Three Arguments Against Performance Reviews

sb-2015-blog-top-10I don’t like performance reviews. I never liked giving them, and I never liked getting them. They are like school report cards, only less well-meaning and more poorly formed. They make the workplace more political, needlessly enforcing nerve-wracking centers of power. They serve a legal function much more than a creative function. They don’t make products better and they don’t serve customer needs. They are obligatory, perfunctory, dreaded time sucks for both giver and receiver, putting a check mark in an annual rite of passage that is largely ignored until the Earth completes another full orbit around the Sun.

On the other hand, I love feedback—really good, thoughtful, useful, timely, focused feedback. I love to give it and I love to get it as part of a regular routine.  No check boxes, no check marks. Feedback, sometimes known as coaching, requires relevant substance to have impact. It needs to center on step by step improvement in how an individual is doing against goals, how a team is advancing by virtue of an individual’s progress, how innovation is being served by attitudes and decisions on a daily basis, and how an individual’s achievements are translated into outcomes valued by an employer.

I don’t believe anyone can effectively coach, empower, and bolster an individual’s workplace contributions sitting down once a year and filtering a list of positive and negative attributes. The best you can hope for is polite-speak that doesn’t upset anyone too much—unless you are marching someone to the door—and the worst you can muster is demoralization that shuts down all future hope of trust and collaboration.

Here are three thumbnail cases against performance reviews that you should find terrifying.

Argument 1: Performance reviews can put off for up to a year what needs attention now

Performance reviews can be a passive-aggressive haven for managers afraid to lead in the present. You know something wrong is happening, and you know it’s going to be uncomfortable to deal with it. Rather than do the right thing and jump on a concern in real-time, you kick the can, deluding yourself into believing there is a chance the issue will sort itself out. While it’s not sorting itself out, considerable damage is being done. You tell yourself if the individual doing wrong doesn’t figure it out by the next performance review cycle, you will deal with it then. This is pain avoidance up the ladder at the cost of pain induction everywhere else. It’s not leadership. It’s cowardice.

Instead of keeping notes for the big annual summation of all that has gone wrong, how about a simple human conversation today around what is and isn’t working for an employee. Start with an easy question: “How are things going?” If you don’t like the answer, offer your own opinion. Start a dialogue. Make it specific, give-and-take, and optimistic in nature. Do not catalog a set of ills. Begin with previously discussed goals and work forward from those to observations and measurements. Instead of feeling evaluated, an employee is likely to feel directed, supported, and knowledgeable about where he or she stands.

There is no greater fear in an employee than worrying about what the boss thinks. There is no confidence greater than knowing the truth of that opinion right now, while there is still time to do something about it.

Argument 2: Performance reviews are largely clueless  on the value of failure

Imagine this scenario: You are an executive with significant profit and loss responsibility. One of your most promising managers has just led a two-year late-to-market death march on a brand extension that has launched and failed. The team that worked on this product is angry and exhausted. Boatloads of resources, including millions of dollars of investment capital, have gone up in smoke. You have lost market share, customer service complaints are up, and your own boss is pissed off.

In most corporations, you can guess the review would be harsh. There would have to be accountability for the downside, the losses, the ceding of momentum. In the event you chose not to put the manager on a “performance improvement plan” (which both you and the employee know is a scripted formality), the mandated gravitas of your critique might get you the intended outcome—the employee’s resignation. If the employee doesn’t resign, what are the real chances he or she will bounce back and give their all on the next go around? Aren’t they more likely to tread water until they find a way to navigate to a new job elsewhere?

Here’s the problem with this exit: Your employee takes all the learning from the failure directly to your competitor. You have funded the education of your competition and put yourself further behind the curve by virtue of the reprimand. You got what you wanted, except you didn’t. A performance review codifies failure “for the record” as historical documentation of the negative case, and even where it might allude to the notion that learning has occurred, there’s something about those pieces of paper in our “permanent file” that never sits quite right with us. Talk with me as colleague, make me believe you embrace “mi fracaso es su fracaso,” and together we’ll put this learning to work. Mold my upside down experiment into a tombstone and you can forever bury me and all that might someday come of it.

