STOP Doing Annual Reviews and START Doing These 4 Things Right Now

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annual-performance-review

You’ve been there, right? You’ve felt the special dread that accompanies an invitation to annual performance reviews.Or perhaps you’ve lost hours of your life typing up what feels like a defense of your continued employment? You are certainly not alone. In fact, you’re so not alone that a Google search for “the trouble with annual performance reviews” will yield just shy of 8 million links full of commiserative content.

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If you’re lucky, you’re in an organization like stable|kernel that has already thrown traditional annual reviews to the curb in lieu of behaviors that are far more effective at shaping employee performance and company growth. If not, you’re likely eager to learn how to build such a program in your office – and the sooner the better! But before I tell you about what’s working well for us, let me explain just some of the inherent problems with traditional annual reviews:

They aren’t healthy

Seriously. Neuroscientists David Rock, Josh Davis and Beth Jones revealed in their 2014 research study that when companies use frameworks like Jack Welch’s controversial “Vitality Curve,” or other programs that label employees “with any form of numerical rating or ranking, [they] automatically generate an overwhelming “fight or flight” response that impairs good judgment.” Creating negative, unpredictable behaviors in the workplace simply isn’t good for anyone.

They can be highly subjective, biased and tainted

Annual reviews in which a manager is asked to rate aspects of an employee’s performance on a scale of 1-5 are inherently subjective and often lead to inconsistent applications within an organization. Rarely is the meaning of a 3 agreed upon (does it equate to “average” or does it mean that their performance isn’t acceptable? And, if so, against what or whom?)

And then there’s bias. The Society for Human Resource Management outlines several steps organizations can take to try and lessen the impact of cultural, age and gender-related bias, but it warns that the “challenge may be steeper and more pervasive than HR professionals realize.” And unfortunately, the best practices for mediating bias involve significant investments in time and materials, making bias reduction especially difficult for small organizations.

Finally, even if a manager recognizes its own bias there can be problems as a negative score or assessment can be viewed as an indictment against the very manager who issued it. If they were really good at their job, their employees would be high performers, right? Accordingly, many assessments are tainted.

They look backward

Certainly, there is value in being reflective about performance and experiences, but simply evaluating how a person did last year doesn’t do much to shape a strong future for that individual or for the company. And let’s face it – there’s a good chance that the amazing sale you closed in Q1 or the successful program you built last June will be overshadowed by the meeting that went poorly with a stressed-out client last week. In the immortal words of Shakespeare’s Macbeth, “what’s done is done.” If you want to move forward, you need to look forward.

They have a narrow focus and lack meaningful outcomes

Many traditional reviews are myopically focused on assessing an individual’s strengths and weaknesses, revealing little about how the employee has contributed to the overall goals of the company. And for my money, such a payout isn’t worth the hours of work it takes to produce. And once we have the assessment, what do we do with it? While some reviews include tips about what an individual should work to improve, the list all too often ends up being filed in a drawer and forgotten.

I could go on and on detailing the shortcomings of traditional annual reviews (and I imagine you have some nuggets to contribute), but much like those reviews, what’s the point? At stable|kernel, we have chosen to look forward with a focus on the continued growth of our employees instead of backward in judgment.

If you focus on what you left behind, you will never be able see what lies ahead.
-Chef Gusteau , Ratatouille

Let me tell you about four of the exciting things we’ve been doing at stable|kernel to render annual reviews obsolete:

1) We’ve clearly defined the interdependent purpose, values and competencies of our organization. And we don’t shut up about them.

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Many of us spend the majority of our waking hours at work so it’s not a surprise that we want that investment to be meaningful. Our employees, company and clients all benefit from our continuing focus on our shared purpose, values and competencies.

At stable|kernel, we don’t just build apps. And we don’t just run marketing campaigns. We share the purpose of being engaged in building a business that constructs mindfully crafted, stable software that solves our client’s challenges. Each person on our team (from finance to design to marketing to development) brings their unique talents to bear in helping us deliver on that purpose every day.

We recognize the competencies that we must continually hone to be exceptionally good at what we do, and we offer endless opportunities for everyone on staff to develop those skills. A shared purpose and clearly defined core competencies encourage everyone to continually contribute their best.

The third crucial element in our foundation is our company’s values. We’ve launched The Year of Values to promote and encourage our four values throughout the year.

  • Integrity
  • Respect
  • Sharing and Learning
  • Stay Hungry

We’ve implemented a variety of tasks, activities and incentives to promote these values within the company and as an organization, we strive to practice each one in our personal and professional lives.

While traditionally overt business goals and activities are obviously important to companies, they only tell part of the story. If fact, leadership coach Jesse Sostrin argues that within every job you’ve held there are actually two jobs: “The first was the position you interviewed for, including all of the tasks outlined in that job description. The second “job-within-the-job” included the unspoken, unwritten work that among other challenges requires you to manage constant change, collaborate well with others, navigate workplace politics and get your best work done in an environment of shrinking resources and increasing demands.”

And we’ve all seen what happens when an employee is good (or maybe even great) at the first job, but not at the second. It kills collaboration, morale and results quickly. And if not caught quickly, the entire organization can become infected. The surest prevention of this is to unveil the hidden curriculum of our jobs and practice implementing the value-based behaviors that make us proud of our companies.

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 2) We check in early and we check in often

Despite the fact that we have tremendous freedom to work where and when we want to, there is no shortage of immediate, regular and honest communication. We believe our success is contingent upon creating a company culture in which everyone knows they authentically belong to the team and will be supported. Through daily stand-ups, weekly 1:1 coaching, small project-based teams, innovative tools, lunch and learns, field trips, beltline walks, work retrospectives and more, our employees know that we’re committed to supporting a “framework of long-term, stable care and concern” through which they can experience “frequent, positive interactions with the same individuals.” Psychologists Baumeister and Leary argue this is fundamental in satiating our need to belong to something meaningful.

3) We’re built for life-long learning

One of my favorite aspects of the technology industry is that innovation is constant. Because of this, we attract curious people who thrive through access to perpetual learning opportunities.

The purpose, competencies and values we’ve adopted provide endless opportunities for personal and professional growth. Our Employee Development Program (EDP) invites each employee to self-curate a path of learning and working toward objectives that are directly related to our company-wide goals. When employees decide they have progressed as far as they can with a given objective, they replace it with something new that captures their imagination. This program encourages ongoing innovation and improvement for both the individual and the company.

4) We celebrate

Throughout the year we regularly celebrate our amazing team and the exceptional work that they do (our App-mazing Race, Holiday party, bourbon toasts and Badge(r) of Honor are a few examples of this). And while we don’t run traditional annual reviews, we do celebrate our “s|kiversaries” with some pomp and circumstance. The honoree is treated to a presentation documenting the milestones they reached in the previous 12 months, reflections from their co-workers, and a heartfelt thank you from their manager. And when we have our act together, cake. Because there’s always room for cake.

If you’re still suffering from boring, ineffective, anxiety-inducing annual reviews, hopefully our programs will inspire you to start something new. And if you’ve already joined us in the effort to make work mean more, let us know what you’re doing!

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