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The employee performance review, that indispensable activity of the 20th century, is losing prestige as companies take a hard look at the results. Although considered a vital measure of employee productivity, most performance reviews are based on good intentions and false assumptions. A recent survey of 1,149 employees in 79 companies revealed "lack of employee involvement,'' "focusing on the negative," and "no follow-up" as major frustrations with current employee review systems. What dooms an employee review system? Let us look at the most prevalent types--the Critique review, the Report Card, and the Goal-Setting method--and discuss their major flaws. Then, we will look at another process--"a professional growth plan"--a system of mutual goal-setting that grew out of the mistakes of the other reviews. We will see how its techniques result in increased profits, employee productivity, and morale. No employee input The Critique performance review is generally unstructured. The reviewer defines an employee's strengths and weaknesses by composing a long, analytical paragraph. This system has problems. It requires the reviewer to write a grammatically correct, meaningful statement to accurately describe employee performance. This task may cause a reviewer to feel uncomfortable or ill-equipped. Often the focus is on the clarity of the supervisor's writing rather than the key issue of employee performance. Supervisors with the best writing ability may appear to achieve the highest performance from employees--though this may not be borne out by the facts. The form of the review becomes more important than the content. The Critique system does not provide for employee input. How can a review support meaningful development of an employee's strengths in a positive and productive fashion without the employee's feedback and buy-in? Finally, since the input is one-way (reviewer to employee), the' Critique performance review places the reviewer in a judgmental and parental position. Fostering this relationship has a demoralizing effect on the employee. 'Grading' tactics The Report Card performance review is more structured than the Critique system. The reviewer rates employee performance in a number of key areas---communication, promptness, quality and quantity of work, ability to delegate tasks, willingness to assume more responsibility, and so forth. Although it does not require written analysis of the employee, the Report Card still represents one-way communication (reviewer to employee) that again sets up a judgmental, nonproductive situation. In some respects the Report Card is more destructive. The ratings, whether based on a numerical ranking (such as one to five) or a word-specific marking ("unsatisfactory'' through "excellent"), give the illusion of objectivity. In truth, these ratings are as subjective as any other system. A low score in any area can destroy employee confidence and incentive. Like the Critique review, the Report Card does not include setting goals. Managers with impartial judgments are rare. A manager with a spontaneous personality may be overly critical of a naturally analytical employee. An analytical manager, on the other hand, may view creative employees as too spontaneous and impulsive. Employees, while appearing to accept and appreciate criticism, often see through the manager's bias. Less than ten in one hundred employees internalize the criticism or see any need for improvement. In his teachings, the late W. Edwards Deming, guru of the Total Quality Management movement and author of Out of Crisis, urged elimination of the Critique and Report Card styles of review. One-way goal setting Goal-Setting performance reviews are a result of changes most systems underwent in the 1970's and 80's. Modern management books and training courses emphasize this method because it adds goal-setting steps and combines elements of the Critique and Report Card versions. The American Management Associations' management courses, McGraw Hill's Training performance review film, Tom Peters in his books and newspaper columns, the Learning International courses on Interpersonal Management Skills, and other influential sources advise the employee and manager to set goals together. Thus, according to widespread professional agreement, the Goal-Setting method is the best to date. If that is so, then why do companies report that it does not work? First, goal-setting is often an uncomfortable process. Whenever the subject is mentioned, most people get glassy-eyed. Employees and supervisors must have guidance in goal-setting, and with the current Goal-Setting method, more often than not, there is none available. Thus, goals are often not specific, measurable, realistic, or meaningful. However, let us say the goals are specific, measurable, attainable, realistic, and have an established date for completion. One-way goal-setting, with the manager or supervisor dictating two or three areas in which the employee is to improve is ineffective for several reasons. If the employee has not participated in the goal selection process, there is less motivation to reach the goals. Also, goals set from above reflect perceptions not necessarily accurate or shared by the employee. The one-way goal setting ignores the fact that the manager's role makes an impact on the effectiveness of employee performance. If the goal-setting process is not shared, the employee will establish goals that are perhaps far different from the company's goals. This is further suggested by the fact, based on 25 years of experience in the manufacturing and high-tech industries, that managers and employees are seldom aware of the important and crucial items expected of them by the other. Nearly 75% of the time, the two people involved are not aligned to work in a mutually understood direction. A better approach In developing a performance review that simultaneously increases morale and productivity, the idea is to remove the negatives from other systems and replace them with positives. The review should include basic objectives: improve profitability, improve the working relationship between employee and supervisor, and increase employee satisfaction. A "professional growth plan" incorporates these concepts, and the performance review now proceeds with three simple steps:
Separately, employee and reviewer complete a pre-review form before the review meeting. Each rates various job skills in terms of importance as they directly relate to the employee's specific job description. At the review meeting, they discuss their views regarding the relative importance of each skill in the employee's job. It is critical that the employee and reviewer eventually agree on the relative importance. Low morale develops when an employee spends energy on a skill believed to be the crucial for advancement and later finds a fellow employee gets the promotion by concentrating on another skill area. The first employee may have gladly concentrated on the desired skill had it been known it was most important. Everyone benefits with a professional growth plan in which both participants assign priorities to job skills and discuss the results.
