Performance Reviews Are Dead - Long Live Performance Reviews

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Transcript of Performance Reviews Are Dead - Long Live Performance Reviews

  • Performance Reviews Are Dead

    Long Live Performance Reviews

  • Angel Med

    inilla

    [email protected] www.proyectalis.com/en/AngelMedinilla

    (Slides, Videos, Newsletter, Books, Blog, LinkedIn, Sketchnotes, Twitter...)

    Twitter: @angel_m (pictures, followers & feedback welcome)

    www.improvement21.com facebook.com/improvement21

    @improvement_21

    We help people and companies create continuous improvement habits

  • My Pleasure! (All drawings by yours trully)

  • More at http://Slideshare.net/proyectalis

    Thesis: Performance Reviews Are Evil

    They punish, humilliate and demotivate employees

    They are actually arbitrary They trigger zero-sum games

    They cost a lot They dont work!!

  • More at http://Slideshare.net/proyectalis

    Fact: We Hate Them!Maybe just a little bit less than yearly budgets and

    firing people...

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    Fact: were getting rid of themNot only fancy companies:

    Deloitte, SAP, Adobe, Accenture, GE...

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    Fact: SAP

    The annual review was dreaded. Managers have anxiety about

    communicating annual rating decisions. The company figures it spent two and a

    half hours of management time prepping for each review -- 200,000

    hours a year -- for "conversation that were very past-focused and layered with the anxiety associated with the rating."

    Jewell Parkinson, human resources chief at SAP North America

    http://www.philly.com/philly/blogs/inq-phillydeals/-SAP-plans-to-end-yearly-performance-reviews.html

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    Fact: AccentureWere done with the famous annual

    performance review, where once a year Im going to share with you what I think about you. That doesnt make any sense.

    [...] We are getting rid of all this comparison with other people.

    Pierre Nanterme, CEO Accenture

    https://www.accenture.com/ma-en/company-accenture-ceo-performance-review

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    Fact: DeloitteDeloitte long knew that their old performance

    management approach neither boosted employee engagement nor high performance.

    Deloitte conducted a public survey to find out what managers thought of performance reviews,

    and 58 percent of managers stated that traditional performance reviews did not serve its purpose.

    [...] It was discovered that the whole performance

    review cycle filling in forms, holding meetings and doing the actual ratings consumed around 2

    million hours a year. Most of this time was apparently spent discussing ratings instead of

    actually talking to employees about their performance.

    http://blog.impraise.com/360-feedback/deloitte-joins-adobe-and-accenture-in-dumping-performance-reviews-360-feedback

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    Thesis: My findings were that bad managers

    needed a strict formal review process in order to consider import

    performance aspects and discuss them with staff. But this did not improve

    their managing or motivational skills, ... it was a weak band-aid. Worse yet, ... Great Managers were wasting

    time filling out review forms to document what was already clear to all

    parties

    Robert Newman, CEO at MiTeGen

    https://www.linkedin.com/pulse/why-ge-giving-up-employee-ratings-abandoning-annual-reviews-immelt

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    Why do we conduct appraisals?

    Increase Performance? Increase Engagement / motivation?

    Salary / Compensation? Feedback?

    Paper Trail?

  • Is it working?

  • Whats the case study?

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    Why do they fail?Command and Control Culture

    Implicit subjectivity / Bias

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    Why do they fail?Complexity & Measuring performance

    Non linearities (ej. Annual Profit) Annual - goal change

    Transfer problem

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    Why do they fail?

    Fear of Feedback Evaluation against others

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    Why do they fail?Zero Sum Games If -> Then rewards

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    Why do they fail?According to Stanford University Professors

    Jeffrey Pfeffer and Robert Sutton, compensation for performance are generally ineffective when tasks are

    complex or require collaboration.

    http://blog.impraise.com/360-feedback/deloitte-joins-adobe-and-accenture-in-dumping-performance-

    reviews-360-feedback

  • More at http://Slideshare.net/proyectalis

    Why do they fail?According to Stanford University Professors

    Jeffrey Pfeffer and Robert Sutton, compensation for performance are generally ineffective when tasks are

    complex or require collaboration.

    http://blog.impraise.com/360-feedback/deloitte-joins-adobe-and-accenture-in-dumping-performance-

    reviews-360-feedback

  • By the way...

    Management by numerical goals is an attempt to manage without

    knowledge of what to do, and in fact is usually managementby fear

    [...] Eliminate numerical quotas, including management by

    Objectives

    W. Edwards Deming Out of the Crisis - 1986

  • What can we do different?Command and Control Problem

    Measurement Problem Feedback / Evaluation Problem

    Salary / Bonus Problem

  • Lets look at great companies!

  • What are they doing differently?

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    The Compensation ProblemStudy science and research!

    Detach Improvement from money - SERIOUSLY: get rid of bonuses and incentives

    Semco 5 salary factors Netflix Salary Policy

    Buffer Open Salaries / Open Equity Jurgen Appelos Salary Formula

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    The C&C ProblemMake it Collaborative

    (only when money is out of the table!) Google OKRs

    Appszoom Peer Review Process Happy Force Employee / Company retrospectives +

    Endorsement system (Kudos)

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    The Measurement problemNot everything that counts can be counted

    Use the Marriage Counseling Metaphor Jurgen Appelos Metrics Ecosystem & Complexity rules

    Google OKRs

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    The Feedback ProblemEliminate Fear

    Focus on Improvement Give feedback

    Receive feedback Ask for feedback

    Make it public

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    As a summary...1) Focus on improvement!

    2) Do not mix improvement, feedback and engagement with compensation

    3) Teach people to give, receive and ask for feedback

    4) Set goals together, bring everyone into the conversation

    5) Make the process continuous

  • Watch for this!

    @lgoncalves1979

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    And remember:It's not extra work...

    ...ITS YOUR ACTUAL JOB!

  • Thank you and... Share it!http://www.proyectalis.com/en/AngelMedinilla

    www.improvement21.com

  • http://creativecommons.org/licenses/by-nc-nd/3.0/

    This presentation is based upon the ideas and work of many people. And while Ive tried to recognize copyrights and give credit and attribution where possible, I cannot possibly list them all, so if you feel like theres something that should be added, changed or removed from this presentation, please drop me an e-mail at [email protected]

    All drawings and materials in this presentation are CC BY-NC-ND by Angel Medinilla. You are free to use them in the terms of this license.