It was the eighties that inflicted the dreaded performance review and it is possibly this crime, rather than that of shoulder pads, that has made many look back with minimal fondness on those corporate years. However, for all those still caught in the clutches of this annual event there is now hope.
Organisations such as Accenture Microsoft and Deloitte, among the most well-known, are abandoning the annual performance review in favour of something far more engaging and interactive. What they are doing, along with many other progressive companies, is replacing the old system with one that is more fluid and dynamic, providing employees with feedback when it is needed rather than six months to a year down the line.
“We are seeing that the traditional performance reviews are no longer as effective as they have been in the past,” says Sandy Mohonathan, HR Director: MART Accenture. “At Accenture, we’re on a journey to revolutionise how we help our people to be their best. This means moving performance management backstage and bringing performance achievement to the centre stage. We’re leveraging our core competence of growing and developing our people and taking it one step further with a bold new approach to Performance Achievement.”
The Accenture solution uses real-time, frequent and forward-looking coaching discussions that help employees to achieve their best. The organisation asked: why is the performance review not working and should it be on the way out? And the answer: performance measurement had to change from trying to measure the value of the employee’s contribution after the fact.
Lebo Tseladimitlwa, vice-president: human resources at DHL Express, agrees: “The methodology of the old performance review is changing from the old way of assigning and fixing goals to a new way of giving immediate feedback and coaching.
A great example is if a manager is attending a meeting with a junior who is to present for the first time — the manager can use the opportunity to review with them the lessons they have learned, how they feel they can do better, how they handled it and give advice that is both relevant and useful.”
The themes that emerge from any discussion around the performance review tend to be: time, administration, inaccuracy and demotivated employees. It has also got the potential to damage relationships between employees, managers and the organisation, which, in turn, may impact on productivity, loyalty and employee retention.
“Performance reviews will always be relevant, but it depends on how they are done,” says Tumelo Mokwena, general manager: human resources at Transnet Freight Rail. “Organisations don’t perform, people do. The challenge of the old system is that it should not be utilised for making reward decisions only or use forced performance rankings to obtain the normal distribution curve.”
Mokwena adds that other challenges facing the old ways of measuring performance include issues around employees understanding what performance standards are expected and manager engagement: the difficulties of assessing performance, giving feedback and taking corrective action. This is a sentiment echoed by Tseladimitlwa who believes that, in many instances, managers battle to keep up with expectations and see people as an additional burden.
“Managers are now finding that they are dealing with their core functions and people, and this is a hassle as they focus on growing and training people,” she says. “Organisations expect a holistic manager who must bring in results and still manage the people in their department. To build a business you need to rather focus on providing regular feedback, addressing issues immediately and using this interactive methodology as the core strategy.”
Mohonathan concurs, using a quote from Accenture chief executive Pierre Nanterme to emphasise the point: “The art of leadership is not to spend your time measuring and evaluating. It’s all about selecting the person. And if you believe you selected the right person, then you give that person the freedom, the authority, the delegation to innovate and to lead through some very simple measures.”
What makes the so-called old system challenging is that it does not regularly support employees throughout the working year. The current process of managing performance is ineffective in helping people achieve their best; it doesn’t give them the freedom to explore and be creative, nor does it always display that all-important commodity — trust. The organisation needs to show the employee that they are trusted to deliver and perform, and not convey that they are constantly under surveillance as managers lie in wait to highlight every mistake in one tedious review.
“Investing significant time into annual, backward-looking performance appraisals and figuring out the holy grail of forced rankings simply doesn’t yield the best outcomes for our people and our business,” says Mohonathan. “Performance is an ongoing activity; it is every day after any client interaction or business interaction or corporate interaction. It’s much more fluid. People want to know on an ongoing basis if they are doing well, moving in the right direction and if they are progressing. Now it is all about instant performance management with our Performance Achievement, which is highly personal and future-focused.”
The shift from the review to achievement is one that allows for the organisation to explore more dynamic and agile methodologies for measuring their employees. Staff can be assessed against the key performance indicators of the business as well as against how they have handled particularly complex situations or clients.
It doesn’t mean that the performance review is out to pasture quite yet as many businesses cannot make the shift in an instant, and it does require internal adjustments. Managers need to be trained and supported as they move from the administratively intensive annual or bi-annual review to a system that’s far more dynamic (though possibly just as demanding when it comes to admin).
“There is a need to empower and develop managers on performance improvement methods and engage in crucial conversations with their employees to dispel the issues around performance management and its perception as a negative discussion,” says Mokwena.
“Ensure consistent and standardised measures are in place throughout the organisation so they are fair, and use the system to drive accountability and to shift the culture to attaining high performing, self-managed teams. It’s also worth making sure that the technology behind the performance review is a supporting tool and not cumbersome to use.”
Companies need to look at introducing clearer systems and levels of progress through the organisation. There needs to be less reliance on position descriptors and more open pathways to achieving promotions and recognition. Employees need to feel secure in their abilities and encouraged to overcome their weaknesses.
“The work environment and employee profile and expectations have changed and we need to adapt to it,” says Mohonathan. “Work is interconnected; it’s about collaboration not competitiveness. Flexibility is key, as ‘one size fits all’ does not work anymore. Employees, especially millennials, want real-time feedback.”
The ability of the organisation to offer support, guidance and feedback in real time is certainly the way in which current trends are pointing. Organisations are starting to recognise the value of giving their employees rich insight when it is needed, thereby allowing them greater scope for growth, both personally and professionally. The performance review is not dead; it is possibly not even dying. It is, rather, undergoing an evolution that allows for the old to blend with the new.
“Yes, the old system is too old and needs some reviewing, but the key message, even with a new system, is that people constantly need feedback, with examples that show them how to do things better and that give them guidance,” concludes Tseladimitlwa.