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…
Can games engage, retain and train talent?
There’s a lot of noise about gamification, serious games and playlists. What do these mean and how could these concepts be useful for us in talent, learning and assessment?
The Learning Technologies event is a great place to hear about current and future developments in the world of interactive learning and assessment. Whilst the definitions and usefulness of gamification varied slightly according to which exhibitor or seminar speaker we spoke to, there was some general themes which we found really helpful in understanding the difference.
Gamification is about taking what we already have and making it more like a game – ie “gamifying” something. This has its roots in the unconscious drivers that motivate a lot of our behaviour – like a need to achieve and peer comparison.
If I’m on an elearning system and I can see I’m 48% of the way through a course and my peers are at 88%, there’s a good chance I’ll feel motivated to do more of the course. Likewise if I’m awarded ‘badges’ or points for completion and passing confirmation of learning tests, this is likely to prompt an unconscious feel-good factor of achievement.
Many Learning Management Systems or elearning providers already have all this data – so by making that data public, and displaying it like game statistics, there could be some benefits to you motivating people to complete your online learning.
But be warned, there are also some big watch-outs with this idea. First off, people are quick to feel patronised and this is a big switch off – so be careful with badges and achievement points, that people don’t feel like they’re being treated like children. “Woo hoo you scored 5 bonus points for ticking this really boring health and safety box” is not likely to be motivational for people.
Duolingo and Headspace are known for their easy-to-use, somewhat childlike (but nobody seems to mind) completion % markers, daily practise streaks and comparisons with other users. Maybe this works well because users have chosen to complete the learning, so this gamification encourages them to keep going. Whereas in a business setting, being told we need to complete online learning puts us in a different mindset.
The combination of being told we must do something, then seeing childlike points and badges that we view as patronising, could be a recipe for disaster, resulting in non-completion and low engagement.
In the wider context of the challenge: Stop your elearning – you could argue this is all a moot point. However there does appear to be some benefit in acknowledging those unconscious drivers of need to achieve and peer comparison. If we all stopped sending out system, process and compliance elearning courses, and engaged people in a daily learning practice to help them do their jobs, then our offering would be more like Duolingo and Headspace, and it could be worth us adding in the gamification elements.
But as it stands right now, we risk simply adding to the feeling of being patronised.
Serious Games are a different animal. Whereas gamification is taking what you already have and ‘gamifying’ it, serious games are the creation of an adventure or experience, which has a learning outcome and useful result.
Take for example a project management game, which might look like any other X Box adventure, but challenges the user to engage principles of best practice project management. This provides a safe environment for application of learning and practice.
You could therefore consider adding serious games into your learning journey. Common sense, Kolb’s learning cycle and even Kolb’s critics all point to the importance of practice when it comes to embedding learning.
The best option is often to just get right into the day-job and use what you’ve learned, try it out, then reflect and work out what to do better next time. But that’s not always possible or attractive. What if I’m learning how to deal with a certain kind of crisis that is extremely rare? Or what if I’m learning a skill that I might consider risky to try out at work? Even coaching skills can feel scary for managers trying it out for the first time, as it can be such a departure from what the team are used to.
So perhaps serious games – just like scenarios, role plays and practical exercises have historically done in learning – give us an extra opportunity for practising new skills. And the benefit of serious games online, is that like the X Box game, you can be anywhere in the world, playing a leadership or teamwork game, together.
An interesting reflection may also be how these games could be used for assessment. Many firms are wanting their assessment and selection processes to be different, more engaging, reflecting a more 21st Century employer brand – so could we add in serious games? It certainly seems like the potential is there, for a game purposefully designed to test leadership skills, assessors can observe behaviour and see how people really react under pressure.
So whatever way you look at gaming applied to talent assessment and development, there’s no doubt there is value in the idea. Perhaps like all of the messages we heard at the Learning Technologies event, they key is to make sure you get the result you’re after, rather than simply run toward the latest fad or gadget.