The Future of Everything. Have you heard about this magazine? The Wall Street Journal publishes it monthly as part of an addition to WSJ subscription issues. It’s a real eye-opener. Look for it in mid-September and be ready for new ways of thinking, although you may resist some of its ideas. (WSJ.com/FOE)
Let’s now consider the future of a topic that several large companies are rethinking: performance reviews — that process beloved by manager and worker alike. Reflect first on the traditional model of reviewing employee performance. Then consider what is happening at some cutting-edge companies: What are the implications of the new ideas for millennials? Lastly, are there implications for you and your company?
First, what are the underlying purposes of a review of anyone’s performance, and why does a work organization care about its employees’ performance? In the eyes of top organization leaders, the review is intended to improve the performance of a worker (regardless of level) and thus improve the bottom line for the company, regardless of size.
Assuming this is true, all employers should jump on board to find better approaches to assess performance and see such efforts as an investment. Theoretically, if someone can identify a weakness in the work he or she is doing and then identify ways to improve, that person will seek to employ the learned solutions.
This would add to the employee’s self-worth (self-esteem) and, as a result, cause that person to try to do even better. However, for the above to be true, someone must notice that the employee has changed — for the better. This acknowledgment should be sufficient, but in today’s climate it may not be.
As companies have downsized during the past decade, the span of control often has increased. Managers likely have an increased number of people reporting to them. Often the work is spread out and not in a particular workspace, and this makes it more difficult to observe on-the-spot work behavior and work practices. Many times the primary indicator of work performance is a computer printout of a machine’s production or, in another scenario, customer feedback or a numerical count of “orders completed.” However, the manager needs to be able to observe to locate the underlying or root causes of good and poor work practices.
We all must recognize that long-term employees have likely learned the existing system to be either of two kinds. On one hand, you never hear about what you have done well; however, you always hear what you have done poorly.
The other common “system” is a computer-driven form that is to be checked off. The supervisor gets the form just in time to quickly mark it up and spend 10 or 15 minutes reviewing it with the employee. The employee signs the form and leaves the office. Another year done!
Regretfully, these two “systems” are all too common. They have never worked well. Employees and managers alike dread “the day of confrontation.”
Some major employers have recently come out of the closet and argued that we need a new system to replace the outdated ones and to accommodate the changing needs of employees as new entrants join the workforce.
Such companies as General Electric are moving in a new direction, according to the Wall Street Journal, although new directions were suggested even earlier by numerous university researchers. The newer ideas might be summarized in these terms: frequency, behavioral, one on one and relationship to pay increases.
It is likely that the appraisal has been conducted annually — either in December or in the employee’s birthday month. This is tradition. However, ask yourself: What will the manager recall about the behavior of an employee during the past 11 to 12 months? Perhaps managers keep a daily log of what is going well in their work unit and which employees are on target. Do you believe that? Does the current system encourage that effort?
Recent actions suggest there be more than one appraisal point. One rationale is that managers do not have the memory capacity to recall with any detail what happened earlier in the year. What would you think of having an informal performance discussion once a month? Details will be fresher — for employee and manager. Just what caused a positive outcome can be reconstructed. Yes, this will take more total time for each manager. Could it be more valuable time, compared to the current “rush to mark that form?”
For younger labor force entrants, this frequent assessment of their work likely will be well received. Millennials are known for needing reinforcement often. Their most common frustration is not having timely feedback: “How can I improve if I am allowed to commit errors over and over for months?”
More frequent feedback is essential. The manager can find the time to work with each employee; it is just a matter of the company’s priorities.
Emphasis on behavioral aspects of work performance can be included when performance is evaluated often. The circumstances surrounding poor results can be traced to errors in judgment and in follow-through. The two people can likely agree as to what happened — positive and negative. The result is a jointly prepared plan for improvement in the deficient areas.
With another appraisal in a month or two, it will be a positive experience for both employee and manager because they will be able to work together to achieve greater success. In addition, an attitude of working together to solve a problem will develop greater motivation for both parties.
What is being measured by your current system? Chances are there is a standard set of metrics that may not relate to the tasks to be confronted by each employee. Certain data will be collected, and yet the collection may prove of minimal value if the reason for the performance appraisal is truly to improve performance and to affect the bottom line. Does the system allow for addressing specific behavioral issues to improve the current system?
Changing a performance appraisal system faces many challenges. It can be a slow change. “We have always done it this way.” You have heard that before.
Many senior managers like the ability to look at quantitative analysis: Who can question the numbers (even if they were forced into fixed categories)? We have seen this change during the past 25 years in business education, as quantitative perspectives have grown to dominance.
Is your appraisal system used to determine pay changes? Likely there is a tenuous relationship. You find yourself modifying results to reward better those people who did not rate as high as last year. Over time, the rewards equal out. Yet the more productive employees are not really being recognized for superior performance. The more current thinking would allow you to document in dollar terms the changes each employee has made in the departmental bottom line. The best among the best can better be documented.
With the current business trend of minimal pay increases, the rewards of being among the best can be highlighted. Yes, this does depend on the overall company compensation plans. However, the mere regular interaction between the manager and the employee has the potential of improving the bottom line, and that can be a strong motivator. We can look at the pay system itself in a follow-up discussion.
Can you make a change in the way you evaluate work behaviors and outcomes? Can you and your new continuous improvement emphasis be the catalyst for improving the bottom line?
Jerald F. Robinson, Ph.D., is professor emeritus, international management, at the Pamplin College of Virginia Tech in Blacksburg, Va. He can be reached at (540) 449-5870 or by e-mail: JFR@vt.edu.
This article originally appeared in the September 2016 issue.