Annual performance reviews. After reading these three words in an email subject line, managers and employees alike often let out a sigh or stare blankly into space.
Why?
Employees find their reviews don’t happen consistently or aren’t effective in assessing their goals and furthering their career development. Managers feel overwhelmed with the administrative process and paperwork, and, as a result, almost dread this time of year.
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These reactions show performance reviews aren’t, well, performing. A practice meant to encourage professional growth and facilitate an honest conversation between manager and employee is being overshadowed by red tape: strict timelines for reviews to take place, long-drawn and formulaic discussions, and piles of forms for both parties to complete.
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If your performance review process isn’t producing the results it’s meant to, it may be time for a change.
Goodbye to performance ratings
Innovative, top-performing companies with highly engaged employees no longer conduct traditional annual performance reviews. Instead, they encourage their employees and leaders to have meaningful conversations about their performance and development throughout the year.
No performance ratings. No more tedious forms to fill out.
At Colliers, employees recently revealed that the single most important factor that would help increase their engagement is performance management. Yet our own People Services (HR) team knew the performance review program just wasn’t doing what it was intended to do, which was to encourage a high-performance culture.
We take employee feedback seriously at Colliers. So, after receiving the same input about our performance review process time and again, we knew we needed to do something. We realized if we wanted to build an inclusive culture and be collaborative in how we work and get results, we needed to change how we manage and reward performance.
Checking in instead of checking out
Taking our cues from innovative companies like Adobe, REI and Sony, we replaced our annual performance management process with what we call a Performance Check-In. A check-in is exactly what it sounds like: a regular check-in between an employee and manager about how things are going, providing opportunities to discuss goals and ongoing development.
Employees and managers can check in with each other anytime throughout the year. We provided general guidelines for facilitating meaningful conversations and giving feedback so everyone’s clear on what the conversations should be about. All we ask is check-ins occur at least once per quarter. The rest is up to the employee and manager.
We introduced the new Performance Check-In program in December 2014 for implementation in 2015. So far, the response from employees and managers has been positive. Employees have told us they feel empowered to ask their managers how they’re doing and outline what has been accomplished when it makes sense, instead of creating a laundry list at the end of the year. And managers have a better sense of ownership and more autonomy over how to reward top performers and coach those who are new in their positions or need additional help.
No more big sighs and blank stares whenever the subject of performance reviews arises.
Flexible, fluid and frequent
The performance review as we know it, is no more. The rigid practice that once overloaded managers and employees with process and paperwork has given way to an organic, fluid conversation. The redefined performance review gives both managers and employees flexibility to have meaningful discussions when they’re needed, not when they’re mandated. This way, employees are constantly aware of how they’re performing in relation to their managers’ expectations, and managers know their employees’ professional goals and intended career paths. And both parties can make decisions accordingly — and nimbly.
No waiting for a specific date to have an important talk. No big surprises at that designated time of year.
What results is a performance management program that’s more prevalent in the minds of your workforce, thanks to its frequency and relevance. Managers and employees have stronger relationships, thanks to their honest conversations.
Organizations that have adopted this approach to performance management see increased productivity: engagement levels between 83% and 87%, and a 33% decrease in voluntary attrition.
We’re glad we took the leap and replaced our performance management process with a program that works for our company and culture. In turn, I encourage you and the rest of your HR team to take a step back and assess the effectiveness of your performance review process. If your current program is not benefiting your workforce and overall business strategy the way it’s meant to, it’s probably not the right one for your organization (anymore).
We took a chance on giving our performance management program a face lift and are starting to reap the rewards of our decision.
We know you will, too.