Posted on January 09, 2017

Welcome back!  Before jumping in, let’s review where we were before the holiday break.  Previously, The Monday Minute (or two):

• Explored why ‘outstanding’ performance is so poorly defined (what, perfect attendance ≠ outstanding performance?!)
• Considered the toll the lack of a clear definition of ‘outstanding’ takes, especially on top contributors
• Observed that most performance appraisal processes do not work as intended, possibly because their users are human, and
• Suggested that there must be a better way to appraise performance.

Based on your feedback, it’s clear that we are not alone in these beliefs.  Especially if a performance appraisal process is to do what it really should do:  help the organization and the units/departments within it achieve measurable year-over-year gains in bottom-line performance by improving the capabilities of people throughout the organization, and, importantly, helping as many people as possible perform at the highest level.

Yes, you read that right.  Help as many people as possible perform at the highest level.  How else can an organization thrive?

So, what would a process look like that is designed specifically to improve organizational performance by helping all employees perform at the highest possible level? Let’s begin by taking the best components of current performance appraisal processes.

[Insert Final Jeopardy music here while you consider what you’d salvage.]

Okay, let’s not, since, arguably, there isn’t much worth borrowing from most performance management processes.  Not if an effective process is desired, one that actually improves business and individual performance.  You’d have to start fresh and follow these six steps [Warning:  Potentially radical ideas to follow.  Not for the faint of heart, nor for those who seek to maintain sameness.]:

1. Establish a clear definition of ‘outstanding’ employee performance.  Align it directly with the business goals of the unit/department by considering ‘outstanding’ to be contributions required to help the unit/department achieve or surpass its business goals.  And take it a step further:  Also make it about how an individual achieves top results on the job.  Teamwork, collaboration, and communication should be essential elements of any definition of ‘outstanding.’  Involve employees in the creation of that definition.

2. Replace the dreaded concept of ‘feedback’ with something much more positive and constructive:  Coaching/mentoring.  Create a workplace where supporting people to perform at the highest level is the norm and happens regularly and informally.  Most of us respond better to information designed to help vs. information intended to criticize.  Making coaching/mentoring the new normal will also separate your organization from others, thereby improving your ability to attract and retain top talent.

3. Involve everyone – not just the supervisor/manager – in the process of real-time coaching and mentoring.  Teaching is a continuous process, not one to be relegated to a once-a-year meeting.  And teaching is often more effective when provided by peers than by supervisors.  This is not unlike the behavior seen in successful sports teams, where teammates help each other perform to their highest potential.

4. Eliminate the annual performance review discussion.  This conversation won’t be needed to discuss performance if real-time, continuous support has been provided.  An employee should always know at what level he/she is performing.  Replace the performance review with a discussion of the individual’s career goals and plans.

5. Dump the use of the bell-shaped performance curve.  The intention is to have as many people as possible achieve ‘outstanding.’  The more the better, if the goal is to have the unit/department and, in turn, the organization thrive.

6. Entirely disconnect the process from compensation, especially the concept of ‘merit increases.’  Money clouds the picture exponentially, and there’s typically just not enough of it available to make it work given that cost of living adjustments are included.  For most, a 4.0% vs. a 3.0% increase is not pay for performance.  It’s futile to claim that it is.  There’s a much better way to get money into the bank accounts of those who excel, something we’ll consider next week.

You were warned about the radical nature of these ideas. Like any good stew, let them simmer.