Argument 3: Performance reviews require a level of mentoring expertise few managers ever master

It’s really hard to explain to someone how they can learn from mistakes and get better at what they do. I’m not saying it’s a little hard. It is one of the hardest things any of us are ever asked to do in a job function. Each time we blow it, we never get a chance to repair the enormous damage we create on top of whatever relatively minor damage has already been done. A career is a terrible thing to waste, yours or mine. Do you really feel up to the right to objectively assess where I’ve gone off the rails?

We need to be extraordinarily careful where we entrust the authority for talent evaluation in an organization. Too often it’s the battlefield promotion—or drawing the short straw—that puts an inexperienced manager on point for filling out these crazy forms. It’s a mistake to believe you’re ready to handle this delicate task simply because of where you sit on an org chart.

Let’s try that performance review about failure again in the form of higher level feedback rather than evaluation, from someone who has been at it several decades and really wants a winning outcome. The leader entrusted with course correction can ask a single question, and then shut up for about half an hour while listening to the answer: What did you learn from this failure?

If an employee has little or nothing to say in response—if the answer you hear lacks substance or authenticity in addressing what might come next—proceed to complete the performance review. It doesn’t matter what you write on the page. Your competitor is getting nothing but a disingenuous cost center. Lucky you. Yet if you like what you hear, you have the beginnings of a rebound, because all learning is valuable in a comeback. No one knows more than an employee who has failed what went wrong and how to course correct. It’s not about a performance review. It’s about what comes next, and how you get better.

A performance review is a task, feedback is a means

There are a hundred legal reasons your company wants documented performance reviews, every one of them sensible and with precedent. Sadly not one of them has anything to do with innovation. It’s not failure if it’s learning. Not many people ever learn to think this way. Any success subsequent to a failure can pay for the failure ten times over, a hundred times over. Any lost knowledge following a failed initiative is plain old sunk cost.

I write often about employer and employee loyalty and my sense is how employees are evaluated has a lot to do with their predisposition to hanging around for next year’s evaluation. Maybe you shouldn’t wait a year to communicate something that matters so much in a format that makes Human Resources happy. Remember, most employees don’t quit jobs, they quit bosses. The really talented ones who have options are likely to despise performance reviews, but they love talking with someone who cares about what they do and how they can get better.

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This article originally appeared on SmartBlog on Leadership.

Photo: SmartBlog on Leadership

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Mentoring is the Secret Sauce

YodaLast month I gave a talk at Innovate Pasadena on mentoring. I shared some reflections on what it has meant to me to have mentors in my personal and work life, and what it means to me to be a mentor when I have the opportunity. I talked about my former staff members who still call me up, the new people whose journey I have joined, and how all that creates an ecosystem of mutual support, vibrant feedback loops, and trusted opinion testing.

It is worth noting given the inescapable subjectivity in this meditation that this is simply how I think about the world, one mentor’s opinion as it were, and not meant to be an encyclopedic statement for all worthy mentors at large. That said, here are some of the key ideas I covered:

What is mentoring? My definition: One person who has ideas and experience to offer engaging in a relationship with another person who has ideas and experience to offer. It’s a two-way street. If it’s not a relationship—which means give and take—it does not work.

What isn’t it? It isn’t me making the hard decisions for you that you don’t want to make for yourself. I think of this as a Socratic dialogue where I get to ask you a lot of questions. You’re going to do all the work, because it’s your work, and I won’t let you dump your work on me.

Am I going to step on your fingers or tell you you’re awesome? Yes. It depends on what you need. This is jazz. I go with the flow. BTW, if you’re not awesome, I’m not going to be interested at all. If I’m hard on you, it’s because I need to be, not because I want to be. If I don’t say anything at all, it’s because I have given up—that’s the worst thing that can happen.

