I Come to Praise the Annual Performance Conversation, Not Further Bury It
The choice between frequent performance coaching and annual reviews need not be a choice at all.
So, you’re planning to join the legion of organizations that have dropped the annual performance review. Instead, you will institute a company-wide commitment to providing feedback throughout the year, decoupling important conversations about performance from the ugly and awkward scoring used to guide the annual pay-raise and promotion cycle. You will move from a culture of assessment to one of ongoing coaching.
I applaud you. And I wish you better luck than I’ve had in keeping to all of the commitments required in such a culture.
It’s not easy to talk about performance and, as Nik Kinely and Shlomo Ben-Hur explain in the Summer 2017 issue of MIT Sloan Management Review, it is even harder to do anything about it. Effective performance coaching takes discipline, planning, and a great deal of thoughtfulness on both sides of the table. It’s sometimes not pleasant. What do we too often do when faced with difficult tasks that will not directly or immediately affect something we can measure? Yes, that’s right. That’s exactly what we do. We procrastinate. We are only human, of course.
I am not here to raise the industrial-age annual performance assessment process from its shallow grave. As many experts have noted, it is rife with faults. It focuses on what has already happened rather than on planning for what has yet to come. It can feel punitive — or at least judgmental. It is reductive and, in some cases, forces ridiculous formulaic comparisons between employees with wildly different roles and skill sets. It fails to emphasize the kind of timely feedback that actually can make a real difference in the quality of performance.
And nevertheless I have just scheduled formal, year-end meetings with each of my direct reports.
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I do not believe this is an either/or decision. You can have meaningful weekly or biweekly meetings with employees as well as a deeper, more structured conversation annually or semiannually.
We are going to assess people in some shape or fashion, overtly or not. We are going to tie our judgment of the quality of their performance to their pay. Outside of the most old-fashioned models for sales-force compensation and the most cutting-edge algorithms, how we manage our employees’ opportunities for financial and career advancement remains highly qualitative.
But that’s only one piece of the puzzle.