Key Point: Traditional human resource practices are subject to the staggering disruption and transformation trends that are squeezing the core business of most organizations today. Chief Human Resource Officers (CHROs) and their teams better be at the front end, and leading meaningful change rather than simply responding to the often “too late” insights of operating leaders. Why? Culture leads strategy, and if the culture isn’t agile enough to embrace the rapid changes demanded by the business, execution is impaired. So the leading and best CHROs are trend seekers and result drivers in their own businesses. That obviously means being in front of social, customer and technology waves. Having been directly responsible for profit/loss during much of my career, I understand how important it is that CEOs or head operating roles need CHROs to be “wing” leaders rather than the maintenance department of the “C” suite. Every part of the employee journey and culture is getting reshaped, and what happens at each step of the employee experience can and will actually shape what happens with customer experience and financial results. The annual performance review is an example of a leadership and people practice that is (finally and thankfully) being transformed in most organizations.
A great article in the Harvard Business Review by Peter Cappelli and Anna Tavis outlines the evolution of annual performance reviews, and three reasons why they are currently being completely reshaped. The following is a summary:
- The return of people development:
“ Firms are doubling down on development, often by putting their employees (who are deeply motivated by the potential for learning and advancement) in charge of their own growth. This approach requires rich feedback from supervisors—a need that’s better met by frequent, informal check-ins than by annual reviews… Firms that scrap appraisals are also rethinking employee management much more broadly. Accenture CEO Pierre Nanterme estimates that his firm is changing about 90 percent of its talent practices.”
- The need for agility:
“When rapid innovation is a source of competitive advantage, as it is now in many companies and industries, that means future needs are continually changing. Because organizations won’t necessarily want employees to keep doing the same things, it doesn’t make sense to hang on to a system that’s built mainly to assess and hold people accountable for past or current practices. As Susan Peters, GE’s head of human resources, has pointed out, businesses no longer have clear annual cycles. Projects are short-term and tend to change along the way, so employees’ goals and tasks can’t be plotted out a year in advance with much accuracy.”
- The centrality of teamwork:
“Moving away from forced ranking and from appraisals’ focus on individual accountability makes it easier to foster teamwork… Sophisticated customer service now requires frontline and back-office employees to work together to manage customer flow, and traditional systems don’t enhance performance at the team level or help track collaboration.”
Our organization has been quietly dismantling annual appraisals, eliminating demotivating and often useless subjective rankings, while ramping up leaders’ skills to better coach on the spot and give regular meaningful/timely feedback. When we formally replace the current annual review process, I doubt anyone will really notice. Why? Performance will be up and nonsense “paperwork” down. It will be a seamless and accepted evolution. Note: Widely visible and transparent leadership ratings from a broad internal and external audience are likely to ramp up. Think Trip Advisor aimed at leadership. This is not a contradiction, but rather a social supplement for leaders.
- Even if your organization insists on annual appraisals, make them rich, learning summaries of the “contribution conversations” ideally held often throughout the year. Make them a celebration of both milestones and misses. Ditch THE annual performance review, where for the first time in a year, you really review behavior and results. It’s way too late, and likely an administrative obligation. Host a quality investment in developing others instead.
- Insist on having regular meaningful feedback/coaching conversations with your boss. That doesn’t make you needy. Rather, it’s a statement that you value personally growing and improving.
Appraisals in The Triangle,
One Millennial View: I heard a relevant comment from a CEO recently that I loved. Ever heard (or used) terms like “social media ninja,” or “analytics expert” in a resume? Well… If you have, you’ve been fed a lie, because literally NO ONE is. These systems evolve too quickly, and too often. Google analytics and social media algorithms change so frequently that no one has truly mastered it at any time. The key is to keep up with it and stay learning as it changes, with the creative forefront to have ideas on how to make it work best for your organization. Operations update, evolve, change, and eventually become outdated. If we don’t give and receive feedback just as rapidly, then we’re out of touch and way behind.
Edited and published by Garrett Rubis