What’s the difference between consulting, coaching, and mentoring? I have given a three-day seminar on this, but think of it this way: When I’m consulting, you’re paying for my experience to fix a problem; you want a recommendation and you want it backed up. When I’m coaching, you’re paying me for my time to bring out the best in you. I think of both consulting and coaching as relatively shorter-term assignments that surely can be extended, and while mentoring encompasses elements of both, I think of it as a longer-term engagement, even if sporadic. When I’m mentoring, we’re both investing in a relationship that helps you do your job, that brings both of us benefits, tangible and intangible. I don’t expect anything when I consult except to get paid on time, which is why I don’t do much of it. I don’t expect you to give back when I’m coaching, I expect you to perform. When I’m mentoring, I expect to get something back from you, even if it’s just satisfaction, but I also expect to learn things from you that I can redirect elsewhere.

Can your boss be your mentor? Yes, if you are very lucky. I’ve had a few bosses who were fantastic mentors. They were 100% in my corner. They were not competing with me. I have also had awful bosses who said all the buzzwords but couldn’t have cared less if I lived or died as long as I made them rich. If you don’t have a good boss, and odds are you don’t, especially if you’re an entrepreneur, then find yourself a mentor. I promise you, the mountain climb ahead is going to hurt a lot less if you have someone who really cares about you—other than your spouse, who is truly tired of hearing all your business problems and probably can’t help you more than she or he already has.

How do I find a mentor? They will probably find you, and the question is, will you be paying attention? Almost no one fills out a mentoring application or posts a listing on Craigslist to be a mentor. Coaches and consultants do that. Mentors opt into a relationship as it naturally expands. Keep your eyes open! If someone is taking an interest in your work, go with it. Incubators and accelerators offer formal and informal ways to meet industry experts, but so do community centers and shared-interest groups. If someone invests in your company and he or she is showing an interest in more than your financial performance, spend more time with them. Do things for people all the time and they will do things for you, often when you least expect it and most need it. You don’t have to ask, “Will you be my mentor?” In fact, most of the time I find out years afterward that someone thought of me as a mentor. It happens naturally.

Will I open my Rolodex to you? OK, first, what’s a Rolodex? The answer is yes, selectively, as trust builds. If I’m financially invested in your success and I think you’ll do well with an open door, I may open it. If I’m not personally invested in you but I think there is a win-win introducing you to someone I know, I may do it, but understand, my network and my reputation are among my most important assets, so if you take advantage of my network, it’s one and done.

Do I get compensated? This can be tricky. Sometimes there is money involved in mentoring, sometimes not. First and foremost, if I admire your commitment or like what you’re brave enough to be attempting, I just do it because thank goodness someone did it for me. I have about 200 or so people from past gigs whom I still call back for free. If you worked for me in the past and reach out to me and you weren’t a turd, I’ll always call you back promptly. Sometimes in a board situation I might get paid something meaningful at liquidity. Sometimes if liquidity is a long way off and it makes sense for everyone involved given the time commitment, I might take a retainer fee. Often I get involved in a project on pure spec with the vague potential of phantom equity. A lot here depends on how much sequential time is involved, as well as how curious I am about your vision. Free or paid, cash or stock, what matters is that we both feel good about it, that the material and spiritual rewards all feel fair, and we are always transparent in our expectations.

Do you have to listen to your mentor for it to work? Yes, you have to listen. You don’t have to do what I say, but I have to know you’re listening. If you’re not listening, then why am I talking? If you just want my contacts or my money, I’m not a mentor, I’m something else. If I say something and you decide you don’t want to do it, that’s cool; just explain your thought process so I know that we are in this together. If you blow me off or don’t afford me that level of respect, I am going to bail.

Must you pay it forward and backward? You must. If you’re not planning to help someone down the road, don’t expect to keep my interest. Good people attract good people. If you join this club, expect to stay in it for life.