How to make the transition to no more performance ratings – successfully.
If you’re considering saying bye bye to the classic performance rating system, you are not alone. You can read here about the findings of many companies who have already made the same move.
It’s not surprising that this has been a popular move because who has ever really enjoyed rating or being rated? At some point it becomes an awkward conversation.
Congratulations – you don’t have to go through that anymore! But what do you do instead? And how does that make things better – for you, your team and your business? Here are some top tips from our experience with helping managers make this transition, backed up by neuroscience and research from the CEB and NLI.
Explain the change
We know that change can be difficult, particularly when we can’t see why change is happening. Our brains like certainty, predictability and safety in knowledge, so not knowing what’s happening, what that means for me, what might happen next – and all the other usual hallmarks or organisational change, can lead us to unrest and panic. Explore for you personally and the business overall why you are moving away from performance ratings.
You could even remind people how awkward these conversations have been in the past, so it is a good thing to remove a painful and potentially unhelpful process. Have you and your team been more effective and produced better results in the lead up to and just after that rating conversation? If not then surely this is a good reason for change.
This leads us on to the future focus. If we understand why what we had before is not so good, then we ask, “What is better then? What will we do from now on?” You need to be ready for this question and have some good ideas.
Or if you want to be truly collaborative, you could ask your team: “We think there must be something better than this awkward ratings conversation, but we’re all involved in this process, so what do you think could work better?” Being involved in shaping the future process increases engagement in both business and neurological terms – we both feel good about our employer and feel valued in ourselves, all having a positive impact on the way we feel and our productivity.
If you don’t have the option to be so collaborative, perhaps because your HR or Executive Leadership team have already agreed what will happen instead, then explain the new process. Make sure you explore with the team why this new process is considered to be better and ideally still ask them to define part of it.
Even a small amount of consultation and empowerment to make decisions keeps our brains happy, so this as an example could get you a more positive outcome than having no consultation at all: “We know we need to have more frequent performance check-in conversations and these need to happen every other month. Which months would you prefer these occur in? And when in the month would be best for you?”
Have the conversation more often
The increased frequency of conversations has been found to correlate with organisations seeing success from this transition, as found in the NLI’s research. It stands to reason that the removal of a past-focused once or twice a year rating process, if replaced with nothing, could just mean that performance goes nowhere.
Getting rid of hours spent justifying a rating is best seen as an opportunity to have more frequent ‘check-ins’ – shorter, sharper conversations about an individual’s results and behaviours. This means as managers we need to be putting time aside for these conversations, whether face-to-face or remotely over the phone / skype etc. As I often say on workshops, this is not about finding more time for conversations, it’s about taking the time you already spend in conversations – and making that more effective.
General chit chats about how things are going, moaning about systems, politics and red tape, are not a good use of our time. So instead make sure you have 1:1s booked in with the specific purpose of reviewing what is going well, what needs working on and how the individual will be working on that over the next few weeks.
Give more specific feedback and coaching
Of course all of that means you need to be confident and skills with feedback and coaching. Here’s a starting point suggestion for a good conversation or performance check-in:
The purpose of this conversation is for us to both be clear on what’s going well, what needs improving and what each of us will do over the next few weeks to make those improvements. That means we should be ending this meeting with agreed actions and timescales for review
- How are things going for you?
- What’s going well?
Add your specific feedback on what you have seen them do well – both in terms of results and the behaviours that got them there.
- What needs further improvement?
Add your specific feedback on what you have seen them do not so well – both in terms of results and behaviours.
- What could you do over the next few weeks to make more of what’s going well and improve on the other areas?
- Where will you start?
- What support would you like from me?
- When we next meet to review progress on [date], what will you be telling me then – as an indicator of success?
Use statements and questions like these to keep the conversation focused and make sure it is the individual planning their future success, rather than justifying their past performance.
This level of coaching or empowering someone to come up with their own feedback and solutions, is shown in our brains to make us feel good about ourselves and help us commit to the plans agreed. Being told what to do and how to do it just doesn’t cut it, so sense-check you’re doing this well by reviewing who did most of the talking during your meeting: it should not be the manager!
Any change is going to feel uncomfortable, because we’re not used to it yet. Even the best things we’ve ever done feel unnatural at first as we get used to them. Clear communication about why we’re changing, what we’re changing to and how that’s better, following by more frequent check-ins with good feedback and coaching – all of this can help you instil a great performance culture – minus the ratings!
If you would like support working out how to implement a no-ratings approach, we can help with on-the-job quick reference guides, workshops and online learning tools – just give us a call for a chat about how we can help you.
Why the world is falling out of love with the Annual Performance Review and its ratings.
Ahh. The Annual Performance Review. We’ve all had one and all left one feeling vaguely worse about ourselves and probably demotivated as a result. It’s also quite likely you’ve been on the other side of the table too – having had similar feelings. In many ways, Annual Performance Reviews make sense.
In business we crave the ability to quantify everything, from our sales targets to the number of toner cartridges we use. Why shouldn’t our people be the same? The ability to rank our employees in a given context and to assign performance-related perks (or not) has been the bread and butter of the average HR department for decades. Where would General Electric and Jack Welch be without them?
