Why Employees Hate Annual Reviews

The world of work has changed forever. Most business leaders I speak with are still relying on outdated management practices from the industrial revolution that are no longer effective, or worse, that actually contribute to challenges with employee productivity and performance. One of the main practices standing in the way of progress is the annual review.

To succeed today, companies cannot rely on the most important conversations between managers and employees happening only once or twice a year. Moreover, organizations cannot operate in a paradigm where information flows upstream to leaders, who then make decisions in isolation before passing down directives for employees.

Companies must be flexible and agile by decentralizing decision making, providing the people who are closest to the problems the autonomy to decide and act on behalf of their organization. This rapidly speeds up their turn on actions, quickly resolving issues and innovating faster than ever before.

One of the trends that we are seeing in the last couple of years is that companies are shifting away from traditional performance reviews, getting rid of them altogether or only using them as part of an overall performance management strategy. In 2015, Deloitte announced that they would reinvent performance reviews based on findings that “the best team leaders revealed that they conduct regular check-ins with each team member about near-term work.”

The 15Five team has assembled an ebook designed to explore the annual review process, it’s origins, benefits and downsides. My hope is that this will be a valuable resource for your internal communication and performance management strategies. What follows is an excerpt from Chapter 3, What Employees Think:

The short answer… annual reviews suck.

Who wants to be scrutinized and risk being told that they are inadequate by what they see as unfair representations of actual performance. Plus many reviews are accompanied by rating and ranking systems. Take for example, “rank and yank” popularized by former head of GE Jack Welch, in the 1980’s:

Employees were given a rank based on performance. Only the upper percentiles of high-performers were given promotions and raises. As a result, people directly competed with each other for rewards, hurting collaboration. Not to mention that the lowest 10% were fired.

With rank and yank, productivity alone does not inform the results, as it is productivity relative to other employees. Even when employees were productive when judged against objective standards, their relatively “poor” performance was cause for dismissal.

GE abandoned rank and yank years ago, but in 2015 they announced their decision to abandon performance reviews altogether in lieu of more regular feedback via an app called PD@GE (Performance Development at General Electric).

How Reliable Is A Self-Assessment?

Even without raking employees, reviews are often criticized for being unreliable and counter-productive. Employees spend the months leading up to them politicking for position instead of doing actual work. A typical scenario goes like this:

In November, an employee gets an email from their manager (or worse, from HR) with an attached form. The form asks what the employee did over the past twelve months, how they think they performed, and what are their strengths and weaknesses. So instead of working that day, employees spend hours carefully crafting a document that paints them in the best light possible.

All sorts of issues including whether a manager hired or inherited an employee can bias a performance review. And cut-throat environments tend to alienate talented employees. They experience high levels of stress and anxiety, which decreases productivity, morale, and overall job satisfaction. Those employees are likely to search for new employment at a more supportive culture.

High-performers understand that there is constant room for improvement, and they thrive when given the opportunity to give and receive constructive feedback. If managers are not talking with them on a consistent basis, they’ll leave to pursue ‘greener pastures’ where they feel they’ll be heard and valued.

Companies that remove ratings are seeing the conversations shift from justifying past performance to thinking about growth and development. Their employees are happier, which encourages more engagement and better performance.

Key Takeaways:

Outdated thinking continues to impact growth in the modern workplace. Ranking people and providing financial incentives for performance is really only effective in standard manufacturing environments. But the industrial revolution is over, and companies need to empower their employees so that they will be more engaged and effective at their roles.

The Rank and Yank performance management process does not inform results, and is counter-productive to fostering collaboration and productivity.

Look hard at your performance management process and aim to have frequent conversations about employee growth and development, not justifying past performance. When managers coach their employees to grow and succeed, they will be more engaged and effective in their roles.

Additional resources:  The Uncertain Future of the Annual Performance Review: A Guide For Your Company.

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Don’t Let Bias Affect Assessment Of Employee Performance

Leaders are always influenced by their personal preferences, biases that are a product of an individual’s personality, work style, and work history. A manager who spent 20 years working in startup environments might have a very fast-paced approach, while a manager with an engineering background will have preferences that lean toward detail and process.

Those preferences and biases aren’t necessarily good or bad—they just exist. People are a product of their environments, and there are successful leaders with a wide range of preferences. While it is important to embrace the uniqueness of your individual leadership style, it is critical that you do not let those preferences and biases influence the way you assess employee performance.

When Personalities Collide

Checking personal preferences at the door is far easier said than done. A leader who values process and detail will have a hard time assessing the performance of a sales rep. Why? The core competencies of a salesperson may have less to do with detail and more to do with big picture. Likewise, leaders can have an equally difficult time conducting an objective assessment of an employee who is similar to them. This “halo effect” leads managers to see these employees in a positive light, even if job performance is less than stellar.

So what should leaders do? Teams are made up of diverse individuals. There will be employees who have similar personalities, preferences and work styles to yours, and there will be employees who fall on the complete opposite end of the spectrum. How can you conduct truly objective performance reviews of these types of employees, without letting your personal biases influence the outcome?

Data: The Great Equalizer

The key to objectively assessing employee performance is diversity of input. The more data points you collect, the clearer the picture. Peer reviews are an excellent tool for helping cut through some of the bias. Peer reviews also give employees the chance to see themselves through their colleagues’ eyes, and it gives them a greater understanding of how their job impacts others.

Self-assessments can also be valuable in reducing bias. They allow employees to think introspectively about who they are and what their strengths and weaknesses are. Throughout the course of the performance review process, you, as a manager, can circle back to those self-identified strengths and weaknesses and work to see how strong and weak performance relate.

Personal preferences and biases can’t be avoided—but they can be neutralized. In order to approach performance reviews and assessments objectively, leaders must be willing to collect data from outside sources to ensure that they can conduct the kind of reviews that will help their team members grow.

About the Author: Beth Armknecht Miller is CEO of Executive Velocity, a top talent and leadership development advisory firm.

photo credit: zeevveez via photopin cc

Soul Search — Then Job Search

Written by career consultant, Maggie Mistal

Most of us assume that the best way to find a job is to look at what’s available in online listings, or to follow someone else’s advice. However, these methods often lead to unfulfilling career choices.

You only need to look at the latest job satisfaction surveys to recognize how unfulfilled most workers feel. For seven straight years, The Conference Board has reported that less than half of U.S. workers are satisfied in their careers. So what can you do to find job satisfaction and fulfillment while still making a great living?

Uncover Your Core Genius

“Core genius” is the special contribution that each of us brings to our professional life. It’s what you are in this world to do that only you can do. It’s the unique package of skills, experiences, passions, interests, talents, abilities and attitude that you possess.

Take my client Laura Rolands. Laura was a hard-working Human Resources executive at Chrysler. She’s also a mom. When Laura’s son was diagnosed with ADD (Attention Deficit Disorder), she got to work and investigated how to best help him with attention strategies at school and in life. Through this experience and through our career coaching work together, Laura realized she had a talent and an interest in helping people with attention issues.

It led Laura to start an attention coaching business shortly after accepting a voluntary buy-out from her position in the automotive industry. Her business is in a relatively new field, focused on coaching people to overcome challenges associate with ADD or ADHD (Attention Deficit Hyperactivity Disorder). Actually, you don’t need a diagnosis to benefit — anyone who feels overwhelmed or distracted in today’s hyper-connected environment will find value in Laura’s services. Her clients have developed time-saving personal routines, and have improved their academic and business performance.

The Path to a Successful Career Fit

In 10 years of coaching, I have seen that we are each uniquely built to fulfill a specific purpose. And I am proud to have many success stories such as Laura Rolands. However, too often people take their unique talents for granted. In fact, the real challenge is that most people have no idea what their purpose is. That is where I help.

I believe the best way to find your purpose — your core genius — is to conduct a formal Soul Search, and get specific about all the elements of your ideal career. It starts with helping clients assess themselves in 8 essential dimensions, as part of the “Soul Search, Research and Job Search” process I developed.

These elements include: 1) your top interests, 2) key motivators, 3) skills you want to employ, 4) ways you want to contribute, 5) best qualities, 6) best work environment, 7) activities you enjoy most, and 8) salary and benefits.

Soul Search Before Job Search

By working through exercises and self-reflection questions, we prioritize what’s most important and brainstorm career possibilities that match those elements. You can gain even deeper clarity with my downloadable (PDF) Soul Search workbook.

This workbook contains over 30 pages of exercises to help professionals uncover the eight core elements of your core genius. The insights developed from each exercise are designed to correspond with a section of your own personalized career guide. This helps you easily organize and interpret the information as the basis for brainstorming new career possibilities and making sound decisions about the best options for you.

So stop looking at want ads and instead start talking to anyone and everyone about the ways you are already of service. Carefully process all of that input, and you’ll see viable new options ahead. Take seriously the value you bring to the table, and (like Laura Rolands) believe that you can get paid to deliver it. Let others know about the high-value service you are prepared to provide. Then deliver it consistently and professionally. Soon, you’ll find you have more than enough work in your new role — and you’ll be making a living while loving what you do.

Have You Discovered Your Core Genius?

Are you in touch with your core career strengths? What steps did you take to gain that awareness? And how have you applied it to your career? Share your thoughts in the comments area.

Maggie Mistal(About the Author: CNN dubbed Maggie Mistal “one of the nation’s best-known career coaches.” A former Learning & Development executive at Martha Stewart Living Omnimedia, she is a certified life purpose and career coach who, for seven years, hosted “Making a Living with Maggie” on SiriusXM, and now airs a monthly podcast on iTunes. Maggie has been featured across major media, including NBC’s Today Show, Fox Business, CNN and The New York Times. Connect with Maggie on Twitter, or LinkedIn or Facebook.)

(Editor’s Note: For a limited time, in conjunction with her February 2014 appearance at #TChat Events, Maggie is offering special pricing for her “Soul Search” career planning workbook to anyone who mentions #TChat when contacting her. Don’t miss this opportunity to get a fresh perspective on your core genius!)

(Also Note: To discuss World of Work topics like this with the TalentCulture community, join our online #TChat Events each Wednesday, from 6:30-8pm ET. Everyone is welcome at events, or join our ongoing Twitter conversation anytime. Learn more…)

Image Credit: Pixabay

Managing Your Career: What Would Richard Branson Do?

Written by James Clear

In 1966, a dyslexic 16-year-old boy dropped out of school. With only a tiny bit of seed money and a friend’s help, he founded a magazine for students. Fueled by advertisements he sold to local businesses, he ran this bootstrapped operation from the crypt of a local church.

Four years later, seeking ways to grow the fledgling magazine, this enterprising young man started selling mail-order records to his student subscriber base. Within a year, record sales were sufficient to help him build his first record store. After two years of selling records, he decided to launch his own record label and studio.

The small recording studio rented space to local artists, including one named Mike Oldfield. This was where Oldfield created his hit song “Tubular Bells,” which became the record label’s first release. The song eventually sold more than 5 million copies.

Over the next decade, the fearless entrepreneur grew his record label by attracting bands like Culture Club, Sex Pistols and The Rolling Stones. Along the way, he continued adding businesses to his portfolio — an airline, railway, mobile phones, on and on. Almost 50 years later, his conglomerate included more than 400 companies.

That young boy who left school behind but kept starting things despite his inexperience and lack of knowledge is now a world-renown billionaire — Sir Richard Branson.

How I Met Sir Richard Branson

When I walked into the Moscow conference room, Branson was sitting in a chair only 10 feet away. A hundred other people surrounded us, but it felt like we were having a private conversation in my living room. He smiled and laughed frequently. His answers seemed unrehearsed and genuine.

At one point, he told the story of how he started Virgin Airlines, a tale that seems to represent his entire approach to business and life. Here’s what he said, as I best recall:

I was in my late 20s, so I had a business, but nobody knew who I was. I was headed to the Virgin Islands and a very pretty girl was waiting for me, so I was, um, determined to get there on time. At the airport, the final flight to the Virgin Islands was cancelled because of maintenance or something. It was the last flight out that night. I thought, “this is ridiculous,” so I went and chartered a private airplane to take me to the Virgin Islands, which I did not have the money to do. Then, I picked up a small blackboard, wrote “Virgin Airlines: $29” on it, and went over to the group of people who had been waiting for the cancelled flight. I sold tickets for the rest of the seats on the plane, used their money to pay for the charter fee, and we all went to the Virgin Islands that night.

Successful People: What Habits Make a Difference?

After speaking with our group, Branson joined a panel of industry experts to discuss the future of business. As everyone around him filled the air with buzzwords and mapped out complex ideas for our future, Branson said things like, “Screw it, just get on and do it,” closely followed by things like, “Why can’t we mine asteroids?”

As I watched the panel, I realized the one person who sounded the most simplistic is the only one who is also a billionaire. So what sets him apart from the rest?

Here’s what I think makes all the difference:

Branson doesn’t merely say things like, “Screw it, just get on and do it.” He actually lives his life that way. He drops out of school and starts a business. He signs the Sex Pistols to his record label when everyone else says they’re too controversial. He charters a plane when he doesn’t have the money.

When everyone else balks or comes up with rational reasons why the time isn’t right to move forward, Branson gets started. He figures out how to stop procrastinating and he takes the first step forward — even if it seems outlandish.

Start Now — Even If You Don’t Feel Ready

Of course, Branson is an extraordinary example, but we can all learn something from his approach. If I summarize the habits of successful people in just one phrase, it’s this — successful people start before they feel ready.

I can’t think of anyone who embodies that philosophy better than Branson. Even the Virgin empire name was chosen because Branson and his partners were business “virgins” when they launched the company.

Branson has spearheaded so many ventures, charities and expeditions throughout his career — it would have been impossible to prepare fully before launching them all. In fact, he was likely not prepared or qualified for any of them. He’s a perfect example of why the “chosen ones” choose themselves.

The Truth About Getting Started

If you’re working on something important, then you’ll never feel ready. A side effect of pursuing challenging work is that you’re simultaneously pulled by excitement and pushed by uncertainty.

When you begin a new endeavor, you’re bound to feel uncomfortable and perhaps even unqualified. But let me assure you — what you have right now is enough. You can plan, revise and delay all you want, but trust me, what you have now is enough to start. It doesn’t matter if you’re trying to start a business, lose weight, write a book or re-energize a career. Who you are, what you have, and what you know right now is good enough to get going.

We all start in the same place — no money, no resources, no contacts, no experience. The difference is that some people choose to start anyway. And only those who start can reach the finish line.

So, what are you waiting for?

james-clear-circle-250(About the Author: James Clear is an entrepreneur who leverages behavior science to help you master your habits, improve your health and do better work. For useful ideas on improving your mental and physical performance, subscribe to his newsletter or download his 45-page guide on Transforming Your Habits. Connect with James on Twitter or Google+ or LinkedIn.)

(Editor’s Note: This post was adapted from Brazen Life, with permission. Brazen Life is a lifestyle and career blog for ambitious young professionals. Hosted by Brazen Careerist, it offers edgy and fun ideas for navigating the changing world of work. Be Brazen!)

(Also Note: To discuss World of Work topics like this with the TalentCulture community, join our online #TChat Events each Wednesday, from 6:30-8pm ET. Everyone is welcome at events, or join our ongoing Twitter and G+ conversation anytime. Learn more…)

Image Credit: Kris Krug Flickr

Looking Back, to Look Ahead

I’m a big believer in looking back as an important step in dramatically improving the future. While one traditional time to take a big look back is the transition from one year to the next, why wait?

With two months left in 2010 (and holiday vacation days potentially ahead of you when you could be moving ahead on future plans), how about taking time right now to review the year so far? This will allow you to better prepare yourself strategically for 2011, making sure you’re orienting yourself for new, innovative successes when you get a running start on making them happen.

How to do your quick recap?

Go back through your calendar from 2010 to see how you invested your time, effort, and other resources. While you’re at it, take a quick look through emails, online files, or any other sources which trigger 2010 recollections. As you do this, look for events, ideas, projects, interactions, meetings, articles, lessons learned, and anything else that stands out for good or bad from the first part of the year. Ideally, you’ll have a lengthy list of items which made 2010 noteworthy.

After generating your year-in-review list, revisit the items and categorize them items using the eleven groupings below. These categories will help you think strategically about the ideas, events, projects, and lessons learned you have experienced so far this year and what they might mean in 2011:

  • All About You – Are certain ideas, causes, issues, or practices tremendously important to you and the impact you’re trying to make in the world? Find room for these before you plan anything else.
  • Life Changers – Are there BIG thoughts and ideas which could make a HUGE difference in your life five or ten years from now if you got more accomplished on them NOW? What will you do to push ahead on them right away? (And puhleeez, no excuses about why you can’t do more with them!)
  • Distinctive to You – What were the things you did or learned which set you apart? How much benefit did they create for others and for you? Will they still keep you distinctive in 2011 or could they stand some freshening up to continue to be effective?
  • Energizers – What things excited and sustained you through challenging times this year? Trust me; you’ll want some more of those things in 2011 so plan now for where they fit in your calendar.
  • Second Life – We’re not talking the online environment here. How can you take things that worked in one setting and move them into other parts of your life to also have an impact? Additionally are there things which didn’t pan out because they received only your half-hearted effort? Consider giving these another shot as well with the focus and intensity to get them really right this time.
  • Unexercised Ideas – What potential possibilities have been kicking around too long without coming to fruition? Pick one or two and give them both some attention and a 2011 deadline.
  • Teachers – Where did you learn new things this year – either formally (training, conferences) or informally (from successes, failures, etc.)? What can you line up in advance for next year to make sure you’re continuing to develop personally and professionally?
  • Life Savers – Were there ideas or people which kept you from near-term ruin (or at least from suffering a few bumps and bruises)? Think they might do it again in the future? Make sure you don’t lose track of them then.
  • Guilty Pleasures – Admit it. There had to be a few fun things this year you’re not proud to admit you enjoyed. Figure out where they’re going to fit in your future schedule because they’ll be as important to your mental well-being in 2011 as in 2010.
  • Tired Ideas – Are there strengths or techniques you keep returning to time after time that are starting to even bore you? Jettison these and replace them with something new from now on.
  • Pride and Joy – Of everything you’ve been through in 2010, what were the most significant sources of comfort, satisfaction, and smiles? Which of these things (or other new efforts) are likely to do the same for you in 2011?

If you use this approach now, you’ll have done more personal planning than most people do, plus you’ll be two months ahead of everyone waiting for the end of the year to think about the next. Give it a try, even very informally, and improve your success in 2011.