Traditional performance reviews, with their outdated rating systems and annual feedback cycles, are increasingly ineffective and disengaging for both managers and employees. Many organizations are rethinking this process. Keep reading to discover how major companies are reshaping their performance reviews to maximize employee growth and engagement.
“In business, the idea of measuring what you are doing, picking the measurements that count like customer satisfaction and performance… you thrive on that.”
Bill Gates, Former CEO of Microsoft
You’ve likely experienced the frustration of spending half your week researching development opportunities, soliciting feedback, and trying to map your strengths back to core competencies. But is there a benefit, or is this simply an administrative box to check? The traditional performance review is no longer effective or beneficial for most organizations. Managers and employees are tired of the forced rating systems, labor-intensive paperwork, and the feeling that their efforts are not truly recognized. Some of the most successful companies today have already taken the lead in reimagining the entire process. Let’s look at some companies that have radically altered their mechanisms for evaluating employee performance and discuss some key takeaways.
Adobe Emphasizes Collaboration, Consistent Feedback, Growth and Development
Donna Morris, former SVP of People Resources at Adobe, took a hard look at their annual performance review process and scrapped it in favor of a new check-in system. Because employees only received feedback from their supervisors once a year, and it often came as a negative surprise, their productivity and enthusiasm decreased. Rather than improving business goals, this performance review system ultimately harmed the company by increasing employee turnover. The new system emphasized three key elements:
- Expectations: Employees present expectations to their manager in a collaborative, two-way conversation. Expectations are documented and agreed upon by both parties.
- Feedback: Employees provide and receive feedback regularly and receive quarterly reminders to review expectations.
- Growth and Development: Employees manage their career and personal development plans. Employees are encouraged to ask themselves, “What is my work leading to?” to consider how they can flourish in their current role and have an open dialogue about future roles.
After Adobe transitioned to the new check-in system, they saw a 2% decrease in voluntary attrition globally and increased positive sentiment among employees toward the company, contributing to overall organizational success.
Regeneron Pharmaceuticals Transforms Performance Management from the Bottom Up
Regeneron Pharmaceuticals develops potentially life-saving medicines and treatments for patients with serious diseases. Its initial core principles included hiring the most intelligent people and doing great science. In 2015, Michelle Weitzman-Garcia joined Regeneron as Head of Workforce Development, and it was immediately apparent that the company’s performance management system was in dire straits. Employees and supervisors despised it.
Regeneron’s most significant performance management challenge was due to its business units doing fundamentally different work with very different timelines. These units included pharmaceutical development (a new drug could take years before being market-ready), product supply (marketing and sales could roll out a plan for the same drug in just a few months) and corporate functions. Each business unit required a customized performance management system that could address the needs of these diverse workflows.
Weitzman-Garcia began by asking each business unit for their input on how they thought the performance management process should operate. First, she learned that the original system, an overly complicated 12-point rating scale, could have been more straightforward to supervisors. She reduced the rating scale to four points to make the process more efficient and created separate review forms for the different business units to address their unique needs. For instance, she developed a traditional structured form for the Research and Development team and a 30/30 process (every 30 days, employees receive 30 minutes of feedback) for the product supply team.
Weitzman-Garcia also replaced corporate and individual goals with behavior-focused feedback. She asked employees to consider what they did and how they did it, which empowered them to engage in conversations about their behavior versus simply focusing on salaries and promotions. She also implemented a professional development framework to help clarify employee career planning and direct discussions around performance. As of 2016, 92% of Regeneron employees participated in this new performance management process.
Cisco Shifts the Focus to High-Performing Teams
Cisco, one of the largest technology companies in the world, offers employees year-round feedback through a data-driven performance management and development program. This program focuses on understanding the characteristics of their best teams and replicating and amplifying them to build more high-performing teams. To implement this ambitious alternative to traditional annual performance reviews, Ashley Goodall, former SVP of Leadership and Team Intelligence, and his team developed and implemented a performance review system called Team Space.
This internal tool delivers real-time intelligence based on data they collect from employees, providing insights about team leaders, members, and team engagement and performance. Cisco determined capturing and sharing information was critical to increasing performance and engagement. To collect reliable and honest feedback from their employees, they strove to create a culture of trust and safety by ensuring everyone understood how Team Space captured all the data, what it used the data for and who could view it.
Every year begins with employees aligning their goals with those of the organization. A mid-year career development discussion happens between a supervisor and their team member. At year-end, a review assesses performance based on accomplishments and allows supervisors to reinforce the connection between business results and rewards. Throughout the year, employees and managers can request feedback about themselves and provide feedback to others (via Team Space), which is shared regularly.
Key Takeaways to Implement in Your Organization
Ultimately, a robust performance review process should be more than just a dreaded annual meeting to identify your employee’s strengths and weaknesses using an outdated rating system that is no longer relevant or applicable. A strong performance review structure should be:
- Flexible and applicable to how people and organizations work today. For example, much work today is project-based, with specific goals for each project and task, and some employees may require shorter goal cycles, like a month or even a week, rather than a full year. Discussing progress throughout the year will help employees stay on track and achieve their short and long-term goals.
- Customized to individual roles and goals, which makes them more accurate and relevant. For instance, work may happen collaboratively across virtual teams around the country or the world. Few supervisors can accurately assess an employee’s performance when they work on multiple teams, sometimes doing work the supervisor doesn’t see and may need help understanding. By customizing the review process for each employee, you can avoid introducing bias against specific people by accurately representing their skills, making them feel seen and understood, thus leading to lower turnover.
- Collaborative and conversational, with clear expectations and active employee participation. Offer your team members the opportunity to prepare a self-assessment to measure their progress. Ask for specific examples and ideas for improvement and growth.
- Constructive and focused on the specific guidance employees need to achieve their career goals. Strong feedback is critical to developing talent, increasing engagement, enhancing trust and driving performance.
Gone are the days of the traditional one-sided, metric-heavy performance review that was just something to be endured by management and employees. Instead, we see organizations across all industries looking to change their culture positively by using a revitalized performance management process to promote more collaborative, engaged and empowered employees.
Anne Evenson is a native Austinite and a proud Veteran’s spouse with over 20 years of marketing, communications and program coordination experience in the public, private and nonprofit sectors. She is also a sculptor, jeweler and all-around dabbler in the arts and loves to help military-connected individuals discover their inner creativity.
Learning and professional growth go hand in hand. For regular career insights and information on continuing education programs offered by UT’s Center for Professional Education, subscribe to our monthly e-newsletter, It’s Your Career.