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The End of Performance Appraisals

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The End of Performance Appraisals

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Good post here on Forbes.com from analyst Josh Bersin on companies abandoning performance reviews.  We agree with Bersin.  Something big IS going on, and the performance appraisal process is changing.

Check out these “new keys to success”:

A really good read. Original post is HERE

  • Develop a “feedback-rich” culture and set of tools (often online, sometimes formal, often informal) that encourages all employees to give each other feedback. Tools from companies like Achievers, Globoforce, and most HR software vendors now enable and make this easy.
  • Separate the discussions about performance from discussions about potential and future career plans. Yes we need to evaluate people when raise time comes, but that can be a totally different conversation from.
  • Talk about performance regularly and let employees create their own goals on a regular basis. Force managers to provide ongoing feedback and teach them how to have honest conversations.
  • Assume that employees already know something about their own performance, and force them to self-assess. People tend to have a good idea of their own strengths and weaknesses – give them an open and positive opportunity to share it. That starts the dialogue about expectations and the match between their self-assessment and that of the organization.
  • Enable managers to assess performance regularly. Software teams now use Agile tools which evaluate code on a weekly basis. Managers should be giving people feedback regularly. If they learn to do this on a regular basis it will get easier and employees will learn to appreciate it.
  • Focus managers on hiring the best, so they build a team which strives for 100% high performers. This is never possible of course, but rather than assuming that 20% of your employees will perform poorly, spend more time on assessment, culture, and fit to make sure very few low performers make it into the organization in the first place.
  • Remember that everyone wants to succeed.  If they aren’t performing well it’s not necessarily their fault – the organization should take responsibility for helping them find a better fit if possible.
  • Set and reset goals frequently. Companies that set performance goals quarterly generate 31% greater returns from their performance process than those who do it annually, and those who do it monthly get even better results. This means employees get feedback on a continuous basis (most sales organizations work this way). Read our research for more details.
  • Beware of pay for performance plans. While many companies (particularly investment banking, sales) have large pay for performance plans, research showsthat these can create perverse behavior. People focus on their own goals at the expense of the organization. In sales related roles this process works well – when you move to customer service, engineering, and other “builder” roles they can create problems.
  • Give your leaders a cultural framework and set of values to work from. Companies like Juniper and Deckers (Uggs shoes) focus very heavily on corporate values, forcing managers to hire and manage to these values. This makes selection easier and enables us to evaluate and coach people against higher level frameworks.
  • Invest in leadership development. Being a manager is a tough job. Managers at all levels struggle with selection, hiring, training, coaching, and evaluation. Give them time and tools to learn, a framework for feedback, and a continuous development process so they learn how to become better.
  • Reward talent “production” not talent “hoarding.” If you pay your managers to “produce output,” they will focus heavily on talent performance and evaluation. This may be a good thing, but ultimately companies thrive by building skills – so in addition to encouraging managers to produce good work, incent them to produce good talent as well.

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