Performance reviews: time for a make-over

HR expert Tim Southey believes companies have to streamline and improve the outdated performance management systems.

There is a common refrain in boardrooms across the world and that is that the cost and effort invested in performance review systems are not paying off. Time-consuming and onerous, current processes are failing to improve efficiencies, grow top-line growth or empower employees to perform better. The bottom line is that review systems are not cutting it. The annual, or bi-annual ritual, is hated by both managers and employees. The filling of forms, coupled with long meetings, breed resentment and are only adhered to because it is company policy and everyone, from the CEO downwards, does not dare question the efficacy of the process.

Performance reviews have become the sacred cows of corporate life. After all, they are seen as key to improving efficiencies, increasing productivity and growing the top line. But they are also meant to enable companies to retain and develop the best people.

The question is, why are conventional review systems not working? The answer is quite simple: conventional reviews focus on what should go into the process rather than what should come out of it. 

The emphasis in conventional systems is about form, rather than content. Documents have been developed to ensure that every eventuality, and individual need, is covered. The result is bureaucratic and boring. The process focuses on a tick sheet that covers most bases but delivers very little in terms of outcomes.

The missing elements are, firstly, that the system has degenerated into a process devoid of any meaningful content and, secondly, that the lists are invariably missing specific efficiency improvements or business generating activities. 

There is a solution to this problem.  It involves changing the character of the conversation by asking four “acid test” questions that hone in on efficiencies and productivity. Most review discussions are entered into grudgingly by both parties. This can be turned around, but only if the conversation is characterised by active engagement.  As the person leading the discussion, this requires engaging with the person in a way that allows you to really understand the answers you are being given rather than simply hearing the words.

What you need to be able to gauge is whether the person’s head is connected to their heart. Do they know exactly what they need to do and are they motivated and willing to achieve this?  

It is not difficult to judge whether the conversation you are having is hitting the mark. The first thing to look out for is the clarity of response and that the employee crystal clear and focused in their answers.  If not, a telltale sign will be that a question is deflected, and then answered with platitudes. Another thing to pay attention to whether there is an emotional connection to the commitments being made and that the person is showing genuine willingness to achieve the goals being set.

Also, do not underestimate the tone and content of the conversation because paying attention to what questions are asked is as important as how they are asked.

To achieve the best outcome, there are just four “Acid Test” questions that need to be posed;

  1. What is going well? The point of this question is to establish how are things going, what the person's strengths are and what their main achievements have been over the past 6 months.   
  2. What is not going as well as it should? Here the idea is to find out what the person believes are areas in which improvements can be made, in their own performance as well as for the department or company.
  3. What exactly is expected of you over the next 6 months?  The point of this question is to get clarity on the person’s goals and priorities and how these will improve efficiencies in their Department or generate business for the Company.
  4. What plans do you have to grow yourself, and to grow the company? The idea here is to encourage the person to articulate their improvement plan, how they intend to get to the next level as well as how they envisage improvements in efficiency.

A meaningful engagement around these four questions should take no more than 30 minutes. Try them on your team, or conduct an informal one-on-one with an employee. Then ask yourself whether there is clarity on both sides about what is expected and whether the engagement with the employee will lead to improved efficiencies and productivity.

Here are a few short points about process:

  • There is no substitute for simplification. Reduce whatever questionnaires you have to one or two pages.
  • Ensure that individual goals and targets focus on improved efficiencies and/or generating revenue or improving productivity.
  • Remember that commitment is about head and heart. Make sure that the discussion is productive for both parties.  

This honed-down and focused model has proved highly successful in companies ranging across all levels. It works and proves that performance management can be transformed for the benefit of both employees and the company.

Tim Southey is a specialist in Performance Management. He has 35 years’ experience in blue chip companies in South Africa and overseas and is a former Manager of the South African National Cricket Team. He has combined his insights to develop practical Performance Management solutions for the worlds of business and sport.