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January 29, 2015 // 7:00 AM

Ditch the Annual Review to Improve Employee Performance

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None of us like to give them or be on the receiving end of an annual review -- especially if we are given less than stellar praise. It’s rare for a person to come out of a review with the feedback they need to effectively motivate themselves to do a better job. And agencies, in general, do a poor job of providing real-time feedback to their staff and teams. When feedback is only given once a year, we tend to nitpick on the past, avoid real conversations, and give little insight on what someone can do to improve in the future.

I think there is a tendency in ad land to use the annual review too often to either to justify a promotion or increase in pay (or lack thereof) or to document a person’s poor behavior for future “right-sizing” of the individual.

Neither reason is very noble.

Why Do We Have Annual Reviews Anyway?

Well, annual reviews are from traditional top-down organizations where historically, the goal was to get rid of the bottom performers and reward high performers with more money or a promotion. 

The goal of performance reviews has always been about bettering the company, not the individual. The reality is that the traditional performance appraisal process is limited in its effectiveness, and if you tie reviews to discussions about raises, that’s all an employee is going to get out of the process.

The truth is, employees crave feedback; they want to know how well they are doing and where they stand in the organization. As employers, we should be providing meaningful feedback on a regular basis, not just once or twice a year.

The Challenge of Creating an Effective Review Process

Time is a big factor. Building a solid performance program means carving out valuable hours. Part of agency culture is having managers who are out there in the trenches with the staff. I think we can all agree that as an industry, we simply don’t give our managers time -- time to take the lead to manage and advocate for individual performance and learning.

Our team structures are another factor. Gone are the days of people working under the close eyes or mentorship of department heads. Teams are now made up of many different specialists. When you are working in teams, you don’t interact with a functional or department manager that often.

We also tend to concentrate on project success, not individual team member growth. If we do peer reviews in teams, we run the risk of comparing one member to another, even though the two may have very different skill sets. This makes no sense. In a collaborative environment, it’s important to encompass many different viewpoints. Rating one individual as more important or superior than another can undermine the creative process.

It’s often the quality of team management itself and the project environment, rather than individual performance, that makes a project successful. You can be great at what you do, but if your team or project has poor team leadership that causes it to crash, it can be hard for people to disassociate the two.

So what are we left with? Department heads who may not know how well their people are really working, managers that haven’t been trained in giving a review, and team leaders who are more concerned about the project, not individual growth.

I think this is partially why employees dread walking into the room and sitting down with a department boss they rarely talk to for an annual exercise. I also think this is why some agencies have given up on addressing performance issues with their employees.

Why You Should Get Rid of the Tradition

At the extreme, poorly run performance reviews can be toxic if they are viewed as being about power and subordination. They send employees the message that the boss’s opinion, not their performance, is the key ingredient of pay, assignment, and career progress. 

And nowhere does irrelevant criticism appear more frequently than in performance reviews of employees. Unfortunately, we are hardwired to the way we react to criticism, whether it be negative or constructive, so even your top performers can be negatively affected by a few wrong words.

This doesn't mean we should stop the conversation; it just needs to move to a two-way conversation. 

To be in an open, receiving state of mind, the feedback must be perceived as positive by the receiver; even a poorly performing member of the team can benefit from a process focusing on self-awareness and self-discovery. Leaders in agencies need to abandon a review system that is not only dysfunctional but doesn’t recognize real constructive ways of improving individuals and teams. 

What we should be focusing on is less feedback that may not hold relevance six to twelve months after the fact and more talent planning and learning. As a creative industry, we like to hire young, and our needs for hiring for new skills is ever increasing. Yet, we seem to invest very little in onboarding, training, or knowledge development. How can we meet our agency goals if we don’t invest internally in building our own people?

If you want to get rid of ineffective and harmful reviews, consider replacing them with these seven activities:

1) Concentrate on behavior improvement, and take bias out of the conversation.

Performance planning is the alternative where a manager coaches an employee on a regular basis toward preferred, on-the-job behaviors and shared goal setting, rather than just discussing a person’s performance after the fact. The planning process starts with a meeting between the manager and employee to discuss ways they can work together as partners to accomplish goals that benefit the agency and individual.

Prior to starting the planning process, the agency needs to establish competency-based job descriptions based on increasing a person's competency in certain skill areas. Competency-based job descriptions focus on what behaviors an employee exhibits that show he is capable in a certain skill area. Competencies are also broken down into proficiency levels (beginner, intermediate, expert, and mastery) so an employee’s knowledge can be assessed.

Once you and your employee are on the same page on where he falls in his proficiency level, you can work towards addressing improvements as it relates to behaviors he needs to exhibit to master each competency. Competencies can be skill-based, such as learning CSS, as well as general areas, such as interpersonal communication, leadership, initiative, and teamwork. 

