Tip #567: The Death of Performance Evaluation?

“The reports of my death have been greatly exaggerated.” Mark Twain

I have just read an article titled: “The Death of the Performance Review,” which was written by Jena McGregor for the Washington Post (March 17, 2015). I take issue with almost everything in her article.

Ms. McGregor begins by characterizing performance evaluation as “an annual event” that blindsides employees and is therefore “ineffective, unreliable and unsatisfactory for seemingly everyone involved.”

If a company only evaluates its employees’ performance once a year, then of course it will be unsatisfactory for everyone concerned.

An effective performance evaluation program is a yearlong process, during which time the employee and manager meet to discuss progress and plan how to resolve any performance issues. When it is time for a formal written evaluation at the end of the year, it is simply a continuation of an ongoing dialogue.

It is a manager’s job to set employees up for success. Employees can only be successful if their performance is observed and discussed on an ongoing basis. This is the only way to increase the probability that necessary coaching, training and resources are provided, or system impediments are removed, in a timely manner.

Ms. McGregor then discusses Deloitte’s redesign of their performance management program, as described in the Harvard Business Review (HBR). Deloitte reportedly decided to “ditch laborious 360-degree reviews” and to stop assigning numerical employee ratings because they were time-consuming and costly.

HBR quotes an article written by Ashley Goodall, Director of Leader Development at Deloitte Services, and Marcus Buckingham, who worked as an advisor.

They note that: “It’s not the particular number we assign to a person that’s the problem; rather, it’s the fact that there is a single number. … we want our organizations to know us, and we want to know ourselves at work, and that can’t be compressed into a single number.”

I absolutely agree that a single number provides poor feedback. More meaningful feedback requires descriptive sentences, even short paragraphs, that note performance accomplishments and recommend specific improvements, where appropriate.

HBR also reported that the Deloitte research data revealed that ratings tended to say more about the perceptions of the person doing the evaluating than about the actual performance of the person being evaluated.

I feel that there is no reason why performance evaluations should be so subjective. Employee performance should be evaluated against specific, observable, measurable and realistic performance standards. This will ensure that the performance feedback is as objective as possible.

According to the HBR article, Deloitte decided to simplify their evaluation process. First, they replaced the 360-degree assessment with a single source of input, the team leader.

Second, rather than assessing individual skills or competencies, they have managers answer four questions- either at the end of every project or quarterly in the case of long-term assignments.

The first two questions are to be answered on a 5-point scale, from “strongly agree” to “strongly disagree”:

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus. 
  2. Given what I know of this person’s performance, I would always want him or her on my team.

The last two questions are to be answered either “yes” or “no”:

  1. This person is at risk for low performance.
  2. This person is ready for promotion today.

Performance reviews are typically intended and used to provide constructive feedback to employees. However, Deloitte has not yet decided how it will share this information with employees.

Their caution is understandable. In truth, these questions are more about how the organization feels about an employee- and sharing positive answers to questions #1, #2 and #4 could be construed as commitments.

HBR claims that Deloitte’s new approach focuses on “how to develop employees in the future given their current performance.”

It’s not clear how the answers to these four questions will result in a performance development plan. It seems to me that the questions essentially boil down to a manager’s subjective judgment that an employee’s performance is either “good” or “bad,” which are much too general to be of great use.

Deloitte believes that their new performance review approach will help them change their focus from “talking about the ratings to talking about our people.” Ms. McGregor concludes her article by saying: “And that, of course, is what a performance review should really be about, right?”

Deloitte’s new approach certainly does focus on talking about their people. However, I do not agree with Ms. McGregor that this is what a performance review should do.

A performance review should really be about talking with our people- about what they are doing well, what they could be doing better, and what they need (either from the organization and/or by their own effort) to either move to the next level or strengthen their performance.

That is why it is called a performance review, not a manager’s view.

The fact that the Deloitte article is interpreted by HBR and further interpreted by Ms. McGregor opens up the likely possibility that some information about the Deloitte performance review redesign has been misrepresented or only partially reported. I certainly hope that is the case.

May your learning be sweet.


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