So why are a growing number of high profile, global organisations including Amazon, Microsoft, Accenture and even General Electric themselves, moving away from the fixed rating, yearly performance review?
To begin with, the world doesn’t work to yearly cycles anymore, it may well do for senior managers, investors and your finance department – but for those of us on the frontline we have daily, weekly and monthly goals to achieve – things we quite often receive instant feedback on. We inherently know (or at least we should do!) what our performance has been over any short time period, so why wrap it up once a year and look backwards?
When Deloitte analysed their performance processes, they found employees and managers spent around two million hours a year on performance reviews (take the average hourly wage at Deloitte and times it by 2 Million – that’s a big number). Do we know we’re getting good value out of this time?
Initially designed to help managers coach people to better performance, most appraisal meetings fall into a rut of ‘what you did well over the past 12 months and what you didn’t do well’. In today’s corporate environment, assessing, addressing and rewarding performance once a year is simply too slow – both for the business and for the employee.
Which leads us to the second part of the answer: millennials. David Rock and Beth Jones, writing for the Harvard Business Review about their research on this move to abolish ratings, comment that:
“Millennials in particular crave learning and career growth. Of the 30 companies we studied, one preliminary finding that jumped out was that after a company removed ratings, managers talked to their teams significantly more often about performance – three or four times a year instead of only once.”
A growing number of your workforce will have grown up with the ability to give and receive feedback instantly, frequently and whilst mobile.
The nature of that feedback has changed too – the problem with many appraisal meetings is that much of the time is spent talking about the ratings themselves, not the underlying performance. Millennials are far more comfortable asking the question why. They don’t simply want a star or a thumbs up on their rating form, they want to see constructive feedback.
If a manager is unable to give them this guidance and coaching – in real time remember – then the manager is no better than a troll on YouTube.
It’s also the case that the familiar incentives don’t always encourage the best employees anymore, so we’re required to offer more tailored feedback and customized work arrangements for our top performers. Companies that are removing ratings are seeing the conversations with their employees move from justification of past performance to conversations about growth, development and by extension – engagement.
All of us as managers need to stop getting stuck in processes and reviewing what is in this day and age, the ancient history of work performance 12 months ago. We need to instead focus on instant, specific feedback so that everyone knows when they’re on the right path – and how to make positive change when they’re not.
But does it work? The CEB and the NLI have been researching companies who have made the move already and there are mixed results. CEB claims that most experiences are negative after the removal of ratings, whereas the NLI describes very positive outcomes.
In the conversations we are having with clients taking the option to say goodbye to the rating system, there is a constant theme of concern over the organisation’s readiness. Are managers aware of what they will be doing instead of discussing ratings? Are they ready for that? If this means more frequent and specific feedback, do managers have the skills and confidence to do that well?
The NLI have found that the most successful transitions have been where the business has lead strong change management communication on why this is happening, what it means for everyone involved and how people will be supported through it. These businesses have also focused on increasing the frequency of performance conversations and moving the discussion from looking at the past to looking at the future.
It’s not a big stretch to see how the neuroscience literature supports this – as any change brings uncertainty unless there is an increase in strong communication focused on the why question.
In our next article we explore how you can do this well too…
Should we put candidates under extra pressure at interview?
Is that a good way of assessing how well they deal with pressure in the job? Is this also an assessment of their leadership potential?
This is a question we get asked a fair amount, because it is often a requirement of the job for people to cope well under pressure. Our response, as usual, is a few more questions.
- In what context is the person in their role likely to be under pressure?
- What might the experience be like?
- How can you simulate that particular kind of pressure in the assessment process?
- What does a good response to that assessment look like?
These questions are critical because they can unearth different assumptions from each of the people involved in the assessment process. In one example we heard that one assessor thought the candidates needed to remain calm and smiling whilst being fired quick and difficult questions, whereas the ultimate decision-maker was looking for someone who would take charge of the situation and ask the interviewer to ask one question at a time.
This highlights how we can come into a process all wanting different things – and of course the outcome can be a fair few arguments in the wash-up session because one person thought the candidate responded well under pressure and another person thought they did terribly.
Let’s explore each of the questions in a bit more depth:
In what context is the person in their role likely to be under pressure? What might the experience be like?
There is a difference between responding well to a tight deadline and dealing with a really difficult customer. How we cope under pressure is not consistent across different types of pressure. Have you ever met someone who works well against a deadline, yet cannot speak confidently to an angry person?
Or have you come across someone who falls apart when there are too many things to get done, yet they seem very happy and open discussing that with their manager or team? These are examples of the fact that we each respond differently to each kind of pressure. So we need to understand the kind of pressure a candidate might be under in the actual job, in order to assess the right kind of behaviour at interview.
How can you simulate that particular kind of pressure in the assessment process?
Once you know exactly what behaviour you are looking for, you are better able to design an assessment or interview process that measures this. If it’s deadline pressure for example that you need people to cope with, then you could ask the interview question, “when have you dealt with a tight deadline?” or you could set up an assessment exercise where the time is tight and see how they cope.
