How to Improve Your Annual Review Process

The end of year performance review process is broken but leaders can take 6 steps to change their performance culture and become better leaders in the process.

Today’s post is by Mike Figliuolo, Managing Director of thoughtLEADERS and author of One Piece of Paper(CLICK HERE to get your copy).

Whether you’ve just finished your end-of-year review process or it’s still finishing up, you can resolve to do things better this year in terms of managing performance. This post is probably even more relevant if you’ve recently been through the pain of a grueling review process because I’m sharing some tips on what you can do this year to make next year’s process less painful and more effective.

There’s nothing like returning to work after post-holiday food comas.  The best part is you get to prep for one of the most dysfunctional, time-wasting, intellectually insulting, and leadership-lazy exercises known to mankind: the end of year review.

They’re stupid.  Period.

And before you go all “I don’t need to read this – I’m a business leader and HR people are the ones who do performance management” you need to sit down, shut up, and read because if you have that mindset, you’re a huge part of the problem.

How failed is our leadership culture that we have to sit around and wait for HR or executive management to dictate when and in what form we must critique the people on our teams?

How messed up is it that we have to rely on compulsory forms with rating scales to tell people how they’re doing?

How sad is it that we have to hold cross-calibrations to stack rank people and force a performance distribution because our managers lack the ability to look outside their own organization and assess comparable levels of talent and performance?

We’re a management disaster, people!

I’ve written plenty on the dangers of bad feedback, the importance of self-appraisals, the requirement to fix bad performance before it becomes terrible performance, and how awful butt sandwiches taste.  Add this post to the list of rants about why our performance management systems are broken and what we as leaders need to do to fix them.

If someone works for us for 365 days, we owe them much more than a once-a-year sit-down to discuss their performance.  We owe our organization more than looking at all personnel once every four seasons.  If we truly want to get out of the rut of annual performance reviews being as palatable as beet and Brussels sprout casserole, we have to create a new culture around reviewing performance.  Here’s how we as leaders can do that:

1. WE own the process (not HR): Don’t blame HR for the performance review process being broken.  It’s our fault as leaders if it is.  HR is there to support the business.  If the process is broken, it’s because we allow it to be that way.  Take back the process and ensure it suits the business’ needs (improving our talent, keeping the best talent, moving weak talent to new roles).  We need to quit abdicating responsibility for the process.

2. Feedback happens DAILY: If we get lazy as leaders and rely on an annual process to tell us when to tell our folks how they’re doing, we shouldn’t be surprised if they’re disgruntled, confused, don’t trust us, and quit as soon as a better opportunity comes along.  We need to kick out the crutch of the process “telling us when to give feedback” and take our jobs as leaders seriously.  When something “feedback worthy” happens, have the conversation with your team member right then and there.  The annual review should be nothing more than a summary of all the conversations you’ve had over the course of the year.

3. Get out of the silo: Cross calibrations to ensure we have a distribution of talent across the performance spectrum is a control mechanism to keep those of us living in silos from doing stupid stuff.  We need those cross calibrations because we have no idea how good or bad the talent outside our immediate team is.  We need to get out of our offices and go meet people.  Speaking with other leaders in the organization about their team members builds relationships and helps us understand where our people fit in the broader scheme of things.  If we know that, we can more accurately and fairly rate their performance on a relative basis.

4. We don’t get paid to be liked: We avoid performance appraisals and feedback conversations because we have to tell people unpleasant things about their performance.  Instead of stepping up and delivering the tough messages, we hide behind “well I think you’re the bees knees but the folks in the calibration session rated you lower” or “HR’s performance appraisal process requires me to rate you this way even though I don’t think you’re really as terrible as they make it sound.”  We need to get over it.  Some people won’t like us.  We’re not paid to be liked as leaders.  We have to deliver tough messages.  If we own those messages and deliver them as soon as they’re relevant our teams will perform better and actually trust us more.  We need to understand we aren’t at work to be liked – we’re there to do a job and we get paid the big bucks to have the hard conversations.

5. Pay for performance: We need to quit being cowards and spreading bonuses like peanut butter.  Not all performance is even but we pay people like it is.  Oh sure… we pretend we’re differentiating pay for performance but giving your highest performer a 2% raise and your worst performer 1.5% is a freakin’ joke.  Why not give your high performer 3.5% and the low performer 0%?  Oh, they might not like us, eh?  See point 4 above.  And if you want a fuller perspective on paying for performance, you can read a lot more in detail on that subject in this post.

6. Quit complaining: We need to quit complaining about the problems with the year-end process and do our job as leaders and fix it.  If our performance culture sucks, it’s because we suck.  Culture is nothing more than the sum of all our actions.  If our actions are lame and cowardly, our performance review process will mimic that culture.

Are you going to let your performance review process be a disaster this year or are you going to step up and fix it?  Oh yes… I absolutely just threw down the gauntlet.  Are you up to the challenge?

Mike is the Managing Director for thoughtLEADERS, LLC and a published author, you can find his books and more information about Mike, here.

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