Performance Reviews: Living Up to Their Potential?

Office doors are slamming and cubicle walls are shaking from Silicon Valley to Fairfield, Connecticut.

Don’t look now, but a long-sacred tradition — the annual performance review — just got called into HR for a talk, and it’s not looking good. According to the press in the last few weeks, the performance review as we know it is on its way out of corporate America.

Some 10% of Fortune 500 companies are doing away with their annual evaluations, and now even GE — long the stalwart supporter of buttoned-down performance reviews — is looking to change.

You don’t have to be a Dilbert fan (or have your own version of his Pointy-Haired Boss) to have an inkling of why the trend is on the wane. But you may be curious as to why recently some high-performing companies are calling it quits. This week’s roundup offers a closer look at the issue.

This week’s Redbooth roundup begins with a look at GE, which made headlines last week with news of replacing its annual reviews process. Then you’ll get a look at the pitfalls of traditional performance reviews.

After that, dig into the kinds of systems that might replace it (think informal, frequent feedback). Finally, find out how to make the most of your own company’s review process — no matter what it looks like.
 

Dear Performance Reviews: We Need to Talk

“Why GE Had to Kill Its Annual Performance Reviews After More Than Three Decades” is a deep look by Quartz journalist Max Nisen into why GE — known for its rather brutal review process — is changing its ways. Nisen ties the switch to a fundamental restructuring of the entire business in an attempt to modernize both its industry and its workforce management.

“There’s a growing realization that the annual review just isn’t a particularly good way to manage people or to boost performance.” This honest (and rather sweeping) indictment came from GE’s head of HR Susan Peters on the once well-defended practice of forced-ranking employees — and then firing the lowest performers.

It’s a great case study of how company culture informs management practices, and how a changing workforce of younger faces can impact both.

“The Push Against Performance Reviews” by New Yorker business correspondent Vauhini Vara furthers the discussion of which companies are ditching the annualized review process along with their reasons for abandoning the traditional system.

Vara pulls together opinions of academics who study management trends, gathers comments from corporate executives looking for a better system for their workforce, and — most interesting of all — details the results of data-mining research.

(One gem: studies suggest that nearly half of any given performance rating can be sourced to the quirks and biases of the reviewer. Ouch.)

“Why Big Business Is Falling Out of Love With the Annual Performance Review,” by columnists Lillian Cunningham and Jena McGregor, is the Washington Post’s take on the recent trend.

Cunningham and McGregor present five reasons that the annual review process is dying. They examine how notable companies such as GE and Accenture are using technology to accelerate the feedback loop, to keep costs down, and to correct for those reviewer biases.

They’re shooting for the golden ring of performance review systems: frequent, fair and financially sound.
 

Saving Up the Bad News

A single use case offers poignant insight into how the annual performance review can be botched by even well-meaning (if timid) managers.

In “Feedback Culture“ on Medium, manager Will Read puts a human face on all the parties involved in a performance review (in this case, one with some justified negative feedback) and demonstrates how a formal, infrequent review process could produce the opposite behavior that it intends to.

For this employee, new management salvaged the experience by prioritizing more frequent feedback and by adjusting how employee compensation fit into the review process.

The takeaways from this case study provide good food for thought for people on all sides of the review process: managers, employees, and those that set the HR policy on performance evaluations.
 

A Suitable Replacement? The Gentle Art of Tough Love

It sounds more intimidating than a standard-issue review, but CEO and author Mona Patel designed her “Tough Love” performance review template to make giving feedback more palatable for both sides — without watering it down.

“Tough Love Performance Reviews in 10 Minutes“ gives minute-by-minute details of how the review discussion can proceed. It also explains how reviewers can give employees a choice on how the conversation unfolds.

Frustrated because conventional reviews were both draining and ineffective, Patel designed this framework to be easy to prepare for and to deliver face-to-face. If you’re a manager, these are can’t-miss tips ready to be incorporated into your next review conversation.
 

Reports of Its Death Are Greatly Exaggerated: Ace It Anyway

For some of us, all of this talk of may be premature: formal performance reviews are still a part of our company’s culture and not likely to change before our review period rolls around.

If this sounds like you and your company, Forbes correspondent Susan Adams has pieced together how to best navigate the standard review process.

“How to Ace Your Performance Review“ contains best practices from HR expert Paul Falcone on how to prepare ahead of time and to navigate the actual discussion. (One hint: whether it’s company policy or not, DIY your own self-review and give it to your boss before she puts pen to paper.)

With these tips, you’ll not only survive the review, but make it a career-enhancing and fruitful dialogue.