The annual performance review, often viewed as little more than a bureaucratic box-ticking exercise, seems to be on the way out. The likes of Deloitte and Microsoft have abandoned annual reviews in a blaze of publicity. What gets less press is that employers should still have a system in place to manage staff performance.
Review more, not less
Managers who think the death of the traditional performance review means they can devote less time and effort to providing feedback to staff should think again. Many of the companies that have abolished performance reviews have replaced them with regular ‘performance chats’. It’s an approach recommended by Matthew Taylor, an associate director at recruitment agency Robert Half.
“Ideally, managers should meet with their direct reports to discuss their performance once a month,” says Taylor. “The manager shouldn’t cancel a performance chat unless it’s unavoidable. Doing so sends a message to staff that their career development isn’t a priority.”
While sitting down with employees might not seem as important as the day-to-day priorities, it can affect engagement levels and staff retention over the longer term. Taylor says, “The feedback we get from lots of employees is that they’re not getting the feedback they were expecting, which leaves them feeling disengaged. If managers want to retain staff, they need to find time for them, even if it’s just a quick and informal coffee catch-up once a month.”
Don’t just tick the boxes
When it comes to performance review systems, one size doesn’t fit all. Rather than ticking KPIs off a list, benchmarks and rewards should be tailored to each employee.
“Managers should be identifying the skills a staff member already has, as well as the ones they need to acquire to progress,” says Bansrii Shah, a senior business manager at Robert Half.
“There should also be a career plan in place. Performance reviews should focus on taking the next step and what the reward will be once it’s taken. The reward can be a pay rise or promotion, but it doesn’t have to be. If it’s not possible for a manager to give a staff member more money or a new role, they may be able to arrange something such as more flexible working conditions.”
Regular catch-ups can also strengthen your workplace relationships. As Shah says, “Don’t underestimate the power of simply saying thank you to a worker who has been putting in the hard yards.”
Be sensitive and sincere
When a staff member is underperforming, it needs to be addressed. However, “Nobody should be summoned into their manager’s office and told they’re being performance managed, starting immediately,” says Taylor.
“Have what I call ‘the conversation before the conversation’. If a team member isn’t performing, raise your concerns and let them respond. At the end of the conversation say, ‘If there’s not a change in the next month or so it could result in stronger measures, such as formal performance management.’”
“There are legal and ethical reasons to do whatever you reasonably can to help a flailing staff member improve,” adds Shah. “But even if those weren’t considerations, you’d still need to be aware of the effect on the rest of your staff if they see a colleague treated in what appears to be a ruthless fashion.”
In Taylor’s experience, people who are performance managed well can often rise to more senior positions. “You have to say – and believe – that performance management isn’t a career-ender. It’s about someone getting the training and support they need to help them get back to the level of performance that got them hired or promoted in the first place,” he says.
Taylor says staff at his organisation have been able to bounce back after less than favourable conversations with management because it’s constantly being reinforced that the process is there to keep them around, rather than to get rid of them.
“We assure people that performance management isn’t a point of no return, that as long as they do the requested activities and meet the agreed targets, they will get through it.
“It’s not uncommon for people to say afterwards that they’re relieved to have gone through [negative conversations with managers] and come out the other side, because it has set them up to flourish in their future career.”