Not sure if you’ve noticed, but performance management is getting a second (or third or fourth) look these days. Without question one of the most controversial organizational processes of the last 50 years, performance management is getting some interesting recent publicity. What started as a way to differentiate performance for the purposes of applying compensation morphed into a sort of “feedbackapolooza” with the advent of competency ratings and the balance of “what” and “how” (results and behaviors). This was received as mostly good news in the Human Resources arena, as it helped us reward and recognize teamwork and civil obedience among the workforce.
Personally, I’m a fan of the equally weighted “what” and “how” model, but now it looks like the pendulum might be swinging back a bit. In last week’s Wall Street Journal, I read about a recent Hewitt Associates study that found 11% of manager’s and 10% of other employees’ performance reviews were being based ONLY on results (using objective measures). These numbers were up from 7% and 8% respectively in 2005. The survey further stated that 33% of all executive’s ratings were derived solely from results, which is up from 20% in the 2005 survey. OK, so these might feel like small moves, but they do represent a bit of a trend.
Two new books are also finding their way into the performance management discussion. The first is called One Page Talent Management (Effron and Ort, 2010) which presents a case for framing the behaviors any employee is being held accountable for as an actual goal – one that can be measured in terms of progress toward completion, just like results objectives (however subjective this assessment might be). In other words, we might not rate every employee on the same set of 7-8 behaviors, but rather set up unique behavioral elements of the performance appraisal that fit each person’s specific development plan (determined during the goal setting process). In a sense, this probably tips the scale a little bit back to results, as it seems reasonable to include only 1-2 of these “how” development efforts per year, whereas you might have 3-4 “what” goals. An interesting approach to be sure (btw, this is a terrific book with lots of solid ideas).
The second book is Get Rid of the Performance Review! (Culbert and Rout, 2010) and it has a simple premise that really pushes the envelope – it calls for the unequivocal end to performance reviews as we know them. Culbert, a UCLA management professor, teams up with Wall Street Journal senior editor Lawrence Rout to tell us why performance reviews are bogus and how they undermine both creativity and productivity. Culbert and Rout do offer an alternative - the performance preview, which is designed to hold people accountable for their actions and their results and give managers and their employees the kind of feedback they need to improve their skills. It’s especially intriguing as a tool for teams.
One of the cool things about working in leadership development is watching the macro trends within HR. I feel the sands shifting with performance management and the performance review process… it wouldn’t surprise me a bit if we see a movement back toward a results focus, or away from annual reviews entirely.
This is one I’d like to here from you on – what’s your company doing with performance management, and do you have any innovative ideas? Or what do you think of the premise of doing away with it altogether?