Younger generations of empowered employees and the continuing proliferation of remote work are transforming the workplace. Much work today — especially the knowledge work within the legal industry — is more flexible and less location dependent. Further, younger employees are more likely to seek work that is rewarding and leadership that is interactive, and they are less willing to accept the one-way command-and-control structures of the past.
One relic of this old worldview is the yearly performance review, with its emphasis on checklists and performance scores. Nobody likes traditional performance reviews. They are top-down, time-consuming, production-halting, anxiety-provoking and sometimes adversarial, and generally look to record the past rather than develop future performance. Since these old-style reviews typically happen once a year, they are a blunt instrument at best, ineffective for course correcting in today’s fast-paced workplace.
“There is no evidence that these programs increase either motivation or performance,” says John Boyce, Vice President of Human Resources at AMSOIL, Inc., where he recently instituted a new performance management system. “Our performance management program is the cornerstone of our retention strategy.”
By reimagining the traditional performance management conversation and moving to a strength-based program, Boyce believes that everyone benefits. “Shifting the emphasis from manager to employee makes the [performance management] conversation a powerful, positive experience that builds trust and strengthens the relationship between the manager and employee.”
TOWARD A NEW STYLE OF PERFORMANCE MANAGEMENT
One of the biggest raps on the old model of annual performance reviews is that it brings work to a standstill, stirring competition and killing team cohesion and productivity. Employees stop working to fill out forms and stress about the meeting, while their managers lock themselves in their offices and struggle to remember who did what the previous 12 months. The process hits an even narrower funnel when the managers send their evaluations up the chain for approval.
This traditional performance review is inefficient and ineffective, akin to using a kitchen knife for scalpel work. In a recent SHRM article, a WTW survey reported that 72% of employers agreed that supporting the development and productivity of their employees is a primary objective, but only 31% said their performance management program was meeting that objective.
However, rethinking performance reviews doesn’t mean getting rid of them altogether. Providing employees with the necessary feedback is still an essential managerial responsibility. Many leaders and businesses depend on performance reviews to reprioritize duties, clarify accountability and deal with ongoing issues. Metrics, key performance indicators (KPIs) and benchmark goals are still the best ways to measure employee performance. We don’t need to change what we do — we need to change how we do it.
“Shifting the emphasis from manager to employee makes the [performance management] conversation a powerful, positive experience that builds trust and strengthens the relationship between the manager and employee.”
A new approach to performance management is required to lead employees effectively — an approach that is more frequent, less top-down and more interactive. Many firms are adopting monthly check-ins regarding quarterly goals, addressing issues immediately as they arise, and closing out the year with a scaled-back (but still formal) annual review. Interacting with staff throughout the year cultivates employee success and engagement and attracts more motivated workers. Additionally, recruiting firms are finding that evolved performance management programs are a strong recruiting tool for younger workers.
NEW STRATEGIES IN PERFORMANCE REVIEW
What changes in the performance process are most effective for today’s businesses? Here are six you can try.
1. Talk, Talk and Talk Some More
Don’t limit talks with your staff to once or twice a year. Schedule frequent conversations to discuss performance. And don’t be afraid of spontaneous drop-ins as a way of establishing and maintaining a collaborative relationship. Make sure these conversations are engaging and reciprocal — you want your employees invested in their own growth and performance.
These conversations don’t need to be marathons. Keep them short, focused and simple. Set monthly or quarterly goals and priorities as a place to begin. Then use one-to-one guides to direct and document the conversations, during which you can discuss things like growth, customer feedback and/or recognition.
Once the meetings are on the calendar, don’t reschedule unless there’s an emergency. When you reschedule or postpone, you imply the meetings are not a priority, and the employee will follow your lead.
2. Set Clear Expectations
Set clear performance goals and expectations at the beginning of the year so employees understand their responsibilities. This practice lends objectivity to the review process by introducing measurable targets. It also keeps the conversations focused on the future and gives employees goals to work toward. Having these conversations early in the year allows the leader to explain how each employee’s duties fit into the firm’s overall strategy.
“We don’t wait for an annual review to address issues. We address anything — positive and negative — right away.”
Business in the 21st century is nothing if not fast-paced. Markets change quickly and firms must adapt just as quickly. Last month’s job requirements may no longer apply. Remember to be flexible with your expectations, adapt your goals or metrics when needed, and explain these changes with full transparency.
Heather Parker, Owner of Parker Law, hosts a quarterly strategic retreat with her staff to establish procedure improvements and quarterly goals, and to set personal and professional development goals for each staff member. These goals then become part of the measurements used in her performance reviews. “These retreats are essential to our understanding of where we want the firm to advance over the next three months,” says Parker. “No one is excluded from the process, and everyone has an equal voice.”
