To Review or not to Review – That is the question!

By Kelli McDougall – Director – McDougall HR

As a HR Consultant who has worked with various Small to Medium businesses over the last 13 plus years, I have seen many different approaches to performance reviews or appraisals, some very very good and some very very bad!  What I have observed is that generally these annual or bi-annual reviews are met with trepidation and fear from employees and are seen as an annoying administrative task by most line managers and supervisors.

Criticisms of the traditional performance review range from a lack of objectivity, minimal relevant feedback, using reviews to determine pay rates and grades and the concept of ranking or reducing an employees work to a number.  There are polarising opinions on the subject of performance reviews and these opinions certainly make for interesting debate about their effectiveness and whether or not there is going to be a shift is how organisations approach them.

Organisations like NAB, Deloitte, Adobe and Accenture have all announced that they will no longer be using traditional performance reviews as part of their employee assessment tools.  If your organisation is thinking about alternatives to the traditional rankings based performance review, below are a few alternatives. (Hrmonlinecomau, 2015).

1. Performance previews
In contrast to one-side-accountable reviews, performance previews are discussions about how an employer and an employee are mutually accountable for the success of the company and the employee. Rather than focus on what has already taken place, performance previews involve both sides stating what they would like to happen and establishing a two-way conversation. Instead of a manager talking to an employee, allow the employee an opportunity to talk about what they need from leadership in order to excel at their work. Advocates claim it makes for a more trusting, reciprocal relationship in the long run.

2. Performance coaching
Rather than biannual or annual reviews, think about setting up regular, one-on-one coaching sessions between managers and subordinates. Meetings could be anywhere from 15 minutes to one hour, and held every month or so. The goal is to have a continuing conversation aimed at helping employees become great at what they do. Ask workers to write up a small report of where they are and where they need to be. Then, tailor each short coaching session to address these concerns and determine what metrics work best to measure performance.

3. A crowd-sourced rewards program
A crowd-sourced rewards program allows employees to anonymously gift tokens to their colleagues as recognition for outstanding work. This system measures the impact individual workers have on the success of a company and allocates bonuses accordingly. It sounds a little out there, but companies such as gaming software company IGN and Shopify have already implemented this system with great success.

4. Goal-management reviews
This method is centred around a meeting with an employee to outline his or her career goals and then formulating development programs to reach these targets. Not only does this system clarify what is expected of employees, but it also helps workers self-examine what they want to achieve and how they can get there. When tasked with monitoring their own behaviour, employees are forced to assess what value they bring to an organisation, which in turn drives their performance.

5. Non-performance based compensation
Compensation is a tricky topic to manoeuvre; when tied to performance reviews, it can make people defensive, or feel like they need to justify themselves to management. For this reason, reviews with competency ratings and employee rankings usually fail. To bypass this, you can move towards non-merit based pay where salaries are calculated based on a worker’s market value and market conditions. If you have a goal-setting process in place, you can also adjust someone’s market value by the results they achieve, set against established goals. (Hrmonlinecomau, 2015).

The key to any good performance review system is that it adds bottom-line value to your organisation.  If this is not the case then you should re-evaluate your processes!
At McDougall HR, our qualified HR consultants are constantly looking at better ways to do things and we would be more than happy to assist your organisation in formulating a review process that does add true value.
Call us on 07 4637 9500 or 07 5630 4233 to discuss how we can help.

Hrmonlinecomau. (2015, 6 August 2015). The last gasp for the performance review? – HRM online. [Weblog]. Retrieved 27 August 2015, from http://www.hrmonline.com.au/section/featured/is-this-the-end-of-the-performance-review/