Performance Reviews Are Dead - Long Live Performance Reviews

44
Performance Reviews Are Dead Long Live Performance Reviews

Transcript of Performance Reviews Are Dead - Long Live Performance Reviews

Performance Reviews Are Dead

Long Live Performance Reviews

Angel Medinilla

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

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

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

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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 don’t work!!

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

firing people...

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Fact: we’re 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: AccentureWe’re done with the famous annual

performance review, where once a year I’m going to share with you what I think about you. That doesn’t 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?

What’s 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

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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

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

Let’s 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 Appelo’s Salary Formula

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The C&C ProblemMake it Collaborative

(only when money is out of the table!) Google OKR’s

Appszoom Peer Review Process Happy Force Employee / Company retrospectives +

Endorsement system (Kudos)

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The Measurement problem“Not everything that counts can be counted”

Use the Marriage Counseling Metaphor Jurgen Appelo’s Metrics Ecosystem & Complexity rules

Google OKR’s

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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...

...IT’S YOUR ACTUAL JOB!

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

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