Manage Expectations, Not Performance
Congratulations! You’ve received an average of 3/5 on your performance review and you’re meeting expectations. Employees who receive a 3/5 will receive the standard 2.75% raise this year. While most employees meet expectations, we are expecting you to go above and beyond if you ever want to get promoted or get a larger raise. Keep up the great work, we’ll talk again next year!
If the message above gave you the heebie-jeebies, read on.
Performance Reviews have been around since WWI, and while the majority of employers have adopted them, only about a quarter of employers have found a way for them to be effective (HR Brew article on the history of reviews, give it a read if interested!).
Why aren’t we doing a great job of evaluating and improving our team’s performance? Welp, here’s my take:
1) We work in rapidly changing environments. Some so rapidly changing that the role you were doing 3 months ago is not the role you’re doing now (particularly among smaller teams). So what are evaluating performance against - the job description created at hire, or the actual company needs that this employee jumped in to fill? Also we all know that JD was really a job ad, not a comprehensive overview of expectations…
2) We’re not setting goals or expectations well. Often not setting expectations at all. I’ve had employees ask me, while completing their self assessments, how to determine whether they went above and beyond since they’re not sure what the baseline is.
3) We’re trying to do too much with performance reviews. Currently, we’re reviewing past performance, determining bonuses for past performance and increases moving forward, talking about their career goals and how we can help them achieve them, setting goals for the quarter/year, and talking about what we need to see from the employee to hit these goals. That’s a lot for a few pages of a pdf and one hour!
What do we do instead? Here’s a few ideas to get started:
Decouple compensation & performance & goal setting conversations. Try to tackle each issue directly with the best possible tool, no more trying to solve every problem with the same rusty screwdriver.
Keep the JD for hiring - accept that it’s a job ad and leave it at that.
Keep performance reviews focused on celebrating achievements along with reviewing company, role & personal goals and what needs to change to achieve them.
Ensure your compensation philosophy is tight and objective - base salaries reflect the role, though there are bonuses and other tools that can be used if you’re looking to pay for “performance” or competencies (make sure you define these well if you’re looking to use them!).
Instead of using annual reviews to manage performance - manage expectations on an ongoing basis:
Co-create between manager and new hire an expectations doc at hire. Here’s an example - an expectations doc clarifies ownership areas, role approach (behaviors and values you’re expecting to see), SLAs/responsiveness, goals/KPIs, and dependencies/needs for success.
Make this a living doc - since roles and goals can change, at any time if either the employee or manager feels there’s a mismatch between the doc and reality, we revisit together (time: ~1hr/quarter/employee).
Impact:
On the employee side - this clarifies that they’re spending their time working on the right things in the right way. Folks want to do a good job, make it easy for them to do so.
On the manager side - this can be part of a process that replaces the dreaded Performance Improvement Plan. Step 1: reset expectations, step 2: give feedback on where expectations are not being met step 3: monitor and work with your People team if you’re not seeing results.
Let’s make sure we’re using the right tools to make it easy for employees to shine and thrive - not just the tools we’ve always been using. And if you need help figuring out how to execute at your organization, reach out!
