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Catherine Schmidt, SHRM-CP, PHR

Annual Performance

Review

Rethinking Reviews

• Why we need to

• Revamping the process

• What might it look like once we change?

• How to make it happen

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Growth Over Time

If you were to give your organization a “grade”

based on its overall effectiveness with

performance management, what grade

would you give?

SHRM/NCMM: Perceptions About Performance Management Effectiveness ©SHRM 2014

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Audience Poll – Stand Up If…

Your organization uses numerical ratings or descriptive ratings (meets/exceeds expectations).

Your organization doesn’t have performance reviews.

Your organization has narrative reviews (no ratings).

Your organization uses 360 reviews or something else (peer to peer, self review etc.)

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Why Do We Review?

Our Intentions

Provide Feedback

Set Pay

Create & Measure

Goals

Legal Documentation

Coach & Mentor

Get Improvements

Develop and

Advance

We Assume:

Reviews are objective & reliable.

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4%

2%

34%

30%

19%

22%

38%

43%

4%

3%

0% 20% 40% 60% 80% 100%

Managers in my organization are willing to “make the tough calls”* as appropriate

 Managers in my organization do an effective job of differentiatingbetween poor, average and strong performers

Strongly disagree Disagree Neither disagree nor agree Agree Strongly agree

98% think they fall in top 50%

of all performers

59% disagreed w/ any rating

that wasn’t the highest on the

scale

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We Assume:

Reviews are objective & reliable.

1 kind of review fits all employee coaching/feedback needs.

We Assume:

Reviews are objective & reliable.

1 kind of review fits all employee coaching/feedback needs.

Feedback and performance development are annual/quarterly events.

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2%

72%

16%

3%

0%

2%

0%

0%

1%

3%

Every other year or less frequently

Annually

Semi‐annually (twice a year)

Quarterly

Monthly

As needed (e.g., when individual performance problems…

By request of employee or his/her supervisor

Ad hoc

Other

My organization does not conduct formal employee…

SHRM/NCMM: Perceptions About Performance Management Effectiveness ©SHRM 2014

We Assume:

Reviews are objective & reliable.

1 kind of review fits all employee coaching/feedback needs.

Feedback and performance development are annual/quarterly events.

People need extrinsic rewards to be motivated & committed.

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The answer to the question managers so often ask of

behavioral scientists "How do you motivate people?"

is, "You don't."

Switching Gears …

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Change to Improve

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2012 2014 2016

% of Fortune 1000 Companies Ditching Ratings

Corporate Executive Board (CEB) survey of Fortune 1,000 companies.

Case Study

Got Rid of Ratings in 2012

• Ranked on a scale of 1 – 4 = “soul-crushing exercise”

• Spike of voluntary turnover after review time each year –many were good employees

• Pitted person against person in – what was supposed to be – a team oriented environment

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Case Study

New System

• More frequent, informal meetings at least every other month

• “Check In” process: are employees performing against objectives? What resources do they need to succeed? FUTURE FOCUSED.

• HR is not “police” – surveys annually to learn successes/failures of the process.

Case Study

Results

• Estimated time savings 80,000 hours/year (40 full time positions)

• Voluntary turnover decreased by 25% in first 2 years

• “Notable increase” of involuntary departures

• Increase in managers who were open to employee feedback

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Change to Improve

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Case Study

New Thought: People want to come to work & contribute

• Removed performance reviews for “employee-led development initiatives”.

• Organization-wide training (NOT just supervisors) on merits of various tools, coaching, development options

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Case Study

85% Employee Satisfaction with the Change

• Tools offered:• Collaborative team meeting skills for effective discussions• A 1:1 worksheet for employee/supervisor to identify desired goals• Position competency matrixes• Department work grids w/ goals & priorities identified• Performance improvement plans (PIP) for corrective action

The Difference: None were required or kept in personnel files (except PIP)

Ongoing Feedback = More Improvement

Informal Conversation or Use of System

• BetterWorks• BambooHR• Voyager• Reflektive• Impraise• Workday• 15Five (Employee Feedback)

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Case Study

From Firing Bottom 10% to PD @ GE

• Instant performance feedback 24 hrs./day

• App available for phones or other devices

• Concrete list of short-term “priorities”

• Managers are expected to hold frequent “touchpoint” discussions

Case Study

How it Works:

• Employees can give &/or request “insights” at any time from anyone

• Feedback is focused on improvement – categorized into either: Continue to do something (good)Consider changing something (opportunity for improvement)

• Annual meetings are for coaching towards individual career goals

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The Weekly Meeting

A 10-Minute Conversation:

• What was accomplished this week towards short/long term goals?

• How did the week go for you? Any challenges I can help with?

• Are there any projects/professional development opportunities you want to be a part of?

• I noticed that you contributed by doing XYZ – THANK YOU!

Annual Meetings

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The Annual Meeting

A “Re-Recruiting” or Stay Interview:

• What are the tools needed to complete?

• Identify “regrettable turnover”

• Develop personalized retention plans

• Stay in touch – follow up

To Re-Recruit, Ask:

• Are you doing the best/most challenging/most fulfilling work of your life? If not – how can we help you get there?

• Do you feel that your work makes a difference?

• Do you feel valuable and recognized?

• What do you like best about your work? What would you like more of?

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To Re-Recruit, Ask:• Are you getting enough professional development opportunities?

• Is there anything the organization can do differently to support you?

• Are there any projects at work you want to contribute to or innovate?

• Are you happy with your benefits – specifically any work flex arrangements?

• What could you do to be more engaged?

How to get there:

• Feedback / Feedforward

• Compensation

• The Platinum Rule

• What tools will be used

• How to re-recruit

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Putting it all Together:• Traditional, annual performance appraisals are flawed:

o Assume they can fit multiple functionso Are biasedo Are ”1 size fits all”o Treat feedback as events

• To improve:o Remove ratingso Allow more than 1 wayo Trust managers & employeeso Switch to ongoing feedback

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Thank You!