Performance Reviews: Transforming Bureaucracy into Value

Everybody agrees that performance reviews can, in theory, add tremendous value to a company and its employees. Everybody also agrees that in reality performance reviews are painful and often destructive. About the only point that is contested is who is at fault. Employees blame management. Management blames the employees. Everyone blames HR. Even HR.

As far as I can tell the main culprit is human memory. People automatically take minutes of meetings to document what is discussed and decided. Yet, when it comes to performance reviews that culminate in a year end meeting to discuss an employee’s performance throughout the year I have never once seen anyone show up with year long notes detailing the performance being reviewed.

Human memory is frail. Add in the politics of employees and even their managers jockeying for position and it becomes impossible to sort out fact from fiction at year end. It really is important to document performance real time and to ensure that there is a public record such as in formal meeting minutes or simply a summary email. Since this affects employees much more than managers it is clear where the responsibility lies here.

The next issue is interpretation of the results. Even when memory of the events is consistent between employee and manager, interpretation of these events can differ wildly. Rather than wait until year end to ensure that there is agreement on performance attribution, employees should ensure that they have a debrief with their managers immediately after major accomplishments.

The final issue in terms of ascertaining performance is ensuring that the performance is measured against the pre-agreed job description and annual targets (read: An Effective Job Description Creates Operational Value). Far too often a manager is more interested in rewarding an employee who has made his life easy and punishing someone who hasn’t, even if they are a high performer.

Remembering and interpreting the facts form the foundation of a performance review. However the term “review” is a misnomer. The point is not simply to identify performance successes and failures, it is to help improve the employee’s performance and consequently the performance of the company.

In terms of performance improvement the standard management mantra seems to be listing the employee’s weaknesses and issuing instructions that the employee should improve his weaknesses. The problem with is that it is well documented that this does not make sense (Google: “improve weakness or strength?“). Admittedly a fatal flaw needs to be corrected. Otherwise if you have a personal competitive edge, then increase the edge! Wasting time improving weaknesses make no sense as you are not hired for your weakness, you are hired for your strengths.

If you follow my advice, at this point you have correctly identified your actual strengths as agreed by yourself and your manager. If you get this far you have improved your career quality tremendously. There are two issues left. The first is improving on your strengths. This involves self-development, exposure, training and mentorship, topics for another article.

The second issue, often missed, is what the employee needs to perform. What resources? Financial, human, political capital, time? What authority and approvals? Who needs to sign off? When? These are important issues that need to be agreed up front. There is no sense in investing in improving an employee only to have him frustrated at every turn by issues that are completely out of his control.

Conceptually it is not difficult to see how the dreaded performance review can be turned around into a commercially enhancing process and I hope that this article has highlighted this. Unfortunately the actual work that needs to be done to execute on these ideas is not trivial and there will be challenges in effecting such change. It is well worth the investment.

I wish you the best of luck.