The Performance Review Is Dead - Long Live The New Performance Review

1©2014 Saba Software, Inc.

The Performance Reviews Is Dead –Long Live the Performance Review

Jan Sysmans

7 May 2015



Jan Sysmans

Senior Director Marketing, Saba

[email protected]

@jsysmans @sabasoftware

www.saba.com


• Survey Results

• Companies That Canned the

Performance Review

• Retention

• 5 Problems with Performance Reviews

• 4 Steps to a Better Paradigm

• Recommendations

5©2014 Saba Software, Inc.January 2013

Changing Business Environment

6©2014 Saba Software, Inc.January 2013

Changing Business Environment


People Are Leaving Their Jobs

36%Looking for a new job

45%Millennials looking to leave

Nearly 60% of the workforce

have been in their jobs

for less than 5 years

Source: Harris Poll, December 2014


Why?

47% Career growth

43% Compensation

38% Better sense of meaning

90% Drive their own career path

55%Expect more from their company

Source: Harris Poll, December 2014


Will The Real Leader Please Stand Up?

68%

Consider themselves leaders

12%

Aspire to the executive ranks

Source:

• Harris Poll, December 2014

• The Global Workforce Leadership Survey from Saba and WorkplaceTrends.com


Retention

Career Development

Coaching

Engagement

Leadership


Performance Reviews



We came to a fairly quick decision that we

would abolish the performance review,

which meant we would no longer have a

one-time-of-the-year formal written review.

What's more, we would abolish

performance rankings and levels in order

to move away from people feeling like they

were labeled.-- Donna Morris, SVP People


We found the system failed to generate quality

conversations, leaving employees with a [ranking]

that many viewed as a deficiency statement. In

the end, the ratings given were not a trustworthy

indicator of the actual status of performance or

engagement.

-- Sharon Arad, Director, Assessment & Coaching,

Engagement & Performance Management


Since 2011, Juniper has not given ratings to

employees or kept documents of ratings. It also

eliminated forced rankings. The new method

focuses heavily on regular quality

conversations between managers and

employees, using the structured conversation

model. Overall, Juniper has seen participation

and satisfaction skyrocket among employees

and managers.

-- Steven Rice, EVP Human Resources


The Keeper Test Managers Use:

Which of my people,

if they told me they were leaving,

for a similar job at a peer company,

would I fight hard to keep at Netflix?

The other people should get a generous severance now,

so we can open a slot to try to find a star for that role


https://www.youtube.com/watch?v=XrnfSeMXSO0

//localhost/Users/jansysman/Documents/Canadian Talent Management Summit/How Your Brain Responds to Performance Rankings.mp4

//localhost/Users/jansysman/Documents/Canadian Talent Management Summit/How Your Brain Responds to Performance Rankings.mp4

https://www.youtube.com/watch?v=XrnfSeMXSO0


Broken Performance Review -> Voluntary Attrition

When you're a company of 11,500 people

[and you experience] an increase [in

attrition] of a few percentage points, you're

talking 100 to 200 individuals leaving who

were likely great contributors. That has

implications around your productivity and

your performance as a company.

-- Donna Morris, SVP People, Adobe


The 5 Problems With Performance Reviews Today


• Using a static process of setting goals and reviewing them only once a

year doesn’t work in today’s modern world.

• If your company is stuck in this pattern, several things are likely

happening:

– Your goal-setting method is either ignored or regarded as meaningless.

– Your individual employees are probably reprioritizing their goals on their own.

– Your company may be missing valuable opportunities to adjust to market

changes and revise business goals accordingly.

Annual Goal Setting Doesn’t Account for the Real Pace of Business


• Employees shouldn’t receive performance feedback just once year.

– It handicaps a team’s performance and productivity.

– It can fuel employee disengagement.

– It may even contribute to turning an unhappy employee into a flight risk.

• If your company still provides feedback annually, you may be running

these risks:

– Your poor performers assume they are fine, and do not try to improve.

– Your good performers aren’t sure of their status and may become disengaged.