In this step, pre-review forms offer another list of job-related skills. Before the meeting, both the reviewer and the employee indicate areas where each feels the employee is strong. Many reviewers feel that the purpose of goals is to eliminate an employee's weakness. However, Peter Drucker, the first of the management philosophers and analytical business futurists, stated that it is better to build on employee strengths. Furthermore, goals must reflect adequate employee input to elicit the employee's commitment to company goals. Xerox Learning Systems once surveyed different types of employees and asked what motivated them to do a good job. Not surprisingly, the overwhelming majority said "recognition"--a result that reinforces the Herzberg and Hawthorne study of the 1940s. If recognition is built firmly into the review, it will surely occur. The key, therefore, is to emphasize the employee's strengths rather than to be judgmental and critical. In a professional growth plan there is no direct discussion of the employee's human frailties. Employee shortcomings are, instead, addressed as an improvement-needed issue in Step 3.
In a professional growth plan, the reviewer and employee function as equals. Specifically, each comes to the review meeting prepared to tell the other the number one thing the other could do to make their own job more productive. Some managers and supervisors say, "But, we don't have equal roles. I'm the boss." That may be so. However, we are talking about increasing productivity. What makes employees productive? The key is participatory management and seeking real, and meaningful, input from employees. Productivity is tightly linked to conscious attempts on the part of management to support employees having what they need to do their jobs. The secret here is to have the employees determine their own needs, and never to think that the manager knows better than the employee what the employee needs. For example, at the meeting the reviewer might suggest to the employee, "I can be more effective at my job if you are here by 7:30 every morning to plan the day." The employee, in turn, might say: "I would feel empowered in completing my responsibilities if you would offer weekly feedback on the accuracy of my numbers.'' At this point, both the reviewer and employee make three brief statements, beginning with an action verb, to describe how the other could meet their request. The reviewer might say "(1) Meet briefly with me each morning at 7:30 to (2) give me details about the day's production schedule and (3) to ask for specific support from me so you can meet your daily goals." Rather than dwelling on lateness as a weakness (a negative), the supervisor stresses on-time arrival (a positive) and how that can lead to more support and better performance. This reinforces the desired behavior. The employee, in turn, could confidently ask the reviewer to "(1) To meet with me each Monday morning (2) to tell me what your expectations are for the week and, (3) if necessary, explain or show me how to perform the work to your standards.'' The employee asked for assistance and let the reviewer know about the employee's commitment to on-time, quality work. Both the reviewer and the employee must state specifically what the original request means. You can see that an employee who wants "better communication" must define if that means clearer oral instructions, more frequent written instructions, or just saying "hello" in the morning. The goals must be defined precisely. Then, each describes what it would look like if their goal was met. This forces the employee and reviewer to be more specific and concrete. Receiving daily memos, holding frequent meetings, or being treated with respect could be how "better communication" would look to some employees. A case in point When managers at a high-tech manufacturing company--conscious of the importance of performance reviews but generally reluctant to be confrontive--adopted a professional growth plan, they agreed to an experimental practice review between two top executives. George, the president, and Dave, the vice-president, worked together for twelve years and thought they had a good rapport. During the review, however, they were startled to discover what each really wanted the most from the other. Using a pre-review form before their meeting, George's primary request was that Dave submit monthly cost accounting forms on time. Dave was very surprised to learn that this was the president's top priority. Next, Dave wrote what he wanted most from George was for George to follow the chain of command. He said that when the president dealt directly with supervisors in the plant, it interfered with Dave's authority and made his job difficult. George, surprised to hear his vice-president's number one item, thought he was helping Dave by solving these supervisory-level issues. After each agreed to the other's goals, they set a specific date and used a system to measure results. A week later, in reviews and similar goal-setting sessions with his employees, Dave stressed the importance of submitting the cost-accounting sheets on time. This review process cascaded down to the assembly line positions. The results? After applying this system, they went from 58 to 45 assembly line hours per ton of product. When two people are willing to address the real issue and speak their true requests to one another, everyone wins--the company and each individual employee. Clear results A clear result is the essence of a professional growth plan type of performance review. Needless to say, many of its philosophies run counter to current management habits and belief systems. In the end, the facts speak for themselves. Astonishing results appear as lower turnover and higher productivity. A financial institution reported going from $20 million to $133 million in assets during six-years of using a professional growth plan. This plan is a collaboration of experience. It was conceived when Xerox Learning Systems spent millions of dollars to research, develop, and launch a mutual goal-setting performance review system. While not the answer to every organizational employee relations problem, this process, now contained within The High Performance Management System, is a powerful step in the right direction. The system gives equal attention to employee needs and company goals. It encourages workers to perform as responsible contributors to their coworkers, departments, and organizations. The High Performance Management System is the beginning of the era of wiser management, a more motivated and productive workforce, and a more aligned and profitable organization. (NOTE: Allies Consulting offers a performance review program developed and refined by Dr. Riley and other Allies Consultants, called the High Performance Management System. This program is the process defined in the article above. It delivers profound improvements in individual and organizational performance, like all the programs Allies Consulting offers: increased productivity, profits, retention, morale, quality, communication, teamwork, and more. Our menu of programs will meet or exceed your expectations: they are designed to deliver real results. They can help you become masterful at your performance skills, or your staff to do so. They also leverage our other programs, magnifying your ROI!)
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Focus on skills most important to the employee's
job