Alternatively if you were more interested in how candidates cope with difficult customers or high pressure client meetings, you might have an exercise that replicates this context or ask, “when have you been in a high pressure client meeting?”
What does a good response to that assessment look like?
With any of the examples above, it is critical for there to be agreement on what a good response looks like. This is how you can be sure that five different assessors are all using the same criteria to make their recommendations.
Ideally make some notes on what a great response, a good response and a not-so-good response might look like, so that there can be consistent rating of behaviour, rather than a subjective evaluation of “I don’t think they handled it well.”
The point with all of this is that we each have different ideas of what we’re looking for, so we need to get all that out in the open if we are going to be able to trust others’ evaluations and comments.
If you would like support with your interviewers or hiring managers, helping them ask great questions and interview effectively, do get in touch. We’d love to see how we can help.
How We Go About Improving the Value Add of Executive Coaching
Whether we’re coaching one senior executive in a firm or a whole leadership team and whether we are the sole coaching provider or one of many, there are some consistent ways of working that help.
We’ve put together this useful little guide to help you understand some of the key steps to successful executive coaching.
Click on the image and the magic will happen.
Continuing to assess the impact from the referendum
The past few weeks have brought new meaning to leading through uncertainty. With changes in government, low confidence in the UK economy, fluctuating share prices and the appearance that we are talking ourselves into a recession, how can any of us cope and perform at our best?
Recent research carried out by Credit Suisse suggests 49% of FTSE 350 boards in the FT–ICSA Boardroom Bellwether survey did not put a plan in place to cope with a Brexit outcome. So what can we do to help?
In this article we’ll explore the ways different businesses are responding to the current situation, offer some tips from the research on resilience and leave you with the reminder that your mindset is critical for your success and mental health.
Many anecdotal stories emerged from the last two economic contractions, indicating that the strongest surviving companies were those who maintained focus and continued to invest in advertising and people development.
In a Harvard Business School study of three recessions, it was found that “firms that cut costs faster and deeper than rivals don’t necessarily flourish. They have the lowest probability—21%—of pulling ahead of the competition when times get better.” “Companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession.” You can read the whole study here.
If you’re not in a position to make or influence decisions about the direction the business takes post-Brexit, what can you do? Developing your resilience or ‘bouncebackability’ can be critical for staying effective and focused no matter what life throws at you.
One of the critical aspects of resilience is self-belief – slightly different to self-confidence, self-belief is the sense that you can cope, you will survive and life goes on. Why is self-belief important for resilience? Without self-belief we can feel helpless in the face of difficult and challenging situations that occur. We can be afraid of the future, worry that things will be impossible to overcome and feel frozen into inaction.
However, if we believe that we have the skills and resources to deal with these situations, we will be willing to tackle the challenge head-on, focus on the outcomes we want and persist towards that outcome even when things get difficult. So how can people develop self-belief?
Remember where you have coped before
We have all faced challenging situations before – and we’re still here, still breathing, still getting on with things. Think back to the difficult things in life you have overcome. When has life been hard and you have managed to survive and maybe even thrive afterwards? Remembering that we have coped before can boost our confidence that we can cope again – building that belief in our ability.
Set goals and achieve them
A key way to develop self-belief is through ‘mastery’ experiences, ie setting yourself goals and achieving them. In relation to resilience this means learning you can cope with unexpected situations. By putting yourself in situations where you have to use your coping resources, you will learn that you are capable of dealing with these situations.
Identify and observe role models
Identify people who are able to cope with challenging and difficult situations easily. What do they do and what can you learn from them?
Find a supportive coach or mentor
A key element of building self-belief is being encouraged by others and having them acknowledge your achievements. Identify someone who can support you and mentor you.
Challenge your own limiting beliefs
Our belief in our ability to cope is often limited by our beliefs about ourselves and our own capabilities. It is important to challenge and question these beliefs, as it is often only these beliefs that hold us back. The first step is identifying them: what statements do you tell yourself over and over? Things like “I could never cope with…,” “I’m not good enough for this job,” “I can’t do this” and “I could never do this job if…” are common limiting beliefs. We state them in our minds like they are facts.
Make a list of the most common things you tell yourself that fit into this category of sounding like facts, yet are really more beliefs about your ability.
The second step is to challenge these statements. Are they facts? For each one, ask yourself whether this is true, false or cannot say. What evidence do you have that this statement might be false? When we say things like “I always fail” or “I never do well at…” the fact is that we will have evidence to the contrary. We will of course sometimes fail, but we sometimes succeed too. Challenging these limiting beliefs and creating new beliefs for ourselves can be critical to our self-belief.
What if we changed “I always fail” to “Sometimes I do well and I want to do everything I can to make sure this time I do well too.”
Each business is reacting differently to the changes the UK is experiencing at the moment and that uncertainty will continue. Looking at building resilience and self-belief – for yourself and your people, is a critical step towards surviving and thriving today and tomorrow.