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Thursday, June 23, 2016

It's Time to Lay Performance Reviews to Rest

by John Vincent

Traditional performance reviews need to be laid to rest. Active performance management is the way of the future, something we must understand and embrace. A shift from focusing on what is wrong to focusing on what is strong has the potential to radically change how we talk about development. But how do we put it into practice?

Gallup’s report, How Millennials Want to Work and Live, confirms that the majority of the workforce is not energized by or attracted to traditional semiannual or annual performance reviews. They prefer consistent, regular feedback about their performance. Every day there are more millennials and fewer baby boomers in the workplace, and when you combine their need for coaches vs. bosses, purpose vs. paychecks and consistent feedback vs. once- or twice-a-year reviews, it only adds to the urgent need to move away from formalized performance reviews and embrace a flexible, real-time performance management system within organizations.

We know that people who receive strengths-based feedback have a 61% engagement level compared with only 2% being categorized as active disengagement. We also know when a population received no feedback, their engagement rate was 22%, but their active disengagement was 40%. Furthermore, when people strongly agree that someone at work is interested in their development, 90% are engaged compared with less than 1% who are actively disengaged. And this thirst for development is not true only for millennials, but for all generations.

The key to creating a culture of engagement is meaningful, strengths-based development feedback. This doesn’t mean that challenges and areas below acceptable levels of engagement cannot be discussed. In fact, when couched with strength-based solutions, these can be great conversations. We must shift away from activities and move toward results or performance feedback. When we aim our conversations on what needs to be achieved and what is being achieved, as opposed to what activities are complete, we are on our way to effective performance management. As Gallup’s high performance manager model points to, the best feedback is strengths-based, engagement-focused and performance-oriented.

Deloitte, GE, Adobe, Accenture and Goldman Sachs have all shifted to models framed around weekly feedback, with most organizations focusing on strengths and development opportunities, based on targeted performance metrics. Goldman Sachs reports more than 80,000 hours of accumulated administrative tasks surrounded the former model of performance reviews -- reviews that did nothing to improve performance. In a Forbes article, Deloitte reports nearly 2 million hours saved. Forbes reports 58% of CEOs believe their current performance review systems are ineffective.

One of the major changes in performance reviews is increased frequency. The review of the future utilizes software to allow managers and supervisors to quickly and effectively capture key points from daily or weekly “check-ins”. These help managers develop a more accurate picture of employees’ performance. When the time comes for formalized semiannual or annual reviews traditionally used to discuss income and performance, promotions, bonuses or raises can still occur, but they are now based on dozens of touchpoints, not the manager’s memory of what the individual achieved, or based on a case the employee described in hindsight.  

A second significant change is the individualized nature of the performance conversation. CliftonStrengths provides a language for managers to check-in with employees based on their individual talents and unique needs. Great managers are consistently curious about the habits, structure, partnerships and assignments that feed or drain the talents of an employee. If this sort of conversation feels different than the formal performance reviews of the past, it could be due to the fact that our workforce desires less management and more coaching. Consider the role of supervisor to include more developmental guidance and you are well on your way to embracing what people need.

If you look at the benefits in terms of a more consistent (at least weekly), dynamic conversation based on areas of strength, performance and development, you have powerful outcomes. Gallup’s workplace research suggests improvements in engagement lead to lower absenteeism and turnover, increased safety and productivity, higher profitability and improvements with our customers. For those companies also focused on efficiency, the Sachs experience of 80,000 hours of saved administrative time might not be icing on the cake, but rather the whole cake.

It’s time. 

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John Gregory Vincent, Workplace Consultant at Gallup, focuses on high-performance management, behavioral economics, strengths-based leadership, engagement, leading change and performance development. He is an expert in generational differences and how they affect the workplace.

John is a successful entrepreneur, keynote speaker and author. Prior to joining Gallup, he founded and served as the chief talent and learning officer of The Genesis Group LLC, a company specializing in maximizing human capital through engagement. John has delivered many keynote speeches throughout the U.S. on topics such as creating passion in the workplace and learning to live one life. He is the author of UPSIDE: A Guide to Achieving Your Full Potential in Life and is finishing a second book, on holistic wellness, coauthored with his wife, Deb.

A retired Navy Command Master Chief, John received a master’s in business administration with a concentration in management from Grantham University and a bachelor’s degree in human resources from Brenau University. He is a Gallup-Certified Strengths Coach.

John's top five strengths are: Arranger | Learner | Maximizer | Individualization | Futuristic


Brenda Worley said...

Excellent article!

Maureen said...

Great article. Congratulations on this new chapter and a wide audience to share your talents with!

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