Performance reviews are a waste of time and money. What’s worse is that they squeeze out the ‘spirit’ from our team and, rather than help to improve performance and productivity, actually hinder it. This is why we have moved away from the ‘annual review’ approach, and have looked to better alternatives.
The obvious problem with performance reviews is that a significant amount of time and energy needs to be put aside to gather information and sit down with each staff member to discuss their positive or negative contributions to projects they have been involved with, and the business, over the course of the last year or six months. All for an endeavour that neither management nor the individual staff member particularly looks forward to.
Employees waste time worrying about their review before it happens, and more time afterwards worrying about how it went, often distracting them from the tasks at hand, leading to reduced productivity and a negative atmosphere in the workplace.
On top of this is the pressure of trying to adequately communicate the value of their contribution, especially if they are not very good at selling themselves. Then there is the fact that such practices reinforce the inequality of the employment relationship – management or the business owner ultimately rating ability and deciding the employee’s fate – which further affects workplace culture. It all adds up to a level of worry and disgruntlement, and doesn’t really produce anything by way of valuable lessons to take from it all.
This is because the review tends to address past behaviour, often for a project that has long since passed. If we’re not happy with the job that’s being done, we should say so at the time, not many months down the line when nothing can be done about it. If we can't agree on how the job should be done, perhaps it is not a business relationship worth salvaging, and knowing this at the time is better than deciding it after the fact.
When following the annual review approach, there is simply no motivation, or support, there to improve performance, no sense of everybody being on the same team and collaborating to provide the best service possible for clients, no means by which to plan for development for the future, and this too can have a negative effect on workplace morale.
In short, annual reviews have become a clinical examination of past actions, rather than a collaborative attempt to grow and improve together in the present and future. They fail to keep the workplace ‘human’, because they don’t involve continuous and individualised support and development for each team member.
Ongoing Support and Collaboration
The workplace is changing, and we now have employees who are motivated, have more ideas and produce better results when they are treated like trusted and valued collaborators, rather than merely names on the payroll.
What we now aim to do is foster a workplace environment where ongoing support and collaboration between team members and management is central to every project we undertake, in order to ensure that we all understand what needs to be done to improve, as we do it.
We should aim to meet every few months, weeks, or even days, for creative planning sessions, only offering feedback if it is requested – without the grading or measurement of performance, or the report card.
Replacing annual reviews with frequent, informal check-ins and conversations about ongoing skills development changes the focus from ranking how well team members are doing, to building the skilled workforce needed to be competitive, not just today, but into the future.
This approach isn’t just good from a business planning perspective, it also just makes sense, and creates a happier work environment. Feedback delivered during a project enables team members to process and apply advice and improvements immediately and effectively, while putting them in charge of their own growth leads to higher employee satisfaction.
Standing out from the competition requires innovation, and finding productive ways to work together, and that is more likely to come from a work culture that is open, connected, and inspires its team to produce their best work.
Building for the Future
This puts both the business and the employee in a good position when it comes to deciding on plans for the coming year. It’s never an easy, or desirable task, to come up with the correct level of compensation or reward for an employee’s performance and development, but by looking at industry salary levels and the employee’s contribution, willingness to develop, and ability to collaborate on projects, we can come to a fair and equitable agreement that suits everybody.
Rather than use grading systems that relate to the previous year, I’d rather sit down with someone and say that we’ve looked at their contribution to the business, as well as our own business goals, operational costs and IT budget for the next year, and present them with a figure we feel is appropriate for their involvement in what the business is planning to complete.
The salary could be an increase, or flat, and it is then up to the employee to decide whether they want to accept this. If it is fair, if you have shown that you are focused on the employee’s ongoing development, are interested in improving employee engagement and productivity rather than just measuring it once a year, and have created a good workplace culture that fosters collaboration and teamwork, they are more likely to agree to what you propose.
At Optimity, we not only foster an open and collaborative workplace for ourselves, we also aim to do the same for you through our range of IT solutions and consulting services. Find out how we can help your business plan for the future by getting in touch with us, and find out what others had to say about us below: