So you think you've had it with performance reviews?
A few years ago, Chris Oster's unit at General Motors got so fed up with traditional reviews that it abolished them. "There were so many problems - for managers and for people being appraised," explains Oster, director of organizational development for the GM Powertrain Group. "We had 'rater error.' We had the 'contrast effect.' We had the 'halo effect.' But the biggest problem was that feedback wasn't leading to changes in behavior."
Darcy Hitchcock, president of AXIS Performance Advisors, helps companies create high-performance work systems, including feedback systems. She says that one of her most painful professional moments came from a performance review early in her career: Her boss rated her a four on a five-point scale. Though most people would consider that a decent score, Hitchcock agonized over why she didn't get a five. She confronted her boss: What steps could she take to get a perfect score? He had no answer. Angry and confused, she left the office and spent the day in a nearby park. "In the space of a one-hour meeting," she says, "my boss took a highly motivated employee and made her highly unmotivated."
Many years ago, top executives at Glenroy Inc., a privately held manufacturer of packaging materials outside of Milwaukee, held an off-site at which they reviewed key company policies. A week later, Glenroy held a rally in the company parking lot at which employees built a bonfire and burned its policy manuals.
The company's well-established approach to reviews literally went up in smoke. But unlike other policies, which Glenroy refined or reinvented, reviews were never reinstated. "When people find out that we don't have formal reviews, it drives them crazy," says Michael Dean, Glenroy's executive vice president. "They don't understand how we can run the business. Leaders here provide people with feedback. But the way for it to be effective is on a day-by-day, minute-by-minute basis - not twice a year."
Feedback matters. The only way for people to get better at what they do is for the people they work for to provide candid, timely performance evaluations. "In today's environment, you have to evaluate what's changing and what's staying the same, what's working and what's no longer working," says Bruce Tulgan, author of FAST Feedback (1998, HRD Press) and founder of Rainmaker Thinking, a consulting firm based in New Haven, Connecticut. "Feedback plays that role." Anne Saunier, a principal at Sibson & Co., a consulting firm based in Princeton, New Jersey, puts it this way: "If you have ideas and information that will help someone perform better, it's hostile not to share them."
So why are reviews still the most painful ritual in business? A 1997 survey by Aon Consulting and the Society for Human Resource Management reported that only 5% of HR professionals were "very satisfied" with their performance-management systems. In 1995, William M. Mercer Inc., based in New York City, polled executives about reviews. Only 7% said their systems were "excellent"; more than 70% had revamped them or were planning to.
Part of the problem with reviews is that human nature hasn't changed - few of us enjoy hearing about our shortcomings, and few of our bosses and colleagues look forward to describing them. Part of the problem is that work itself has changed - it's more team- oriented, less individualistic. The tougher it is to measure individual performance, the tougher it is to evaluate it.
But the biggest problem with reviews is how little they've changed. Too many leaders still treat feedback as a once-a-year event, rather than an ongoing discipline. "Doing annual appraisals is like dieting only on your birthday and wondering why you're not losing weight," cracks Saunier. Too many leaders confuse feedback with paperwork. "Filling out a form is inspection, not feedback," says Kelly Allan, senior associate of Kelly Allan Associates Ltd., a consulting firm based in Columbus, Ohio whose clients have included Boeing, Paramount Pictures, and IBM. "History has taught us that relying on inspections is costly, improves nothing for very long, and makes the organization less competitive."
We can't teach you the one right way to provide - or receive - feedback. But our program does offer five action-oriented principles to improve your performance with performance reviews. Be sure to let us know how you think we performed. . .
1. Feedback Is Not About Forms
Mention the term "performance review," and the first image that comes to mind is paper: checklists, ratings, all-too-familiar reports that invite all-too-predictable answers. That's a problem. Anyone who equates delivering feedback with filling out forms has lost the battle for smart appraisal before it's begun. "If you use forms as the basis for meetings about performance," argues Allan, "you change only one thing - what might have been a natural, helpful conversation into an awkward, anxious inspection."
Yes, there are reasons to document the appraisal process. But most of them involve administrative neatness or legal nervousness, not sound thinking about feedback. That's why more and more companies that are serious about reviews use forms only to confirm that a review has taken place - not as a tool for the review itself.
Consider the example of Parkview Medical Center in Pueblo, Colorado. For years, the hospital's leaders have been importing new ideas about quality and service into their 286-bed facility. Early on, administrators and executives looked at ways to improve how the hospital evaluated its employees. They began by exploring how best to modify the hospital's existing checklist-based reviews: Which ratings made the most sense? Which scoring systems worked best? But no amount of tinkering satisfied Parkview's leaders.
