Continuous Performance Adjustment Instead of Annual Reviews

8/14/2019 Continuous Performance Adjustment Instead of Annual Reviews

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CONTINUOUS PERFORMANCE

ADJUSTMENT INSTEAD OF

ANNUAL PERFORMANCE REVIEWS

WHAT IS WRONG WITH ANNUAL PERFORMA NCE REVIEWS?

Long performance appraisal cycles that arecommon in most companies do not work well. There are several reasons for that:

• The manager’s assessment of the

employee’s performance usually depends on her latest impression aboutthe person and even her mood that day. There is no way a manager couldobjectively assess the behavior of theemployee during the entire 12-monthcycle. It is a well-known issue and it ismassively exploited by employees whonoticeably improve their performance a week or two before the review time toleave a good impression in their

manager’s memory.• Similarly, making major decisions, like promoting or dismissing an employee, also requires

unbiased evaluation of a long series of multiple small events, because such decisions arerarely made based upon a single major event.

• Some managers tend to postpone giving feedback (both corrective and reaffirming) until theperformance review. This makes the feedback absolutely ineffective, because it breaks thecausality relationship between the behavior and the feedback.

• In many companies the salary increases and/or promotions are tightly associated with annualperformance reviews and employees automatically expect to have their compensation raisedif the review is positive. However, the compensation decisions depend on many business

and economic factors and are often made a few levels of management higher up the foodchain. Therefore, quite often managers already know that they cannot give a raise to a solidperformer even if she deserves it. By submitting an excellent review not be supported by araise, they risk that the motivation of the employee will be seriously damaged, so many managers tone down the positive and come up with some negative points to support the “noraise” decision.




Because of these problems annual performance reviews gained bad reputation, and most peopleconsider them to be a necessary formality, painful for both the manager and the employee.

A BETTER WAY

In order to fix these problems, managers need to switch to much shorter performance appraisalcycles or, ideally, just do it continuously. Long cycles may remain, for instance, for reviewing thedata and making major decisions, but the focus of documenting the performance and discussing it with the employee shall be shifted to short cycles.

A good manager already has a short-cycle framework in place – the one-on-one meeting with eachdirect report. During these weekly, or sometimes bi-weekly, meetings the manager and the employeediscuss the performance-related items. Therefore, the only missing element is collecting theperformance statistics.

The approach described below addresses this problem. It is easy to carry out and it brings valuable

side-effects, like more disciplined approach to one-on-one meetings, task assignment, and feedback.In the examples below, I show how to do it using MyDirects.com online management system, butyou can achieve similar results using Word documents, paper notebooks, or clay tablets.

STEP 1

Establish a system to collect notes about each of your reports. If you decided to use MyDirects, justgo to www.MyDirects.com and sign up for an account.

STEP 2

Make sure that you have regular one-on-one meetings with your reports. If you don’t – focus youreffort on this first before even thinking about improving your performance review appraisals.Setting up effective one-on-one meetings will bring you enormous value.

STEP 3

Start collecting performance data points. Such data points will be coming from many directions:

• You assigned a specific task to your direct and she completed it

• You observe some behavior of your direct• You receive feedback from other people.

Your immediate reaction in most of such situations would be to give feedback to your direct report.Immediately after that you should take a short note and categorize it as good, or bad, or whateverother categories you prefer. The challenge is to do this regularly and here is where a good note-taking system really helps.

http://www.mydirects.com/







Here is how it is done in MyDirects. When you assign a task to your report, you record it in thesystem. When the task is completed, you just flag it either as “good”, “bad”, or “slow”. In theexample below, the person created a good report (green “thumbs-up”), but it took him too long (yellow “too slow”).

You can use exactly the same mechanism to record any notes about the employee, not necessarily tasks:

Let me repeat - make sure that every time you record a performance data point, you give theemployee positive (reaffirming) or negative (corrective) feedback. Don’t wait for annual reviews anddon’t even wait for your weekly one-on-ones. The sooner you give the feedback after the event, themore effective it will be.

STEP 4

Make sure you review your notes before each one-on-one meeting, and discuss the recentperformance data points and review the status of assigned tasks during the meeting. After themeeting, make sure that you document the results:

• if some tasks have been completed, document the performance and give feedback • if new tasks have been assigned, enter them into the system

• if the performance data shows a clear trend in your direct’s behavior, discuss it with theemployee and act on it.

MyDirects provides several convenient reports for this purpose:

• One-on-one meeting form with all current notes and other relevant information. This allowsprinting the notes out before the meeting to avoid staring at the computer screen during theface-to-face meeting.




• List of notes for arbitrary period of times. Can be filtered in several ways.• Performance report for the last six months.

This last one deserves a picture:

It gives an interesting view at the performance history – it shows the overall performance statistics,how the performance evolved in time, and provides relevant examples.

STEP 5

The approach described above is a more effective mechanism for adjusting the performance of youremployees compared to annual reviews.

You still could have a longer cycle, such as your existing annual or semi-annual reviews, to review the long-term trends, but it becomes much less important.

This text is distributed under Creative Commons (Attribution) license. In other words, you may distribute it and produce derivative works, as long as you properly credit the author and preserve copyright notice. See full details at htt : creativecommons.or about licenses

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Continuous Performance Adjustment Instead of Annual Reviews