Performance Reviews

One of the things that makes my commute to work enjoyable (next to the BBC Friday night comedy hour) is the LeanBlog podcast. In it Mark Graban talks to different people about Lean. The people he talks to have varying backgrounds, and the general quality of the podcast is very high.

One of the podcasts I listened to a while back was with Samuel Culbert, who was talking about performance reviews. I was reminded of that episode tonight while talking with some ex-colleagues about the way performance reviews were done in our old company. We weren’t very enthousiastic.

Now you might think that that is not too strange. People are very rarely enthusiastic about their performance reviews. The way most appraisal systems are set-up is that only a small percentage of people if allowed to receive a very high score. The idea is that there are a very few high-performers that should get an extra pay raise or bonus (or both), but that their occurrence should be very rare. The result is that for most people, performance review meetings contain lots of unpleasant surprises.

Why? Well, one reason is that managers are only allowed a quotum of high performers. This certainly was the case in the company I was talking about with my ex-colleagues, and going against that got me into some trouble at the time. So the team that worked fantastically together, and managed to bring a very difficult project to a successful conclusion against the odds saving the company millions. That team only gets one person to have the highest level pay-raise. The others, who worked just as hard, and were just as indispensable for the results, get a disappointment. Not that they don’t get a raise, but for those people the manager needs to emphasis the things that they did wrong. To be able to defend them not getting the top score, despite their success.

Lucky for the manager/team-lead there is always something wrong to be found! Lucky for the company, they hire completely random, so their bell-curve of performance always works out… Actually, Culbert mentions that these distributions usually mean that about 70% of the people should be marked as average. That is going to be difficult, isn’t it?

But the appraisal is necessary, right? To ensure people stay motivated. To ensure they’re focused on improving. To set explicit targets, both for their work (because you can’t expect them to understand what’s important for their day-to-day work), and for their personal development (because… sorry can’t seem to think of a reason).

Mr. Culbert makes some good points in the podcast, calling performance reviews “corporate theatre,” as well as a “sham,” a “facade,” “immoral” and “intimidating”. Unsurprisingly, since he’s written a book called “Get rid of the performance review“.

His latest book is apparently called “Beyond Bullshit“, which sounds like another one I should pick-up.

My own views on this practice is aligned with Culberts: at best, a performance review doesn’t add any value; mostly, it is harmful for people and company.

If the feedback you as a manager give during a review is in any way new to the person you’re reviewing, then you’ve failed as a manager to do your job (which should have been helping that person to do their work as best as possible, not collecting information on how they do that work for later use). If not, why have the meeting.

If the review is about verifying whether targets have been met, or to set new targets, you really should read Dan Pink’s Drive about all the ways the use of targets is hurting motivation, and thus performance, of your people.

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