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Failure to Perform? – Performance reviews remain standard for most organizations.

Failure to Perform?

Traditional performance reviews remain standard for most organizations. But when you’re called on to perform every day, does the annual review really show who you are?

The performance review process has always been painful, as much for the manager whose tasked with writing it as for the employee receiving the news. Yet it’s a tradition thats barely moved off its basic mark in years. In fact, according to Globoforce, 91% of all organizations continue to rely on the annual review process as core to their employee engagement program. 

Business, however, has changed, and is now moving at a speed that begs a tighter feedback loop than a once-a-year employee review can afford. Innovative companies are taking note and making a change: IBM, Accenture, and Netflix are all disrupting their internal review processes and shaping the new paradigm better suited to their employees and the speed of their business.

In an industry that’s all about finding new ways to solve problems, it may be time for companies to reevaluate their employee feedback loop and find a better reality for everyone involved.

Feedback Nation

We are at a time of feedback − instant, gratifying, never-ending information that streams to us from nearly every avenue of our lives. So it stands to reason that most of us expect that same sort of reinforcement and direction at work. Especially on projects that are moving quickly, managerial input can make a big difference in employee evolution, helping you grow in your thinking, expanding your skills, learning from mistakes, and being the kind of effective team member your role requires you to be.

There are ways employees can build in a feedback loop for themselves. David Gracia, Vice President of Contract Technology at Hollister Staffing, recommends that every employee create a weekly status report to substantiate what you’ve done with your time, and to offer a real view into your value as an asset to the organization. He explains, “It can be quick - as simple as an accounting of your time, things you’ve achieved, any bottlenecks involved in your work process.”

Not only will you grow in your role and enable a transparency of your work during your time there, it protects you, documenting your work until the time of a formal review, ensuring that you can accurately showcase your work.

A weekly status report works equally well for both contract and full time employees, offering managers insight into the challenges you’re facing, the various projects you’re being asked to contribute to, and the large and small accomplishments that highlight your value as an employee.

Changing the Rules for Employees

According to Bernard Tyson, CEO of Kaiser Permanente, in an interview with Fast Company, it’s time we stopped looking at reviews as a task, but simply as an effective way to work. “Every manager should be
giving feedback to everybody. They shouldn’t have to ask. It’s how you let someone know if he’s hitting the mark and what to do to become more effective.”

IBM CEO Gina Rometty’s motto “never protect your past” has anchored a corporate “reinvention” that includes its annual review process. Gone is their 10-year-old system called Personal Business Commitments, in favor of a new approach that enables shifts in employee goals each year, based on frequent feedback initiatives throughout the cycle. In speaking with Fortune earlier this year, Diane Gherson, IBM’s Chief Human Resource officer, noted that the change was driven by the company’s own employees, who “were already doing work differently than the system assumed.”

Coaching for Change

Gerson believed the traditional review system favored process over outcome at a time when employees wanted and needed immediate understanding of how to improve on their work for their own personal development, noting “The world isn’t really on an annual cycle anymore for anything.”

To solve their problem, IBM turned to its own workforce for help, asking its global network of employees to share ideas for a new performance review system. The final result was the creation of a new app-based performance review called Checkpoint.

Now IBM employees set shorter-term goals, and managers can provide feedback on their progress at least quarterly. At year’s end, employees are judged on five key criteria rather than one single measure of performance as it had been in the past.

Creating a New Measure of Success

At Atlassian, VP of Talent Management Joris Luijke recently offered up the company’s own story of review transformation − Atlassian’s “Big Experiment” as he calls it − on Management Exchange.

Atlassian’s performance review system was fairly standard: a 360 degree review based on a 5-point scale system. It was, he says, a lumbering, costly, disagreeable process for everyone involved. “In short, twice a year the model did exactly the opposite to what we wanted to accomplish. Instead of an inspiring discussion about how to enhance people’s performance, the reviews caused disruptions, anxiety and demotivated team members and managers.”

To fix it, Luijke and his team analyzed their current process, asking what made people perform better and what parts of the reviews worked better, talking with other tech companies about their experiences as well. They asked if the negative aspects of reviews, mainly related to demotivation and the high levels of anxiety, tended to disappear after a while (they don’t).

Their findings ‘ripped apart’ their traditional annual reviews, in favor of a light-weight model that offered constructive aspects focused on enhancing employee performance, playing to their strengths and a removal of ratings-focused review mechanisms.

Altassian then went further, eliminating individual bonuses while bumping up salaries. They built in new measurements and discussion points to focus on, and brought down team sizes so that managers could more readily communicate with all their employees. The result was a paradigm shift in corporate culture, more satisfying for employees, more productive for the teams as a whole.

What’s most important for employees to remember, according to Hollister’s Gracia, is that “You have a voice in this. It’s inherent on you to keep the company aware of your work and your efforts, calling out some of the challenges you’re facing in a timely manner. Documenting your efforts in the form of a regular status report protects you, enables you to be stronger in your work, and creates an opportunity to generate the kind of feedback that will help you develop your skills.”

Gracia notes, “At a time when data is everything, its especially important for contract talent to ensure their managers understand their impact as employees. That goes for this job and for their careers moving forward.”

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