One Down, 14 To Go

One Down, 14 To Go

There has been a lot of coverage in the news recently about a growing number of large companies that are doing away with traditional annual performance reviews (see for example, Why big business is falling out of love with the annual performance review, The Washington Post, 17 August 2015). Companies such as General Electric, Adobe, Accenture, and Gap are replacing annual performance reviews with new processes that are more in-step with the rapidly changing times we live in.

The motivation for change is driven by these problems:

  • Infrequent and lack of real-time feedback from manager to employee.
  • Decrease in the amount of time spent mentoring and coaching employees.
  • Annual cycle is too long given the rapidly changing business environment.
  • Goals set in January may be out of date a month or two later.
  • Employee reviews and forced rankings demoralize employees and pits employees against one another.
  • Cost of activities related to annual performance reviews.
  • Pile-up of annual reviews that managers must do at the end of the year.

Conspicuously absent as a rationale for change are the dozens of errors that managers make in conducting annual performance reviews.

Basically, the traditional annual performance review is a batch-and-queue process synchronized to the budget year. The solution? Decouple the annual performance review process from the annual budgeting process and create flow – a flow of helpful information (feedback) to employees.

Companies get accolades for “crowdsourcing” feedback from the workforce on how to improve employee performance. However, nothing prevented employers from getting such feedback 10, 20, 30, or 40 years ago. Instead, there was a long-term commitment to doing a dumb thing (traditional annual performance reviews) due to an unwillingness to listen to employees and managers, a lack of critical thinking by company leaders, and organizational politics and groupthink that preserve the status quo.

It is good to see that one leadership process, performance review, is finally being improved at some large employers – though they are likely unaware of the dozens of errors that can be made by managers in the new process. The purpose of performance reviews is to improve employee performance, and so the process should result in that outcome. But, they must not stop there. How many other leadership processes have been going on for 30+ years that do not make sense and do not have the intended outcome? And, what about the hundreds of errors that leaders make when performing these other leadership processes?

Performance review is just one of 15 leadership processes that must be improved, for all of the above reasons, as well as because of the many errors that leaders make in performing each one of these processes. If you accept the premise that we now live in rapidly changing times, then leaders must improve these 14 processes as well:

1. Leading and managing people
2. Planning and budgeting
3. Workload management
4. Decision-making
5. Problem recognition and response
6. Problem solving
7. Management reviews (finance, operations, HR, etc.)
8. Employee feedback and coaching
9. Team meetings
10. Asking questions, listening, and receiving feedback
11. Information sharing
12. Developing people
13. Walking around, “go see”
14. Stakeholder engagement (customers, suppliers, investors, communities)

Each of these leadership processes can be as much of a morale and productivity killer as the annual performance review process. Further, it is not much of an accomplishment to improve flow in one leadership process, while all others remain batch-and-queue. Such processes, riddled with errors that slow down and block information flow, cannot be permitted to exist in rapidly changing times. Flow must be the standard for all 15 leadership processes, and leaders must improve processes over time to achieve the standard.

In my new book, Speed Leadership: A Better Way To Lead In Rapidly Changing Times, I re-frame the problem of poor leadership in terms of time and information flow and present new ways to understand leadership and new methods for improving leadership processes. I am sure you will find this new perspective to be more specific, practical, and actionable than the traditional view of leadership based on one’s behaviors. You can read more about Speed Leadership here, here, and here.

By: Bob Emiliani
Posted: August 24, 2015, 1:33 pm

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