Those blankety-blank performance reviews...arrggg! As the saying goes, there are two sides to every story. That platitude is nowhere more alive than in the arena of performance reviews, at least in management circles. As Professor James Heskett of the Harvard University Business School puts it on his website, "Performance reviews...seem to rank alongside root canal dental work on our list of things we look forward to as managers and employees." Ah you say, that's not two sides! That sounds like universal agreement. Everyone - managers and employees alike - dread performance reviews! So where and what are the two sides of this issue? After all, what's so good about feeling bad?
The short answer is: In value, i.e., value derived or delivered. One side - heavily weighted towards upper management - believes performance reviews deliver value to the company. The other side, the polar opposite - heavily weighted towards (you guessed it) the worker and supplemented by a large contingent of middle managers - thinks the entire exercise is nothing more than a waste of their valuable time.
In two installments, I'll try to capture some salient arguments - pro and con. This issue's piece will take more of a top-down view. The next installment will take a view from the inside-out. That's not a cheeky commentary on the efficacy of such systems. Rather it means we'll hear the perspective of managers in the middle who have to execute such systems (a true silent majority, since most commentators prefer to remain anonymous for the sake of job security).
These little treatises are hardly definitive. The issue is far too nuanced. Nor are these pieces intended to convince, merely to provoke thought and possibly offer some angles you may be underselling or discounting. Let's put it this way: Devoting further thought to your company's performance-review process is either advisable or prescriptive any time. Once-and-done is a flawed but widespread model in performance rating systems. As one middle manager who demands to remain anonymous (naturally) told me, "There's no such thing as a performance-review process that cannot be radically improved." So keep an open mind. You might gain a bit more wisdom and insight and fill in one or two of those blanks in your own mind on the whole blankety-blank issue of performance reviews.
Bob Handwerk has worked many places around the globe - in the Mid East, the Netherlands, Poland, the US, Saudi Arabia. Among other things, he has been a corporate recruiter, a Human Relations consultant, an Employee Relations expert, and a member of a corporate think-tank. Currently he heads RLH Associates, LLC, a Wisconsin-based consulting firm that serves a client base throughout the US and Western Europe. He is, and has long been, deeply involved in the design, implementation, and tweaking of performance-review systems for a few decades.
When asked if performance reviews work or not, he replies that they can work if and only if (yes, think the old "iff" standard of mathematical lexicon):
Every employee goal is tied into the company's strategic plan.
The goals of each individual are tied into what he or she is supposed to be doing by job description.
Everyone's goals tie into the core competencies of both the company and the individual.
In keeping with the KISS principle (Keep It Simple, Stupid), I'll prematurely stop Mr. Handwerk's list here. Satisfying these three conditions proves anything but simple in the typical organization. Achieving that kind of understanding, clarity and coordination up and down the organization poses a formidable logistical challenge. "Bigness" amplifies the challenge.
Handwerk's list screams for honest communications and fundamental organizational coordination. Anything less can amount to enormous waste. I'll cite an example from my own practice.
Incompetence with Core Competence
I was involved with a re-engineering effort with an energy-utility company. The main thrust of the project was to identify the company's core competencies and develop a comprehensive strategic plan and direction. The outcomes would determine what businesses and activities the company should keep and which ones should be shed. One major outcome called for the company to shed its gas and electric appliance-servicing operations in toto - and to do so quickly. The company's huge appliance-repair department had been created at the turn of the twentieth century. In that era, the department served a vital promotional purpose. People of that epoch did not have their homes wired for electric or piped for natural gas. Gas and electric service was a novelty, not a "necessity." Thanks to the security afforded by the company's repair service, many a homeowner signed up for gas and electric service. Those days had long since vanished. Customers no longer needed convincing and the company's repair business had become a huge money drain. The cost of warehousing parts, stocking trucks, training service people, retaining personnel, handling customer complaints, work-managing an appliance-repair business, etc. was not one of the company's core competencies and fell far outside its core business. The company's competencies resided in generating electricity and transporting and distributing gas.
Unfortunately and inexplicably, the appliance-servicing department did not "get the memo," as the current business vernacular goes. The repair department budgeted and spent millions to grow their business. Meanwhile the company's strategic plan called to terminate appliance repair. When the twain eventually met - or more accurately crashed, the cost was monumental in terms of wasted advertising, employee backlash, and customer confusion ("You just sent me a brochure saying you were expanding your services - now you're telling me you're getting out of the business!"). The whole episode was a clear violation of Handwerk's first principle above. The appliance repair department's goals were diametrically opposed to the corporation's strategic plan.
