Traditional Performance Reviews are not worth the effort – You can stop beating yourself up now
The PR is so well embedded even in my thinking that I built an entire PR section in Sukuma. But it has been bugging me, badly. It is time to permanently ditch our old way of thinking in relation to PR’s.
If you have employees, then I request another 2-minutes of your day to read the following: you will be paid back a thousand-fold for your time investment.
If you consider the primary objective of the PR, you will likely come to the same conclusion about how effective they really are. In fact, if you are familiar with the ‘above or below the line’ analogy, I consider traditional PRs to be below the line, whereas Development Reviews to be above the line. Refer to the diagram below:
Now, your experience may very well be different to the above, but in my personal experience as an employee, and employer and understanding the experiences from many other business owners, the average situation is not far off this. It is genuinely time to ditch how PRs are managed and there is no need to reinvent a new solution either, it already exists.
Developmental (DR) vz Performance (PR) vz Remuneration (RR) Reviews
I encourage you to adopt the following thinking in relation to your employee reviews.
RRs are there to determine the correct level of remuneration for an employee. Linking your RR to performance should be encouraged but conducting a formal PR or DR at the same time as your RR will lead to a level of unnecessary anxiety and ‘gaming’ of the PR in order that they, the employee, will benefit the most, i.e to not be penalized financially. Your RRs need to be held separately and discussed in the context of their value to the business and what the market considers is normal.
PRs should not be held annually: in fact I would say that as a company, the PRs do not have any set frequency. Rather, PRs should be held at the time of an event or at least within days of an event. These events being good or bad ones, but ensuring that both good and bad reviews are regularly held.
In an earlier NewsBrief, I discussed ScoreCards. These are similar to job descriptions but differ in that they simplify the understanding of what an employee needs to achieve and how they should be showing up at work. ScoreCards and PR are directly interlinked. In fact I would suggest that in most PR meetings that you have, the ScoreCard is present and discussed.
DRs are there, firstly, to ensure that you as an employer are getting the best return on your investment of the employee. Secondly, for the employee, that they are functioning in an environment that best ensures they are engaged, continually improving and are as ‘blockage-free’ as possible in order for them to perform their function. The end game here is that both the employee and the employer enjoy working within the business and both parties benefit financially. Ultimately, the DR is more of a coaching conversation that you should be having on a regular basis (3 to 6-monthly) with your staff.
Your takeaway action points.
1. Create a clear policy that everyone understands in relation to employee remuneration.
Everyone needs to understand how remuneration levels are managed in the business.
2. Create ScoreCards for every employee, including yourself within the business.
These are used to guide performance and to ensure everyone is working on the right things in the business.
3. Conduct Performance Reviews as and when they are required, with a special emphasis on ensuring that these reviews cover off the good and the bad. These should be short and related to the ScoreCard.
4. Conduct employee Development Reviews on a regular basis, ideally every 3 to 6 months.
The DRs are built into Sukuma together with powerful coaching questions to best ensure your employees genuinely build their value on the business.