3. Simplify the Process
There is no need for your review process to be complicated or cumbersome — especially with more frequent conversations.
Older methods of the annual review process had long forms, extensive questions and idiosyncratic ratings systems. They often took the leader days to complete and deliver, thus slowing the firm’s production.
Melissa Hirst, Chief Operating Officer of Altitude Community Law PC, has created a simple questionnaire using Survey Monkey. The self-evaluation, as well as the questionnaire for the supervisor and peers, has approximately four (proprietary) questions. “The answers are anonymous, and the questions are thought-provoking and open-ended,” says Hirst, who is a member of the Mile High Chapter. “But they don’t require long-winded answers.”
Simplifying the process for the review, including more frequent conversations with your staff, addressing performance issues immediately and involving your employees in the process, fosters a culture of transparency and accountability.
4. Use Self-Evaluations and Solicit Feedback
Self-evaluations are a great way to have your employees think about what they want for the year and a good starting point for learning what skills and resources are important to their success.
At her quarterly strategic retreats, Parker has each employee complete a self-evaluation for their last three months. “The self-evaluations are a way to treat your employees like the adults they are by giving them a voice in their own success or failure. We have found completing these self-evaluations on a consistent basis helps them focus on the bigger picture,” she says.
“Performance reviews are less impactful for great employees if they don’t have items to work on. Instead of focusing on what they did wrong, we focus on the future. Now we use the review process to encourage, retain and stimulate our legacy and great employees’ performance.”
Hirst involves the entire firm in performance reviews. Her short review questionnaire is sent to the employee, their immediate supervisor, everyone in the employee’s department and everyone in the firm. Responses from the employee’s department are mandatory, but for the others they are optional. She has found that this process of inclusion has fostered an atmosphere of accountability. Adding input from employees’ colleagues or from other managers grants a fuller picture of the employees’ capabilities and contributions.
This 360 approach is not a lecture. It allows the employee to have an open, two-way conversation with their immediate supervisor. It also empowers the employee to have candid conversations with their leader about what resources and training they need to be successful. Hirst observes that the inclusion of other departments “adds value to the process and enhances the culture of mutual respect regardless of position within the firm.”
5. Create Forward Focus to End Recency Bias
Recency bias — building a review on an employee’s most recent performance while ignoring earlier efforts — is a sure-fire way to undermine your review process. Parker avoids recency bias by creating a full open-door policy. “We don’t wait for an annual review to address issues. We address anything — positive and negative — right away.” Hirst mentions that her review questionnaire has broad questions, so the focus is not on a single project.
Both Hirst and Parker establish their employee goals at the beginning of the year, which acts as a baseline and allows the employees and their leaders to map out a path for professional development that aligns with the firm’s strategies. Monthly, quarterly and annual conversations are more impactful and effective when focused on the employee’s future actions rather than past mistakes. Performance reviews have the power to demotivate employees and destroy company morale if they are not forward focused. Focusing on the future instead of the past keeps employees engaged and goal driven — especially when backed with frequent and consistent conversations about those goals.
Before Hirst changed the firm’s performance reviews, she noticed that their legacy and high-producing employees were unengaged in the process. “Performance reviews are less impactful for great employees if they don’t have items to work on. Instead of focusing on what they did wrong, we focus on the future. Now we use the review process to encourage, retain and stimulate our legacy and great employees’ performance.”
6. Divorce Merit Increases from the Review Process
When merit increases are tied to the annual review, employees focus on nothing but the bonus, which can inhibit employees’ growth and limit their ability to focus forward.
Hirst and Parker have untethered merit increases from their performance reviews. Hirst, for example, budgets for the firm in the third quarter, announces raises in the fourth quarter and puts them into effect January 1. “This change puts everyone on the same playing field and allows the employees to focus on performance and not money [for the rest of the year],” says Hirst.
Parker bases merit increases on firm — rather than individual — performance and discusses such increases throughout the year. She doesn’t discuss money during the annual review, which eliminates drama and highlights performance and goal setting.
PERFORMANCE REVIEWS AS LEADERSHIP TOOL
Current statistics, surveys and interviews indicate that Millennials and members of Gen Z crave feedback and are focused on career development. The once-a-year model is not going to keep them engaged. When done correctly, a revamped yearlong interactive performance review motivates employees, boosts employee engagement and inspires them to meet the firm’s goals. It also prioritizes employee opportunities and clarifies accountability, while helping leaders learn how to give feedback calmly and helpfully.
“People like to know their relationship to organizational goals and how these impact their future with the company and our revamped [performance management] program facilitates that,” says Boyce.