There seems to be increasing chatter in the HR and L&D worlds that it’s time to abandon performance reviews and annual appraisals.

The claim is that these processes are a tired relic of 20th century manual work and have no relevance to today’s knowledge economy.

There are certainly some obvious problems. For example, how do we ensure managers’ views of subjective qualities such as ‘excellent, ‘average’, etc. are the same?

When I was working on a major performance management implementation some years ago, the answer was to produce vast booklets that drilled down to the level of detailed behavioural indicators.

These sorts of competency frameworks didn’t survive the need for busy managers to have something easy to work with, however.

In review systems with a direct link to pay, there is the question of how to prevent perceptions of unfairness destroying motivation and how to stop leaders and managers bending the system to suit themselves.

I even worked with a company a few years ago where someone told me that the staff pooled their force ranked bonuses and then redistributed them evenly amongst themselves.

Ditching performance reviews

A few years ago, research firm Bersin reported that around 70% of companies were reconsidering their performance management strategy - and there were some pretty big hitters among those polled.

Accenture, IBM, Adobe all claimed formal performance reviews to be expensive, time consuming and ultimately, ineffective.

Even General Electric, whom many would cite as the great pioneer of these kinds of business process abandoned its formal annual reviews and performance management system, replacing them with an app that provides more frequent feedback.

This may be a mistake

According to an article from Forbes in Jan 2018 some 35 out of 37 line managers would also happily give up performance reviews.

This makes me nervous, because I wonder what they’ll do instead - probably nothing.

Managers are busy and will have plenty of other tasks to fill their time.

If we coach our people properly we can hold them accountable for their performance and develop them at the same time.

I agree that the formal annual appraisal systems that big organisations are dismantling are largely outdated and pretty ineffective.

I cannot agree, however, that it is not a useful business process to review performance in an effort to understand what’s going well and what’s not.

In fact, the research goes on to explain that most of the companies listed are not really abandoning performance reviews completely.

Instead, they’re substituting the formal, bureaucratic approach with less formal but more immediate and ongoing feedback sessions or regular chats.

What if we coached instead?

It seems that what we need is less process and more dialogue, but with some element of consistency so that managers know what they’re doing, their people get a consistent experience and the organisation has some overview of people performance.

I think we already have such an approach and have done for some time.

If we coach our people properly we can hold them accountable for their performance and develop them at the same time.

If we take that most popular of coaching frameworks, GROW we can see it contains the four elements we’d want to address in a good performance review discussion anyway.

Goals

In exploring Goals we can combine the targets, KPIs etc. that the organisation requires, alongside the goals the individual can accept in order to make their own contribution.

Furthermore, we’re not stuck with goals set in January that are then reviewed in December, but with little point because they all got changed in June.

Reality

A good coaching session will take time to explore the current Reality as the performer sees it.

The idea is to raise non-judgmental awareness so that the individual begins to accelerate their ability to learn from their own experience. It is not about apportioning blame for things that went wrong.

Do more of what I suspect you’re doing already - play up coaching and play down performance review.

Notice though that we’re talking about R for Reality not P for Past.

One of the main criticisms of the orthodox approach to performance management was that too much time was spent raking over the past when the real challenges lay in the present and in the future.

Options

The Options stage is a good opportunity to look ahead and think about ways in which the individual might make changes and develop.

Far too many of the old-school appraisals reduced this to a matter of reaching for a brochure and finding a course to send someone on, but we’re more sophisticated now and can consider a range of on-the-job learning experiences, secondments, shadowing opportunities and so on.

Will

W for Will or Way Forward is the point at which we can turn thoughts into planned actions and, where appropriate, drill down to level of completion dates, milestones, lists of stakeholders etc.

Remember that GROW was never intended to be used slavishly and doesn’t have to be followed in sequence.

A good review type conversation may start with a discussion around Reality and end with Goal setting.

Will that do the job?

In my experience, people need five key questions answered as they consider their work performance:

• What is my job?
• How well do I have to do it?
• How am I doing?
• How have I done?
• What's next?

Answering these questions does not require endless forms.

Neither does it require the digital equivalent of endless forms. There are some incredibly sophisticated electronic performance management systems out there but again, busy managers will not use these tools unless they can see that it helps them.

They’ll find ways around them or do the minimum necessary to keep out of trouble in the same way that salespeople have been dodging CRM systems for years.

Nor is there any need for hours of time in meeting rooms, or complex consistency checks by senior management.

Next steps

Do more of what I suspect you’re doing already - play up coaching and play down performance review.

Communicate this policy clearly to your managers and remind them that a good coaching conversation, that can take place as part of daily work rather than a separate activity, answers the five questions above and will result in people feeling much more focused on their priorities and far more motivated to get on with them.

Of course, line managers may need skilling or upskilling in coaching skills, but we’ll have saved a fortune giving up redundant appraisal processes and we might as well put the money to good use.

Interested in this topic? Read Motivation madness: the disconnect between employers and employees on appraisals.