– Either way, you’re not getting the most out of your workforce.

Performance Feedback Is Too Infrequent


• A better use of managers’ time is to spend it encouraging employee

growth, development and long-term engagement.

• If you’re still using the traditional annual review process:

– You’ve just lost a year of corrective action.

– You’re wasting managers’ time.

– You’ve missed some golden opportunities to inspire and engage your

workforce.

Traditional Reviews Don’t Help Employees Grow and Develop


• Most employees are merely listening for “numbers” and don’t pay

attention to the actual performance review or personal development

portion of the discussion.

• This has several results:

– Employees’ ears are closed to any real performance feedback because the

process produces fear and uncertainty.

– Employees don’t gain tips for personal development.

– Managers waste their time trying to provide constructive guidance.

Stacked Ranking Reduces Engagement & Demotivates Employees


• Your top-performing employees deserve to be treated better than

everyone else, not the same way.

• If your company uses the traditional performance review process, you

may be alienating your best workers. Why?

– Top performers don’t want to be treated as “groups” or “averages.”

– Your performance management practices aren’t reflecting enough

personalization.

– Large segments of your workforce may become disengaged.

Traditional Reviews and Rewards Don’t Treat People as Individuals


A Better Way - Four Steps Toward a BetterPerformance Management Paradigm


Step 1 – Dynamic Goal Setting and Management

• Why

– Things change.

– Annual goals can become irrelevant.

– Irrelevant goals lead to an out of touch work force.

• Benefits for HR

– Keep your people focused on the right things (wrong goals = wrong focus).

– Continuous goal setting leads to better business results.

– HR becomes driver of positive change.

• Technology Enables Success

– The right technology can make setting and managing dynamic goals easy.

– Assign new development goals immediately when needed.

– Avoids for people to be set up to fail.


• Why

– Supplement the annual review with ongoing feedback and coaching.

– Create a process that fosters regular discussions between employees and

managers.

– Frequent feedback avoids end of year surprises & drives better engagement.

• Benefits for HR

– Moving away from the dreaded annual process transforms HR into catalyst of

positive change.

– HR is seen as helping people become successful.

– Eases burden on HR’s workflow.


– Advanced software can facilitate a more dynamic, fluid and frequent feedback

environment.

– A user-friendly platform that brings everyone together.

– Innovative software accelerates adoption.

Step 2 – Transparent and Frequent Performance Discussions


• Why

– Money isn’t everything.

– Organizations that do a good job of recognizing employees perform 14 times

better than those that don’t (Bersin by Deloitte).

– Compensation means different things to different people.

• Benefits for HR

– When people quit, it creates a lot of disruption everywhere. So improving

retention has huge business benefits.

– HR teams stand to gain from higher employee satisfaction, less attrition and

more predictable budget planning for compensation.


– Personalized social recognition.

– Better growth/development plans.

– More intelligent and personalized compensation.

Step 3 – Engaging Reward and Recognition plus More Intelligent Compensation


• Why

– 66% of employees do not see strong opportunities for professional growth in

their current role. (TINYhr)

– Study after study continues to cite “career development” (or lack thereof) as

the number one reason employees keep moving on.

– Smart companies that embrace the idea of career development and do it well

will have better employee retention over time.

• Benefits for HR

– Take back control over employee retention by engaging your employees in

their career development.


– Use technology to supplement traditional class room style learning,

– Use big data and predictive analytics to create a relevant and personlized

career development plan.

– Promote internal mobility.

Step 4 – Relevant and Personalized Career Development



• Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.

– Measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”.

• Given what I know of this person’s performance, I would always want him or her on my team.

– Measures ability to work well with others on the same five-point scale.

• This person is at risk for low performance.

– Identifies problems that might harm the customer or the team on a yes-or-no basis.

• This person is ready for promotion today

– Measures potential on a yes-or-no basis.

Reinventing The Performance Review in 4 Questions

Source: HBR April 2015


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Recruiting & HR

The Performance Review Is Dead - Long Live The New Performance Review