Axe the Performance Review

There is considerable debate about the value of the traditional performance review. I would estimate that 60 percent of people think the process is a waste of time, 20 percent stoutly defend it as necessary largely for compliance and control purposes, and the other 20 percent are searching for a better way.

These assumptions were validated by my own research on the attitudes that managers and employees hold about performance appraisals. Some of the shortcomings that respondents cited about these reviews are that they: 

  • Are a costly exercise 
  • Have a formality that stifles discussion
  • Are provided too infrequently
  • Rarely result in any follow up
  • Strike most recipients as stressful

So how can we rethink the review? I think an effective replacement is an approach that I refer to as the "Five Conversations Framework." It is structured as five conversations, each lasting about 15 minutes, between the manager and each of his or her employees. 

Let's briefly look at each of the five conversations. 

1) Climate review conversation
A climate review is about determining the current atmosphere of the workplace. It is primarily concerned with employees' job satisfaction, morale, and communication. Although people's opinions about these matters can fluctuate over the course of a year, it is important to take an occasional snapshot of the business. 

2) Strengths and talents conversation
Most performance appraisals are fixated with what is going wrong; in other words, they are focused on employees' weaknesses, often overlooking their strengths and talents. Tom Rath, in the bestseller Strengths Finder 2.0, puts it this way: "Society's relentless focus on people's shortcomings has turned into a global obsession. What's more, we have discovered that people have several times more potential for growth when they invest energy in developing their strengths instead of correcting their deficiencies."

3) Opportunities for growth conversation
This conversation focuses on strategies for improved performance from the employee's individual perspective. It provides the team member with an opportunity to consider how she might improve her own work performance. From here, the pair can discuss some tangible ways of improving individual productivity. This conversation is important in that it reflects on the individual's role in the business and how to improve her contribution.

4) Learning and development conversation
Discuss the training and educational needs of the employee now and in the future. It may include formal opportunities such as attendance at courses, programs, and seminars. Informal opportunities may include skill development within the business, or further coaching and mentoring. 

5) Innovation and continuous improvement conversation
Conversations around innovation and continuous improvement are about practical ways for improving both the employee's own effectiveness, and that of the business in general. It focuses on ideas for developing improved working arrangements and is likely to lead to the immediate generation of some practical and cost-effective ideas that can be used to enhance the business. 

If you have no performance management system in place or the current system is not working, consider implementing this "Five Conversation Framework." 

Dr. Tim Baker is an international consultant and author of four books. This is an edited extract from his latest book, The End of the Performance Review: A New Approach to Appraising Employee Performance, which can be purchased from Amazon or direct from the author. Baker was voted one of the 50 Most Talented Global Training & Development Leaders by the World HRD Congress last year.