Why Performance Reviews are Dead (And What to Do Instead)
They tend to sneak up on you like a thief in the night.
If you’re consistently doing a good job, they probably seem like a giant waste of time. If your performance has slipped in a few areas, they probably feel like being sent to the principal’s office.
Either way, chances are your dread them just as much as your team does.
We’re talking, of course, about the annual theater of the absurdity known as the performance review.
The thing is, there’s a growing consensus that performance reviews don’t work. Both managers and their direct reports don’t get much out of them. A 2009 study found that 4 out of 5 employees want to change the performance review system, and some companies, like Adobe, have simply gotten rid of performance reviews altogether.
But most companies still hold them, despite the evidence that performance reviews are a broken system.
We found this fact echoed in our annual State of the Office Manager Report, a first-of-its-kind survey of office managers from across the U.S. When asked how often they received feedback, our respondents most often replied that it was either once a year or not at all (48%).
If the performance review isn’t quite dead at your organization, it should be. Here’s why.
Why Performance Reviews Suck
They’re Focused on the Past
By definition, performance reviews are backward looking. The exercise is predominantly focused on evaluating past achievements and identifying areas of excellence or deficiency.
Why is this such a bad thing? Simple – the skills your team needed yesterday are not necessarily the ones they’ll need tomorrow.
It’s possible – even likely – that the skills that enabled their success in the past are different than ones they’ll need to move your company forward in the future. Likewise, there’s also a chance that their past deficiencies won’t be relevant in the future, so focusing on correcting them will be a wasted effort.
They Feel Like Being Called Into the Principal’s Office
The way they’re done at most companies, annual performance reviews almost always feel like punishment. The purpose of these reviews is invariably to root out areas of weakness, even when you’re doing a good job.
For this reason, performance reviews skew negatively, and can give employees the impression that their many successes are overshadowed by one or two missteps.
This disproportionate emphasis on mistakes can lead to an atmosphere where employees are afraid to make them – and that’s a major pitfall.
Mistakes shouldn’t be avoided at all costs. In fact, the opposite is true. Companies with healthy, growth-oriented cultures know that mistakes are opportunities for learning.
Likewise, innovation requires setting goals that are just beyond your reach. These “stretch goals” require your team to make breakthroughs in order to achieve them. Just sticking to the same old “tried and true” methods is a sure recipe for mediocrity.
They Aren’t Prescriptive
The point of a review is to give an assessment of the quality of an individual team member’s performance. Most of the time, the conversation ends there.
But that really isn’t all that helpful, is it?
Figuring out HOW or WHY you underperformed in a given area is usually neglected – it’s just not part of the process. Not only that, employees need a plan for how to get better in the areas that matter, something that reviews just aren’t designed to do.
The Best Possible Outcome is the Status Quo
Performance reviews often feel pointless (and a giant waste of time) for top performers. If your team is consistently hitting all or most of their numbers, their annual review probably feels like a mere formality.
If you’re their manager, you might give you a smile, a shrug, and say, “You’re doing a great job.”
And really, this is the best outcome you can hope for in the performance review system.
In other words, the best case scenario in a performance review is NO FEEDBACK WHATSOEVER.
This means that under the best circumstances, you’ll simply maintain the status quo. But the status quo just isn’t good enough to win anymore.
Ok, so if performance reviews aren’t the answer…what should takes it place?
Growth Plans. Here’s why.
Why Growth Matters
Let’s pause for a second and talk about growth.
If you work at a more established company, you might not think growth is such a big deal. And we get it – it probably seems like all this growth talk applies more to those ten-person startups where employees hoverboard to work and spend half their days snapchatting while playing ping pong and doing iced-coffee keg stands.
Here’s the thing though – growth is crucial for everyone, regardless of company size or industry.
All companies (even those big, dominant ones) need to constantly adapt to the lightning fast rate of change in modern business. New technologies, changing markets, and new competitors can (and do) disrupt business as usual.
