Do you remember your last review?

Chances are if you did, it was not a good memory. The whole event probably left you with anxiety and helplessness. If you received a positive review, maybe a raise that felt good, but at the same time you probably wondered, “What about next time? I wonder if I can keep this pace up. What if my boss changes? What happens if I have a couple off days now?” What if your last review was a negative experience for you? You are probably feeling stressed, unhappy and not sure what you can do to finally make the boss happy with your performance. Meanwhile you worry that others will get all the new opportunities now when you have had a “bad” review. After all, you remember HR saying that those with a “bad” review were no longer able to transfer to new jobs. In addition, you received a 1.5% raise because of what your boss labeled “poor performance”, so there goes your planned family vacation this summer.

Sounds familiar?

It should, since many large organizations run a similar annual performance review process. There are different reasons why this process even exists. Senior management will tell you, “It’s to keep people accountable and separate “the winners” from, wow, the “losers” or using a different term “low performers”. HR professionals will stress the need for a process to reward and punish fairly.

The reality is different

In my observations people on the receiving end do the opposite from what is expected. They start to enjoy their work less and feel like children in a job prison. The wise leader eliminates non-value added processes like ranking and rating. Microsoft just announced that they are moving in this direction to create a more collaborative workforce. Yet other companies such as Intel with their macho ranking and rating process continue. So does Yahoo with a similar process which has left employees fearful and confused. Does this impact business results? Of course as over time people decide that going the extra mile is no longer worth the effort or risk! Just the other day the CEO at AOL fired an employee in an open meeting. This is the opposite of leadership and these practices should stop.

The start to humanistic management

Creating collaboration and putting people over profit are challenging terms for public firms to accept whose main charter, sadly by law, is to only make money for its shareholders. If people enjoy their work, they will thrive and require little external incentives, silly reward programs, and above all micro-management. Of course, people want to be paid competitively, but after that, money falls lower on the list of needs for the mid-career professional. In my observation, first there is the desire to enjoy one’s work and feel like one is making a difference; second, is feeling that one is moving towards goals and dreams and one’s work supports this; third, are good relationships at work with coworkers and the boss; fourth is an interesting and inspiring work culture and business vision; fifth is a sense that one can accomplish his or her job that includes work schedule, work style, and work ethic. Oh yes, and sixth is money.

Back to the annual review

The annual review destroys moral, sets up a parent-child relationship at work between boss and employee and is too focused on past performance vs. future development. Worse, salary increases are linked to performance evaluation and this largely left up to the subjective views of the organization and merit allocation from HR.

Adults do better with positive feedback

The other thing missed by many leaders is that adults are more open to feedback if it is positive and forward looking vs. punitive, evaluative, and past oriented. Many managers will admit they don’t really like to write the annual performance review neither do people like receiving them. In many firms, for example, the annual evaluation ritual takes place between November and January. During the first two months managers are busy figuring out what to write while trying to interpret the HR guidelines of the month. Then around the first of the year, everyone is busy either giving or receiving reviews. In the end, it is a complete waste of time. Morale is lower, bad feelings rise and overall productivity is stagnant until around March when the pain of the review wears off and people forget about until the next round in the winter.

The alternative?

First, leaders and their followers should sit on a regular basis to agree on goals and how they will measure progress. There should be both formal and informal communication. I think it’s a good idea to write down goals and progress but not a good idea to write down feedback or even worse evaluations. As adults, we are more receptive to feedback when it is orally communicated with our best interests in mind. We are not so receptive when this performance message is written down and kept in our files. HR professional will argue that this record keeping is necessary for legal reasons just in case there are issues later. This reminds me of a pre-nuptial agreement just in case if something goes wrong. These relationships are doomed from the start with a defensive position vs. one of trust, acceptance and integrity.

Coaching and the humanistic culture

Through coaching, open communications and development focused relationships at work, people will find joy in their work and thrive. The work culture will be more open while encouraging creativity and collaboration. No longer will the threat of punishment or the promise of reward be the “stick” held over people. The “carrot and stick” model of behaviorism is outdated and should be discarded along with the tools which support it, such as the annual performance review. Some forward thinking leaders are starting to change their approach seeing that the nature of work, relationships, and our lives have changed. They see a better path to profit which starts with putting people first. These days, people expect more out of their work and will only remain engaged in a work culture where they feel energized and authentic.

I’ll be cheering you on as you go!

Craig Nathanson

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