Together, you build shared goals, which can be learning- or agency-based. During the meeting, you describe the actions the other person can and will take to accomplish goals. In later meetings, you now have the ability to concentrate on giving feedback as it relates to specific job skills.

2) Focus on building shared goals and shared values through ongoing conversations.

The planning process will do you no good unless you commit to long-term coaching, mentorship, and self-education. This builds employee engagement by focusing employee and supervisor efforts on setting and achieving shared goals. Create a document where you can plan and document weekly, monthly, and yearly efforts that focus on shared goals.

Once you have a plan, it’s easy to track an employee’s goals. Use this document as a collaboration tool.

3) Change the tone and reason why you have reviews.

One of the reasons direct reports really hate reviews is that they feel they have no control over what’s being said or the agenda. If you build shared goals with performance planning each time you meet with an individual, you have a reason to meet.

A solid, up-front contract relieves a bit of anxiety about what you are going to talk about. It also sets the stage for two-way conversations that focus on behaviors, not (perceived) personal attacks. Focus the participant's mindset from what’s going on now to what can be -- go from a session focused on the negatives to one that has positive connotations and outcomes.

Put yourself in your employee’s shoes: would you rather be yelled at, given after-the-fact commentary, or ultimatums? Or would you rather have timely, relevant, and constructive feedback that focuses on realistic activities a person can do to improve? 

4) Understand your employees' communication styles, as not everyone absorbs feedback the same way.

As a manager, you have your own unique way of communicating; however, chances are your direct reports communicate and listen differently. Any conversation that you have with your employee on behavior or performance can be emotional. Different people listen and take in information in different ways. How well you communicate with each other can help lower the emotional state. For example, if you are direct, to-the-point, and only want to talk about results, while the employee wants to dive into granular details, I imagine you will both will leave the conversation dissatisfied.

Using a behavioral assessment communication tool like DISC will help you understand how you and each of your employees communicate and how you can modify your style so your suggestions for performance improvement actually get through to employees.

5) Feedback given or received from an employee should never be once a year.

If the only feedback on your own performance was once a year in a 45-minute meeting with your boss, think about how you could possibly sum up the additional 99% of the time you spend at work. Timely, positive feedback that is authentic in nature can make a world of difference to your employees. The workplace is one of the most feedback-deprived places in modern life, and it really doesn’t have to be that way.

No one wants to discover in his annual review that he screwed up a project four or five months ago. If you discuss with your employees their behaviors, strengths, and weaknesses on a frequent basis, it should be no surprise.

If you aren’t transparent about your feelings towards an employee or don't provide real-time feedback that is constructive, you are doing a disservice to your agency. How many times have we seen how a lack of transparency and feedback has created situations we later wished we could have avoided? 

Performance planning sessions help you work with your employees to adjust their strategies in reaching goals and working with others.

6) Improving individual performance builds organizational performance.

As an organizational development specialist, I’m always looking at how organizations work, especially through the systems they employ. Organizational theory tells me an employee’s performance is always based more on the system they are working in rather than their own individual actions. 

Significant performance increases or decreases are not under the employee’s control but rather those who have control. This means that if employees aren’t doing so well, we should look to the system they are working in first.

Performance planning sessions, reviews, or on-going internal coaching or mentoring sessions should be seen as opportunities to improve the system as well as the individual. Here you have the perfect opportunity to find out what people like about their job, what they are proud of, and what things they are doing to make (or could make) their work environment better.

Use this as an opportunity to figure out what is inhibiting people from doing their best and what you can do to help by changing the system.

7) Discover the missing dimension in evaluating your agency performance.

We’ve talked a lot about evaluating individual and overall system performance, but there is another dimension to improving performance besides agency leadership. How we evaluate and reward teams presents its own unique challenges.

First, it’s important to develop performance goals that are equal to all members of the team. This helps ensure that all team members are aligned and share team goals. 

Pay attention to how you form teams and how they are managed in the agency. Find ways to bring together specialists in your agency to share team learning and assist in problem solving and mentoring.

Even within a team we still need to honor and respect the individual’s goals and development path. Individual team members should not be penalized for individuality. We should value personal traits and behaviors and look to build diverse teams that value collaboration. If people are a poor fit, there may still be a team in the agency that works for them.

Drive Your Agency's Performance

Evaluating performance in your agency doesn’t have to be challenging. In looking at performance of an individual, focus on creating an environment that is positive and forward-thinking. At the same time, if something needs to be said, don’t wait to say it. Performance planning holds people accountable to shared goals, and builds learning into your organization in a focused manner.

Think of individual performance planning as an opportunity to look at the entire system -- as a planning mechanism for what you can adjust and improve upon across the agency. Realize that the work being done in teams is more relevant to how agencies perform rather than individual failure. Your employees are what makes your agency special. Invest in them to meet your agency’s goals.

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Topics: Talent & Recruitment

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