The performance review is dead – long live the performance conversation

Instead of an uncomfortable, formal meeting once, twice or three times a year, the expectation is that manager and employee will meet informally and frequently throughout the year to discuss how things are going, says Christine Whelan.

On pretty much every human resources website and forum these days, you’ll find a big story telling us that one or another large, well-known company is abandoning the annual performance review.

We discover through these articles that performance reviews are time-wasting, bureaucratic, energy–sapping remnants of a bygone era in human resource management.
Managers hate doing them, employees dread them and they don’t achieve what they set out to do, which is to provide an objective review of an employee’s performance over a 12–month period. I think it would be difficult to find anyone who would completely disagree with this view.

Reading these headlines it might be tempting to conclude that there will no longer be any monitoring of an employee’s performance. Instead we’re just going to trust that they will be motivated and enthusiastic enough to deliver what their employer expects, on time and to at least an acceptable standard. Dreams, as they say, are free.

What these articles in fact suggest is a move towards an environment where a manager really gets to understand the performance of those reporting to him or her; an improved workplace where employees will know throughout the year what’s expected of them and how they’re progressing in meeting those expectations. How will this be achieved?

Instead of an uncomfortable, formal meeting once, twice or three times a year, where the manager sits down with the employee and tells them how they’re doing against their KPIs, the expectation is that manager and employee will meet informally and frequently throughout the year to discuss how things are going, whether changes need to be made and what both are looking for in the future.

Employee development therefore becomes an ongoing part of the discussion and can be tailored to suit the present and future needs of the individual employee and their role.

Such a process also ensures that positives can be recognised and negatives addressed as they occur with no need for brains to be wracked at the end of the year to remember what happened 11 months ago.

All in all, this move appears to offer a win-win scenario and is likely to gain support from managers and employees alike, as well as potentially helping to lift employee, and therefore business, performance.

The big question for those involved in remuneration though is how the proposed new performance environment will mesh with decisions around remuneration and reward.

A few questions immediately spring to mind:

  • Will employees still be rewarded for performance through the remuneration system, or will we look for different ways to reward?
  • Will we still be rating performance as an outcome of the ongoing performance conversations?
  • Could we be looking for future potential rather than simply past performance when we think about salary increases?
  • If we move to salary increase recommendations rather than performance ratings, how will we avoid the age-old accusations of subjectivity and favouritism in decision–making?
  • How will we make sure that employees have confidence in systems that may be much less prescriptive than previously?

It’s always good to have new life breathed into what’s become an old, established regime – let’s make sure we develop solid, effective ways that will enable the new regime to deliver to its full potential. 

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