Performance Development
Earlier today the Harvard Business Review reposted an article on Performance Evaluations originally written in 2018 titled “People Don’t Want to Be Compared with Others. They Want to Be Compared with Themselves”.The article pointed out that that systems that compare a person’s performance to their past performance (You did better than before) were perceived as being fairer than systems that compared a person’s performance to that of others (You did better than someone else). Systems comparing employees gained attention at General Electric under the leadership of Jack Welch where employees’ performance was ranked from top to bottom, giving additional rewards to the top 20% while laying off the bottom 10%. The evaluation process was perceived by employees at both the top and the bottom as unfair. Research on fairness has shown that there are significant costs from the consequences of being perceived this way.
Five years after the article was written, most people remain dissatisfied with their performance evaluation processes. The goal of performance evaluations should be performance development or improvement not management. This difference drives the frustration most still feel. Observing the ways top performers outside of business cultivate the use of feedback provides an approach that I believe can consistently drive improvements in performance.
Their approach rejects much of the conventional “corporate wisdom” on performance management. It involves a simplification of traditional practices and processes by making feedback conversations a normal and daily feature of the workplace. That means such things as backwards-looking annual reviews are replaced with cycles that are linked more closely to the rhythm of the work being done at the time. To make this type of a system work, organizations must develop, embed, and sustain the right conditions to enable free-flowing feedback to thrive. These include a shared performance purpose, a strong cultural and values framework, and an inclusive climate of psychological safety, where any perception of threat or fear relating to feedback has been removed.
Driven by the desire to optimize return on investment, pursue HR process effectiveness, deliver technology enablement, or HR data analytics and intelligence, organizations have evolved a complex web of formal and informal links between performance management and other critical areas of intervention including compensation and promotion. These may all be valid aims, but they do not really support the primary goal of performance management, which is personal development to improve performance.
Both the organization and its individual members have a critical role to play in establishing an effective feedback system. Leaders need to be trained in human behavior from as early as possible in their careers. Only then will they be able to provide effective feedback in the moment and tailor it to every individual’s needs. Receivers of feedback need to learn to seek out, accept, and understand performance feedback, and use it to drive improvements on a day-to-day basis. It is particularly important in the early stages of a person’s career when it can help build the self-awareness that is a critical building block of high performance. Exposure to constructive feedback early in a career will also help normalize it throughout a person’s career.
The goal is to move to a more fluid, non-linear world of performance evaluations, where feedback is natural, regular, and highly personalized, involving close collaboration between feedback giver and feedback receiver that supports a commitment to continual improvement. This type of system is already being used and is highly effective in sports, theatre, dance, film, TV, medicine, emergency services, and the military.
Research has consistently shown that best-practice performance management techniques such as ratings, structure, and process have minimal impact on driving performance when compared to feedback culture practices. Feedback is a critical component in shaping growth and improvement. The only way to measure how you are doing is to ask someone who observes you.
Feedback is not a tool to be brought out on special occasions. It is a cultural thread that runs through everything highly successful people do. Feedback is as applicable to the continued improvement of leaders as well as those they lead. It needs to be part of the culture. It is crucial to understand that a feedback culture is not just about top-down hierarchical feedback-giving. Successful companies rely on collaborative internal partnerships that work towards a common goal and feedback among peers is valuable and should be desired. This is a mindset that everybody in the organization needs to embrace.
Formal, process driven methods that apply numerical ratings on a periodic basis that are then trued for comparison across an organization have almost no impact on individual or organizational development. Instead, the focus needs to be on enabling everyone in the organization to give and receive personalized feedback in the moment. Both feedback givers and receivers throughout the organization need to cultivate a specific set of capabilities, skills, and mindsets, including self-awareness, empathy, honesty, and courage. Performance development is not just about the individuals themselves, however, it is also crucial that the culture they operate in encourages, supports, and demands feedback as a natural center point of daily activities.