, transparency in communications and creativity in work. These things help make workers feel valued and appreciated, meaning they will want to work harder because of their own sense of pride and satisfaction, rather than through fear or need for praise.