The simple way to create a high performance culture
I’ve been through exactly one formal annual performance review, and it was enough. It was in my first job, and it was a long and stressful process for me. I was a freshly minted college grad with no “real-world” work experience. And I had no idea if I was killing it, or completely failing, for most of that year.
That first employer was Deloitte – now praised for having scrapping annual reviews altogether in favor of real-time feedback and performance management. Looking back on it now, as stressful as it was for me, I know it was even worse for my manager. I can’t imagine how much time and effort he put into gathering, giving, and following up on thoughtful feedback and advice for everyone at once. My takeaway from that experience? Formal reviews, and having to wait for feedback, is both inefficient and uncomfortable.
From speaking to many people over the years since I know I’m not alone in that analysis. It seems clear that a much better system would focus on:
- Real-time, two-way feedback
- Short goal cycles
- Frequent one on ones with managers
- Ownership of your own development
A recent study by Intelligence Group showed that 72% of millennials would like to be their own bosses at work. And if they have to have a boss, 79% say that they want their bosses to serve as a coach or a mentor – not a manager.
To understand why more frequent, less rigorous feedback cycles make so much more sense, consider a basketball team. Imagine if instead of daily practice, with coaches leading targeted drills, giving feedback, and making changes in real-time, the coaches gave a single post-season written review to players. A review focused only on past performance, not what each player could do to improve in the future. It wouldn't be much of a basketball team. Which is exactly why sports coaching doesn’t work like that.
So, if annual performance reviews are a fundamentally flawed approach, why are so many businesses still relying on them?
Before you rush to answer – especially if you work at a small, tech-focused or more agile company like I do – let’s stop to consider the big picture.
Until last month, I led user experience design at Kindred, an employee experience design consultancy. This meant I worked with businesses all across Asia Pacific in aviation, FMCG, financial services and more to help them design and deliver better experiences for their people.
During my four years working at Kindred, I watched large organizations struggle to adapt quickly to changes. I also saw many employees hurt by disorganized (or worse, nonexistent) change communications and processes.
It’s cliche, but true, that the larger a ship gets, the harder it is to turn around. Companies are no different. Try getting 25,000 people to completely change the way they’ve worked for the past 20 years. Or shift rapidly to a high performance, high expectations culture in the face of crisis.
Turns out, it’s really hard. But what makes it easier are having people who are in frequent communication, understand where you're headed and why, and are engaged enough to buy in.
So, what now?
With annual performance reviews on the way out, there’s tremendous opportunity in the vacuum they leave to make performance management more meaningful. There are clear gains to be made in employee and organizational potential, and people in HR and L&D are embracing new ways and technologies to help people develop.
Let’s revisit Deloitte. Before they cut annual reviews in 2015, they were eating up two million hours of admin time each year. Now, employees have regular check-ins with their managers, complemented with frequent goal setting and performance snapshots instead of ratings. Employees get in-depth feedback year-round, and have ownership over their development. And managers can devote the time they used filling out paperwork, debating ratings and ticking boxes to provide coaching and mentorship.
With each new generation comes massive shifts in work culture, and now is no different. We’re seeing employee tenure grow shorter, younger people who are used to immediate feedback enter the workforce, and employers recognizing the need to onboard and get people to productivity more quickly. Increasingly, people leaders are recognizing that annual performance reviews and formal learning and development aren’t going to help them achieve a high-performance culture.
It’s important for employee experience leaders, especially those trying to attract and retain the best people, to be asking themselves whether their current processes are actually getting the results they want.
How can employers treat their people like a team of all-stars? And if they want to reach peak performance, how do they get the insights they need to create the performance culture they want?
In researching this article, I found references to treating employees like family, partners, professionals, people, owners – even criminals! But I think that’s all misguided. My coworkers are my team. So let’s start treating employees like players, and giving them the feedback and guidance they need to be all stars.