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Catherine Schmidt, SHRM-CP, PHR
Annual Performance
Review
Rethinking Reviews
• Why we need to
• Revamping the process
• What might it look like once we change?
• How to make it happen
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Growth Over Time
If you were to give your organization a “grade”
based on its overall effectiveness with
performance management, what grade
would you give?
SHRM/NCMM: Perceptions About Performance Management Effectiveness ©SHRM 2014
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Audience Poll – Stand Up If…
Your organization uses numerical ratings or descriptive ratings (meets/exceeds expectations).
Your organization doesn’t have performance reviews.
Your organization has narrative reviews (no ratings).
Your organization uses 360 reviews or something else (peer to peer, self review etc.)
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Why Do We Review?
Our Intentions
Provide Feedback
Set Pay
Create & Measure
Goals
Legal Documentation
Coach & Mentor
Get Improvements
Develop and
Advance
We Assume:
Reviews are objective & reliable.
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4%
2%
34%
30%
19%
22%
38%
43%
4%
3%
0% 20% 40% 60% 80% 100%
Managers in my organization are willing to “make the tough calls”* as appropriate
Managers in my organization do an effective job of differentiatingbetween poor, average and strong performers
Strongly disagree Disagree Neither disagree nor agree Agree Strongly agree
98% think they fall in top 50%
of all performers
59% disagreed w/ any rating
that wasn’t the highest on the
scale
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We Assume:
Reviews are objective & reliable.
1 kind of review fits all employee coaching/feedback needs.
We Assume:
Reviews are objective & reliable.
1 kind of review fits all employee coaching/feedback needs.
Feedback and performance development are annual/quarterly events.
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2%
72%
16%
3%
0%
2%
0%
0%
1%
3%
Every other year or less frequently
Annually
Semi‐annually (twice a year)
Quarterly
Monthly
As needed (e.g., when individual performance problems…
By request of employee or his/her supervisor
Ad hoc
Other
My organization does not conduct formal employee…
SHRM/NCMM: Perceptions About Performance Management Effectiveness ©SHRM 2014
We Assume:
Reviews are objective & reliable.
1 kind of review fits all employee coaching/feedback needs.
Feedback and performance development are annual/quarterly events.
People need extrinsic rewards to be motivated & committed.
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The answer to the question managers so often ask of
behavioral scientists "How do you motivate people?"
is, "You don't."
Switching Gears …
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Change to Improve
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2012 2014 2016
% of Fortune 1000 Companies Ditching Ratings
Corporate Executive Board (CEB) survey of Fortune 1,000 companies.
Case Study
Got Rid of Ratings in 2012
• Ranked on a scale of 1 – 4 = “soul-crushing exercise”
• Spike of voluntary turnover after review time each year –many were good employees
• Pitted person against person in – what was supposed to be – a team oriented environment
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Case Study
New System
• More frequent, informal meetings at least every other month
• “Check In” process: are employees performing against objectives? What resources do they need to succeed? FUTURE FOCUSED.
• HR is not “police” – surveys annually to learn successes/failures of the process.
Case Study
Results
• Estimated time savings 80,000 hours/year (40 full time positions)
• Voluntary turnover decreased by 25% in first 2 years
• “Notable increase” of involuntary departures
• Increase in managers who were open to employee feedback
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Change to Improve
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Case Study
New Thought: People want to come to work & contribute
• Removed performance reviews for “employee-led development initiatives”.
• Organization-wide training (NOT just supervisors) on merits of various tools, coaching, development options
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Case Study
85% Employee Satisfaction with the Change
• Tools offered:• Collaborative team meeting skills for effective discussions• A 1:1 worksheet for employee/supervisor to identify desired goals• Position competency matrixes• Department work grids w/ goals & priorities identified• Performance improvement plans (PIP) for corrective action
The Difference: None were required or kept in personnel files (except PIP)
Ongoing Feedback = More Improvement
Informal Conversation or Use of System
• BetterWorks• BambooHR• Voyager• Reflektive• Impraise• Workday• 15Five (Employee Feedback)
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Case Study
From Firing Bottom 10% to PD @ GE
• Instant performance feedback 24 hrs./day
• App available for phones or other devices
• Concrete list of short-term “priorities”
• Managers are expected to hold frequent “touchpoint” discussions
Case Study
How it Works:
• Employees can give &/or request “insights” at any time from anyone
• Feedback is focused on improvement – categorized into either: Continue to do something (good)Consider changing something (opportunity for improvement)
• Annual meetings are for coaching towards individual career goals
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The Weekly Meeting
A 10-Minute Conversation:
• What was accomplished this week towards short/long term goals?
• How did the week go for you? Any challenges I can help with?
• Are there any projects/professional development opportunities you want to be a part of?
• I noticed that you contributed by doing XYZ – THANK YOU!
Annual Meetings
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The Annual Meeting
A “Re-Recruiting” or Stay Interview:
• What are the tools needed to complete?
• Identify “regrettable turnover”
• Develop personalized retention plans
• Stay in touch – follow up
To Re-Recruit, Ask:
• Are you doing the best/most challenging/most fulfilling work of your life? If not – how can we help you get there?
• Do you feel that your work makes a difference?
• Do you feel valuable and recognized?
• What do you like best about your work? What would you like more of?
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To Re-Recruit, Ask:• Are you getting enough professional development opportunities?
• Is there anything the organization can do differently to support you?
• Are there any projects at work you want to contribute to or innovate?
• Are you happy with your benefits – specifically any work flex arrangements?
• What could you do to be more engaged?
How to get there:
• Feedback / Feedforward
• Compensation
• The Platinum Rule
• What tools will be used
• How to re-recruit
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Putting it all Together:• Traditional, annual performance appraisals are flawed:
o Assume they can fit multiple functionso Are biasedo Are ”1 size fits all”o Treat feedback as events
• To improve:o Remove ratingso Allow more than 1 wayo Trust managers & employeeso Switch to ongoing feedback
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Thank You!