One of the most daunting tasks for new leaders is the first annual performance review of their team. Let’s set aside the usual laundry list of reasons why annual performance reviews are ineffective including the cumbersome talent management systems used to track them, the fact that the goals were set and forgotten a year ago, and time it takes to complete the process. The most frustrating part of it all is that they really don’t matter.
A colleague of mine shared her first performance review experience as a manager:
HR Rep: I see that you rated most of your team members as a 5 for “Exceeds Expectations.”
New Manager: That’s correct.
HR Rep: How did they all exceed expectations?
New Manager: They all exceeded their sales goals and contributed to the organization in meaningful ways.
HR Rep: Right, but did they really Exceed Expectations?
New Manager: I think so. How do you define Exceed Expectations? What am I missing?
HR Rep: Let me put this a different way. If you assign a 5, the employee expects a bonus or raise and we have not budgeted for raises or bonuses for this group.
New Manager: So, what are you asking me to do?
HR Rep: Everyone gets a three. They met expectations.
From that day on, this manager told her employees not to spend more than 5 minutes on their self-reviews because they didn’t matter anyway. It was an exercise in paperwork. It was a game. And the game was rigged.
Everyone gets a three.
Annual performance reviews may be a fruitless obligation for managers, but that doesn’t negate the real obligation to provide meaningful feedback, rewards, constructive criticism, and development opportunities for all employees all year long.
There’s nothing magical about December. Waiting until December to correct unproductive behaviors is cowardly and damaging. Waiting to reward positive behavior is equally dangerous and destructive. Delivering frequent, consistent, objective, goal-driven feedback on performance all year long is the only way to reward and motivate behavior. And that is the performance review obligation that really matters.