Dorothy Gill, vice president of human resources, and a team of her colleagues explained their dilemma to the CEO: "He said, 'If there isn't a better way to do reviews, let's just stop doing them.' So we did. We had no idea what we were going to do instead."
Gill and her colleagues eventually came up with an idea. It's called APOP, for Annual Piece of Paper. The most valuable kinds of feedback, they concluded, are the daily interactions between leaders and their people - interactions that can't be captured on paper. The hospital still requires that managers do annual reviews. But instead of being top-down appraisals, the reviews are bottom-up requests for assistance: What can the leader do to make the employee's job easier? What gets in the way of accomplishing the job?
And the medium for those reviews is conversation, not written evaluation. There is a form - the APOP. But its only role is to confirm that the conversations took place. There are no scores, no written goals for the next year. It's literally a piece of paper, signed by the employee and the director, that records the date, place, and agenda of the meeting. The APOP process "takes performance reviews and turns them upside down," Gill says. "Directors don't tell employees how they're doing. They ask open-ended questions to see what will help employees do a better job."
2. Feedback Delayed Is Feedback Denied
You know the old joke about airline food. First passenger: "This food is terrible!" Second passenger: "And the portions are so small!" Most of us feel the same way about performance reviews. The only thing worse than how unsatisfying they are is how seldom they take place.
Bruce Tulgan interviewed hundreds of managers and employees for his book, FAST Feedback (the acronym stands for "frequent, accurate, specific, timely"). One of the most common complaints, he says, is that reviews take place too long after the performance being critiqued has occurred. "We don't work in a year-by-year, pay-your-dues, climb-the-ladder environment anymore," he says. "The once- or twice-a-year evaluation is a creature from the workplace of the past. Today's business leaders expect workers to be project-driven, results-oriented. That doesn't fit with the old model of reviewing performance every 6 or 12 months."
Why do smart companies and leaders stick with such an obsolete practice? Because, Tulgan argues, they have well-established systems for conducting annual or semiannual reviews. "There are no systems for day-to-day engagement with workers," he says.
That's where "FAST feedback" comes in. Tulgan offers lots of techniques for accelerating how people deliver and process feedback. Managers, he says, can build feedback into routine meetings and memos. They can learn to deliver feedback through email and voice mail. They can use short notes. Ideally, they should set aside a designated chunk of time each day, just for giving their people feedback. "If we really want a just-in-time workforce," he argues, "we have to create just-in-time feedback."
One caution: There's a difference between timely feedback and rushed feedback. Rick Maurer, author of Feedback Toolkit (Productivity Press, 1994), argues that a few old-fashioned principles of human behavior still apply, even in fast-paced work environments. If you're providing feedback around an emotionally charged event, wait a day or two (but never more than a week). "Sometimes you're so emotional that it makes sense to wait," he says. "Let your gut be your guide." And if your feedback involves a big issue, something the person you're working with really needs to take seriously, then find an appropriate time and place - even if it delays the session. "Schedule an appointment and have a meeting," Maurer urges. "Don't give important feedback in the hallway."
3. Feedback Is Where You Find It
It's a mistake to blame all the problems with performance reviews on the people who deliver them. Feedback is no different from any other business process - you get out of it only what you put into it. If you're not getting enough useful feedback, don't look at your boss; start by looking at yourself. "Ultimately," says Sibson & Co.'s Saunier, "managers aren't responsible for their people's performance. People are responsible for their own performance. There's feedback all around you - if you pay attention. If you're not getting enough feedback, ask for it."
Saunier offers an example from her own experience. She heard from a unit coach that a new employee, who'd been on the job three months and had been working with Saunier on a project, complained that he wasn't receiving enough feedback. "I couldn't believe it," Saunier says. "We walked back together from the client's office every day. And every day we discussed what we could do better. Just because I didn't sit him down in my office doesn't mean I wasn't providing feedback. The next time we walked back from the client's, I began our discussion by saying, 'Now, here's some feedback.'"
LeRoy Pingho, a vice president at Fannie Mae, the mortgage giant, never complains that he's not getting enough feedback. Since the mid-1980s, he's organized annual 360-degree reviews. This is not an official company program; it's his personal program. He selects a cross-section of colleagues - a boss, a subordinate, a customer - and asks them each to assess his performance. "Some things are 'flat spots' for me," he says. "I can struggle with them alone or get help."