"Here's an important caveat to all performance-review systems," Robert Handwerk adds, "One size does not fit all. In other words, the same review form will not work for administration, manufacturing, sales, etc. There has to be recognition and sensitivity to inherent differences between jobs and responsibilities."
Handwerk continues: "Managers hate to do two things: fire people and give performance reviews. Handled improperly, both these tasks can cause workplace disruption yet the company's health requires both, unpleasant though they might be. How to fire an employee is a discussion for a different day, but giving performance reviews is necessary because a company's success hinges on the performance of its employees. I subscribe to what Jim Collins advocates in his management book, 'Good to Great.' Collins makes the case that the old saying that 'Employees are a company's most important asset' is incorrect. His belief is that 'Employees are a company's only asset.'"
Scaring the Hell Out of the Staff
Keith Hamm, a Human Resource specialist currently working for the Minnesota Valley Action Council, echoes Handwerks' sentiments for the most part. When asked if performance reviews achieve their intended purpose, he replies cheekily, "If the purpose is to scare the hell out of the staff, yes!"
As a frontline human resource professional, Keith Hamm's perspective on performance reviews tends to be bottom-up while a consultant's tends to be top-down. The rub lies in moderating the two perspectives. From the reviewee's perspective, Hamm observes: "Culturally in the US, performance reviews start off on the wrong foot. When we're in school in our formative years, whenever we're called into the principal's office, it means we're in trouble. Those emotions are imbedded in us. So that's a recommendation I can make immediately. Hold the performance review on neutral territory, not in the boss's office. Better yet, hold it on the employee's own turf.
"The most damaging disconnect I see in performance reviews is lack of follow-up. You can't do something that modifies behavior once a year with no follow-up, milestones, check points, and the like. The reality is that doing them properly requires overcoming formidable constraints. It's difficult if not impossible to give performance reviews the relevance they require. In our organization for instance, our employees are spread all over the state. Our supervisors are busy all the time. Their daily responsibilities afford little chance to meet with their direct reports face to face on a regular basis. Those kinds of parameters set performance review systems up for failure. By design, supervisors and direct-reports are supposed to meet at regular intervals to discuss performance, progress, problems, shortfalls, achievements, expectations, etc. But keeping to the schedule becomes a nightmare. The natural tendency is to put those particular meetings off. It's an unpleasant or uncomfortable exercise. But postponing and blowing off these reviews sends the employee a message like: 'It's not important to my boss, so why should I take it seriously.' Nonetheless a properly designed, functional system demands joint responsibility between the supervisor and employee. When performance review appointments are due, the employee should be calling the supervisor to reschedule. That simply doesn't happen, so the system doesn't deliver value.
"We're all wired to look for a family structure where we work. It's part of our culture. Subconsciously workers look around in their work setting to identify and establish familiar relationships, which are tantamount to familial relationships. The company president is analogous to the parent. The supervisor is perhaps somewhat like a big brother or sister. Employees often even identify a 'mom' figure - the person in the organization who is usually more compliant or empathetic to their concerns than the other parent figure. They'll look to that person to intercede on their behalf when they're at an impasse with the other. I place a lot of credence in what Daniel Goleman advocates in his book "Emotional Intelligence." In essence, some people can 'read' other people. Some cannot. Some managers can read the emotions of others and tailor their messages so receivers 'hear' it. They can recognize and overcome the emotional noise that otherwise prevents the message from getting through. To a great extent, that kind of emotional intelligence is at the heart of an effective performance review."
Both Robert Handwerk and Keith Hamm acknowledge the pitfalls of poorly executed or simply perfunctory performance rating systems. Each however firmly believes that rating performance is essential to the lifeblood of the organization. The rub is that performance reviews tend to be downers - and what's so good about feeling bad? Next time, we'll hear from a group that answers, "Nothing!" to that question. We'll give voice to some contrarians to the system - American middle managers - the frontline soldiers who execute these systems and write these reviews. Or, as the managers refer to them, these blankety blank performance reviews.
© Capital ME 2007
