With the start of 2017 I couldn’t help but think about the dreaded performance review process that may be underway in some organizations and how this is so stressful and time consuming for managers and employees. Especially for HR folks who police the most unpopular process ensuring to hit deadlines forced upon them at corporate offices around the globe.
Much has changed within the fabric of business large or small … we are operating in an environment with multi generational employees, baby boomers, millennials and soon the generation Z will join the workplace. Organizations may have tweaked their performance management processes, but there has not been such a quantum leap in revamping the process like we have seen in the past few years.
As an HR professional and leader, I have struggled with the process. I always felt it was looking in the “rear view mirror” which, in my mind, is not an effective way to make the best decisions for business or people. Performance ratings or force ranking employees to ensure that the organizations’ performance ratings fit within the bell curve left many managers and employees questioning and trusting the value of the process. Even GE has moved away from the “rank and yank” methodology, championed by Jack Welch and adopted by many organizations in the 80’s and 90’s.
Fast forward to the 21 century and many Fortune 500 organizations such as Deloitte, Adobe, Accenture, and yes, even GE, to name just a few, have made the decision to completely move away from the dreaded annual performance review process. Business has evolved, employees have different expectations of their organizations and the need for real time feedback is not only expected from employees but also, is critical to the future growth of business and the development of talent.
Is it time to shake up the performance review process? Absolutely. Shifting the focus from performance ratings, rank and yank, to the alignment of organizational goals and employee development will no doubt improve employee engagement and reduce turnover. However, before organizations completely walk away from the annual performance review process much thought and discussion amongst leaders needs to happen. Some questions to consider;
· Do we continue to value a culture of pay for performance?
· If so, how will compensation be determined?
· How will the business ensure fair, unbiased, transparent discussions?
· How will we identify, engage and develop employees with particular attention to our high potential employees?
· Are our leaders prepared and skilled at providing 1:1 feedback both positive and developmental, to their direct reports?
· What will be the impact on the succession planning process?
· How will business balance continuous feedback with an employee perception of micro managing
Ultimately, the process needs to change – success will depend on how all employees and leaders embrace and believe in the new process!
Visit Osborne-group.com for other Principals’ ideas and opinions on a range of topics. The Osborne Group provides interim executive management, consulting and project support across all sectors and over a broad scope of service areas.
