In the past several decades, and particularly in the past few years, many forward-thinking managers have come to the conclusion that traditional yearly performance appraisals are a waste of time at best, or a net negative to morale at worst. This is a philosophy supported by many bright management thinkers, including W. Edwards Deming:
Evaluation of performance, merit rating, or annual review… The idea of a merit rating is alluring. the sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.
Bob Sutton and Huggy Rao, authors of Scaling Up Excellence, wrote in their book about Adobe’s experiences eliminating yearly performance appraisals from their organization:
Since the new system was implemented, involuntary departures have increased by 50%: this is because, as Morris explained, the new system requires executives and managers to have regular “tough discussions” with employees who are struggling with performance issues—rather than putting them off until the next performance review cycle comes around. In contrast, voluntary attrition at Adobe has dropped 30% since the “check-ins” were introduced; not only that, of those employees who opt to leave the company, a higher percentage of them are “non-regrettable” departures.
Clearly, many managers and their organizations have found annual performance reviews to be an ineffective tool for managing teams. But what if we took the annual performance review, and were able to humanize it as a tool for good?
Retrospectives: a human approach
Performance reviews are a terrible source of anxiety and stress. A year’s worth of judgment, and the consequences of that judgment, are compressed and handed down in an instant. It’s often as nerve-wracking for the manager as for the subordinate.
So, when I worked as a manager, I used my annual meetings to do something slightly unconventional: to forsake any judgments or value propositions, and instead remind my staff of their accomplishments over the last year. An anniversary, if you will.
In technology, we rarely get the opportunity to think in time periods greater than a few months. If you work within an Agile shop, you might think in two-week sprints. A year ago is a world away, and for someone mired in a difficult project, it might be difficult to slog through the impostor syndrome and remember all the things you did for the organization. We can’t always see our professional development at a macro level, and an outside perspective with a long view can help figure out where we’re going.
The goal of management should be not just improving short-term productivity, but to align the company’s goals with the career development goals of its employees over the long-term. Removing annual performance appraisals is a great step towards removing unnecessary stress from the workplace, but aligning employees’ career goals over the long-view is still crucial in maintaining an effective team.