Last year, Pingho took his review process a step further. He wrote an assessment based on the feedback he received, and then distributed copies to 50 people: bosses, peers, direct reports, his wife. He sent everyone the same message: "You work with me, so you should know my strengths and weaknesses. Also, I'm going to ask four of you to help me work on the things I'm not good at."
Pingho dubbed those four people his "spotters." He chose two at his level, one above him, and one below him. He met with each of the spotters to review the "flat spots" he'd identified. Then he told them that he wanted to focus on getting better at two of those weaknesses. (He didn't think he could tackle five at once.) One was active listening: "When I'm in meetings, I'm already through the presentation before the presenter has gotten to the first page." The second was empowerment: "I want to use the input I get from people instead of disregarding it."
He asked his spotters to alert him when they saw behavior that related to those improvement goals: "I said, 'You don't have to do this in a formal way. But if you see something, tell me.' It's like being on the high bar. Just knowing that there's somebody to make sure you don't fall helps you become more self-confident."
At GM Powertrain Group, a new approach to feedback is helping salaried employees gain more self-confidence. The group, which designs and manufactures castings, engines, and transmissions, began redesigning its appraisal processes in July 1996. The new system, called Individual Growth Strategy, revolves around a few simple principles: People want to do their best. The people who improve are those who have the most control over their development. So it's up to employees - not managers - to decide what kind of feedback is most useful and from whom it should come.
GM offers training in ideas, techniques, and tools for soliciting feedback. But it's up to the people who want feedback to seek it out. "If I buy something, I'm more committed to using it than if someone gives it to me," explains Chris Oster. "The same goes for feedback. If I solicit feedback, I'm more inclined to use it."
4. Giving people a Raise isn't the Same as Giving them Feedback
It's hard to argue with the principle that the better you do, the more money you should get. But most performance gurus say that explicitly linking reviews and raises has unintended consequences.
"A raise is a transaction about how much money you or I can get," explains Kelly Allan. "Feedback is a conversation about how much meaning you and I can create. Feedback is about success for your people and your customers. Pay is about marketplace economics and skills. Pay and feedback are not related."
Allan practices what he preaches. At his company, discussions about money are tangible and statistical. People play a big role in setting their own pay. Associates research market rates for talent in their peer group, based on skills and experience. People who want a raise can present evidence that they've acquired a new skill or had an experience that the market would reward with a salary increase.
Conversations about performance, on the other hand, are informal and collegial. Associates meet weekly with a colleague to discuss their current project. The firm schedules formal sessions monthly, quarterly, or every six months (depending on the associate's tenure) to discuss the past, present, and future of each person's work. "We have conversations, not appraisals," Allan says. "And these conversations never include discussions of pay. Period."
Glenroy Inc., the Wisconsin manufacturer that burned its employee manuals, has experimented with a more radical approach to pay. Several weeks after the bonfire, it was time for annual performance appraisals and salary reviews. Management was clear: Reviews were on the ash heap of history. But Glenroy did need to figure out what kinds of raises its employees would get. The improved approach? Employees decided their own raises.
Glenroy divided its workforce into peer groups based on job classifications. It was up to those peer groups to set their raises. In most cases, executive vice president Michael Dean reports, the peer groups were tougher than management would have been; the company later had to adjust many of the raises upward. "We treat people like adults," says Dean. "That's the essence of leadership."
5. Always Get Feedback on Your Feedback
One reason candid feedback is so important is that most people are great at self-delusion. It's easy to think we're better at writing software, creating marketing campaigns, or evaluating business plans than we really are. That same talent for self-delusion applies to the art of giving feedback. Bruce Tulgan puts it this way: "There's such a disconnect between managers' impressions of the feedback they give and their employees' impressions of the feedback they get. Most managers need a reality check."
Tulgan has devised a simple technique for creating such a check. He suggests that managers think about the three most recent times they offered feedback to one of their employees. Then, they should write down brief answers to questions about those sessions: What prompted you to give feedback on that matter at that time? Did you check your facts first? What was the substance of the feedback? Was there any concrete action as a result? Next the manager should ask the employee to write down brief answers to the same questions. The comparisons, Tulgan says, make for interesting reading.
"Think of the people who work for you as 'customers' for your feedback," he argues. "Find out whether the feedback you're providing is working for them. If it's not, what's the point?"
Gina Imperato (email@example.com) is an associate editor at Fast Company.
A version of this article appeared in the September 1998 issue of Fast Company magazine.