Companies that win need employees that are nimble, adaptable, and who constantly expand their skillsets.
Time and time again, we’ve seen evidence that the growth of the individual is directly linked to the growth of a company. Companies need to be getting better all the time. And don’t forget, “company” is just another way of saying “people.”
The bottom line? If your people aren’t growing, your business could get left behind.Companies that win need employees that are nimble, adaptable, & expanding their skillsets. Click To Tweet
Why Growth Plans Rule
Growth Plans Are Forward Looking
Perhaps the most obvious difference is that while performance reviews look backwards to evaluate the past, Growth Plans are all about how to continue to provide future value.
The key difference is that Growth Plans start with desired future outcomes, and work backwards from there. Managers work with their employees to identify objectives that will help make the biggest impact, and determine the steps – and skills – that it will take to get there.
That’s not to say that Growth Plans don’t hold individuals accountable for past performance. Growth Plans have accountability baked in through regular progress check-ins. In fact, they actually provide a higher standard of accountability since check-ins are more frequent.
Growth Plans Clarify Goals
Because they start with objectives and track against them, Growth Plans require employees to constantly think about and reevaluate their goals. Doing so helps ensure that an employee’s efforts are always purposefully directed and aligned with essential tasks.
Growth Plans also have the added benefit of flexibility. You can’t expect to nail everything on the first try – goals included. Instead of revisiting goals and performance once a year, Growth Plans ensure that you’re constantly checking in to make sure that the right goals are being pursued.
Growth Plans Address Professional AND Personal Growth
Performance reviews are basically limited to your job function. Their intent is to grade your performance in your current role and not much else.
Growth Plans, by contrast, are wider in scope, designed to address your current job performance, career aspirations, and personal development.
Personal goals are just as important. These include goals in areas like family life, creativity, and health and fitness. These can include taking up a new hobby like rock climbing, going on a set number of dinner dates, or finally finishing that screenplay.
What’s more, Growth Plans don’t just focus on the individual’s contribution to the company in her current role, but also take into account where she wants to go in her career. This helps demonstrate that the company has their best interests at heart, and that their advancement is a top concern.
Growth Plans Provide A Path to Get There
While performance reviews usually fall short of prescription, Growth Plans are designed to provide the means to achieve your goals.
By means, we don’t just mean specific strategies and tactics. Growth Plans also take into account the skills and habits required to meet your growth objectives. If you don’t have a particular skill set quite yet, Growth Plans help you figure out how to acquire them.
Growth is a Fantastic Recruitment and Retention Tool
The absolute last thing you want your employees to feel is that they’re stuck in a dead-end job.
But if you aren’t actively providing both opportunities and tools for development, that’s exactly what your company will feel like – a dead end. Your people need to feel like they’re constantly growing, or they won’t stay.
A growth-oriented culture isn’t just important for current employees. It’s also a fantastic recruiting tool.
Highlighting a culture of growth and development is the perfect way to attract growth-minded employees. And these are the employees who are most likely to be engaged in their work.A growth-oriented culture is also a fantastic recruiting tool. Click To Tweet
Growth Plans Ask Why
As you’ll see in the example below, Growth Plans require participants to think about the “why” behind their strategies and actions.
Constantly asking “why” forces both manager and employee to think critically about what they’re doing. “Because that’s how we’ve always done it,” is no longer an acceptable answer.
How to Launch a Growth Plan at Your Company
Now that you’re armed with the information to convince your company’s leaders to ditch those stodgy performance reviews and replace them with far superior Growth Plans, it’s probably a good time to take a look at exactly what a Growth Plan might look like when deployed at your org.
We’ve put together a step-by-step guide to implementing Growth Plans at your company. This sample is based on SnackNation’s IDP (Individual Development Plan) program, the model that we use for all of our awesome, growth-minded team members. You can download a sample IDP here.
Ideally, you want to start this process in mid-late November, and use December to test some of these strategies and adjust your goals if necessary. Again, you might not nail it the first time out, and if you wait until January to begin the process, you won’t have time to adjust.
