You set goals at the start of the year, fill in a form of some kind, review results twelve months later, have a chat, a rating, and a pay rise. What a broken system…
WHAT’S WRONG WITH ANNUAL REVIEWS?
1. They happen once a year. Yes, it’s a tautology. But I really don’t know why annual is an appropriate frequency to manage performance, other than to keep HR clear to do other stuff eleven months in a year. It’s a horizon most people can’t wrap their heads around – it’s just too far away.
2. They are static. Why is it right to be doing in October what I said I’d be doing back in January? Annual reviews hardly take change in marketplace conditions into account, or new ideas, and become increasingly disconnected with real-time action as the year goes – not much space for agility.
3. They are scary . They happen rarely, with all sorts of official rituals, and they have a major influence on career and compensation. Managing your performance and development is designed to be intimidating… why is that?
4. They are boring . I want my work to make a difference. I want an adventure to inspire me to do my best, I want a mountain to climb. No such thing in APRs, it’s just paperwork and to do lists, move along…
5. They are sandbagged. Unless you’re a newborn, masochist or come from another planet, you’ll know that “under-promise and over-deliver” is the only winning strategy. Reviews are not designed to set big hairy ambitious goals.
6. They are linked to pay. OK, there has to be a fair mechanism to manage pay. But money is not what gets people to wake up every day, inspired to do amazing work – so why is the main mechanic to manage employee performance still driven by the needs of a compensation process?
7. They are individualistic. Set individually, poorly aligned in most cases, they don’t give enough incentives to work as teams. Worse yet, you’re not supposed to share your review with your peers and co-workers, which makes sure no-one really knows what your super-powers are, or how they can help you improve.
8. They are simultaneous. Sorry, but evaluating everybody at the same time is not how you can do a great job developing each person. It just isn’t.
9. They are manual. I live in a world where I can get 10 metrics on our online influence, set google alerts, and use my iPhone as a visual universal translator… why do I still have to type in all targets and results myself in a word document or web form?
10. They are bell-curved. Bell-curving means you get a better rating if you’re just good in an average team, than if you’re outstanding in an outstanding team. Talk about a counter-incentive system there!
Don’t you find it mind-blowing that such a weak, un-motivating system still exists?
HERE’S WHAT I WOULD DO INSTEAD.
I would learn from everything I love about gaming, and how RPGs put players in charge of their character’s growth path, working hard on missions of increased difficulty, choosing how to upgrade their competencies, collaborating with others in quest parties and guilds… even motivating them to do menial repetitive labor like grinding foes, mining or even fishing.
And I would turn Performance Reviews into the best game you’ve ever played – something you’d actually want to engage in, every day, to perform better, and grow.
I would make it Real-Time and Mission based. Forget annual, this system would be live and keep track of progress every day. Every project would be a like mission that deserves its own evaluation. Every success would count towards critical job experience points (CJEX), eventually triggering access to higher levels of pay and more complex job missions. Failure would not be permanently scaring, but rather would identify immediate areas of improvement and learnings.
I would make it about Learning and Flow. CJEX would build up a number of on-the-job-learning competencies. The higher you’d rise, the more challenging it would become to earn CJEX, but the difficulty would always be right for your level. Volunteer-based special projects would offer opportunities to take on challenges above and beyond every-day responsibilities. Employees would gain access to training credits, which they would allocate on the competencies that matter to them. Strong incentives would exist to promote beyond-the-job development – such as bonus pay for learning a new language, reading relevant business books, keeping up with your consumers on twitter and blogs, and sharing what you’ve learned.
I would make it Integrated. Performance management would be embedded in everyday business tools, such as email or instant messaging that allows you to send kudos points, or innovation stage-gate processes where employee contributions are identified and tracked. Sentiment analysis and online behavioral metrics would also help qualify everyone’s level of influence, collaboration and leadership style, and offer actionable feedback through a personal dashboard.
I would make it Social. Performance management would not be individual and secret, it would be part of a social network at the intersection of LinkedIn and Foursquare. Your current objectives would be posted on your profile, together with requests for help from colleagues. Collaboration would be a significant way to earn CJEX, and would be recognized by kudos points handed out by the peers you supported, rather than by your boss. Success would be recognized by unlocked trophies (like Foursquare), recognizing individual or team achievements, both in the short and long term. Your profile would also display your “special powers” (talents, skills, competencies) so team leaders can pick you for missions that could benefit from your expertise – rather than through heavier people planning processes.
I would make it Fun. Finally, I would design the system in a way that promotes work life balance, socialization and play, to create an inclusive and strong team culture!
Sorry, I’m not in Human Resources, so it’s unlikely to happen very soon.
But I’d still love to hear your thoughts, and make such a system happen someday!!