THE BIG IDEA: Performance reviews may actually be hindering employee performance and interoffice communication. Timely one-on-one dialogues with your employees can be infinitely more effective and economical.
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What if we told you doing performance reviews is completely ineffective and an unnecessary company expense?
How many collective work hours and resources do performance reviews consume in your organization?
Adobe got rid of annual reviews in 2011. They estimated a savings of 80,000 hours of time from 2,000 managers each year, an equivalent of 40 full-time employees.
Why Do Companies Do Performance Reviews?
The assumption is that annual reviews improve performance and increase accountability. But do we have any hard evidence that they work?
Feedback is essential for improving employee performance. But for feedback to be effective it needs to be timely and frequent.
Reviews are generally done annually or semi-annually. This certainly isn’t timely; nor is it frequent enough to make an impact on performance.
Performance reviews are supposed to highlight areas of improvement for employees while providing an objective evaluation of performance to determine salary and advancement.
What happens in reality, however, is often a different story.
What Are Performance Reviews Doing to Your People?
Performance reviews create walls between the boss and the employee. These schisms breakdown communication instead of strengthening them.
Reviews are highly subjective and often political. We all have emotional biases, personal preferences, and personal agendas. It is impossible to give objective feedback. Plus, the link between performance and pay is tenuous.
Being “reviewed” can be intimidating. It puts people in a defensive posture. When we get defensive, self-preservation instincts takes over. And when this occurs, learning stops.
How Do You Improve Employee Performance?
Performance reviews hinder learning and team building because managers lack the motivation and reason to provide ongoing feedback.
Instead of constructing walls with performance reviews, build bridges by cultivating a culture with coaching at its core.
Train your managers and executive leaders to become effective coaches that offer constant, open feedback.
The goal here is to bring managers and employees closer together. The more open exchange you foster within your organization, the more collaboration you’ll see.
How Do You Mitigate Interoffice Conflicts?
Conflict resolution is a major concern for most executive leaders.
When the lines of communication are open, conflicts are less likely to escalate. More frequent candid exchanges forge new bonds that allow for more difficult conversations.
When managers and employees can have difficult one-on-one conversations, trust is present. Trust is the foundation for effective team building.
Are You Ready to Elevate Your Organization?
All of this translates to greater employee performance, higher productivity, stronger teams, and enhanced innovation.
This shift from structured performance reviews to a culture of coaching can be challenging, but it can also be one of the most profitable initiatives you embrace in the coming year.
P.S. We invite you to join us for The All-Star CEO Seminar at Disney in Orlando on October 16th—an intimate gathering to get to know your best customers.