1. Pick a Theme
Your theme is a simple, overarching idea that will help ground you and provide a framework for how you approach the year ahead. It should also speak to the main goals you want to achieve.
We make this the first step because it helps align all your goals and activities around a central purpose.
Themes can be just a few words, or a lot longer – it’s up to each individual to come up with something meaningful and inspiring.
In the past, I’ve used “Why not me?” which expressed my desire to break free from my inner critic and make big strides in my work and life.
But it’s not just enough to pick a theme. The employee is also asked to explain why she chose that theme. This exercise helps ensure that her theme (and therefore her goals) track back to some meaningful motivator.
If you have a hard time naming why you chose your theme, then it probably isn’t strong enough.
Here are a few examples of themes and their why:
- “Creation over consumption.”
- Learning and consuming knowledge is insightful, but real value comes from the struggle of creating something new. Time to turn those thoughts into action.
- “Do more with less.”
- We are all limited by finite resources or constrained by budgets. Those who win see the abundance in life, not the scarcity, and are able to consistently do more with what they have.
- “Health above all else.”
- When it comes down to it, you can’t impact anyone else without a solid foundation of mental and physical health for yourself.
2. Choose 3 Personal and 3 Professional Goals
The next step is to identify three personal and three professional goals. Make sure they include both short and long term targets.
Goals should be SMART, meaning Specific, Measurable, Attainable, Realistic, and Timely. You don’t want amorphous goals – it should be really obvious if you’ve hit or missed your goals.
For instance, “get in shape” is not a good goal. “Lose 10 pounds,” “improve my mile-time by 30 seconds,” or “go to the gym 15 times in a month,” are all much better. That’s what we mean by measurable – you either hit these numbers or you don’t.
3. Set Target Deadlines
Once you have your goals, break them up into manageable chunks and assign target deadlines for each.
Why deadlines? As the Harvard Business Review pointed out, deadlines are a great way to help you prioritize and actually get things done. Make sure that you space your deadlines out. It can be tempting to think of all of your goals as year-long projects ending at the stroke of midnight December 31st, but that’s a surefire recipe for failure.
Also keep in mind that you can reassess and adjust deadlines throughout the process.
4. Audit Strengths & Abilities
Here’s where Growth Plans tend to really stand out from performance reviews.
The first step is to take stock of your skills and abilities. Ask yourself, what are you good at? What activities give you energy? What are you known for on your team? List these out.
It’s important to bring your manager into this conversation, because they might see strengths that you might not recognize. For instance, you manager might know you as someone who is great at teaching and training others on your team, but you might not realize how valuable that is, or even be aware of your acuity in this area.
Next, compare these with the skills needed to achieve your goals. Where do they overlap? What’s missing? Separate the skills you already have versus the ones you need to acquire.
Finally, work with your manager on a plan to pick up these missing skillsets. Maybe there’s a free online course on web development or graphic design, or a sales podcast you can listen to on your commute. The point is, create a plan, set deadlines, and close the skills gap.
5. Find Accountability Partners
Select two (ideally) accountability partners other than your manager, one personal and one professional. One should be a colleague at your own company or peer at another, the other should be someone in your personal life, usually a friend or family member.
Set at least one call or meeting per quarter to check-in with each other’s goals. Your accountability partner is there for your support (and vice versa). Even though you’ll be meeting frequently with your manager, it’s important to have someone who knows you on a personal level hold you accountable. You’ll be more likely to speak openly about any difficulties you’re having, and can offer advice and help you adjust.
Remember, don’t just ask for their help with your goals – offer to help hold them accountable for their growth as well.
6. Check-in Frequently with Your Manager
Meet on a monthly basis with your manager to track your progress, and adjust goals (and tactics as necessary). If something isn’t quite working, figure out why – it may just be that the goal isn’t as important as you thought it was.
Do you agree that performance reviews should go the way of the dinosaurs? What other growth or accountability systems have you tried?
Let us know in the comments below.