I’ve never understood why the HR community adopted the term “performance management.” Successfully managing someone’s performance is an unrealistic expectation. Most parents struggle to manage a teenage child’s behavior and school performance. So what would make us seriously believe that People Leaders can successfully manage the performance of other adults?
I consider the role of a People Leader to be that of an enabler. An enabler whose primary job is to enhance the performance of a team and its individual members, and to create an environment in which people can achieve their career goals. In this enablement capacity, the People Leader coaches, mentors, clears obstacles, provides success tips and encouragement, inspires people to reach higher, and provides the necessary resources and tools to support performance, growth, and career mobility.
The Positive Enabler
As its definition conveys, the word “enabler” has a negative connotation, and this comes through frequently in discussions about psychology.
But enablers can also be positive. They can influence behavior in constructive, productive ways.
A positive enabler “helps to make things possible,” according to Ruth Nina Welsh, author of Be Your Own Counselor and Coach. “They support a person’s plans and encourage their dreams.
“Being a positive enabler is a selfless behavior,” Welsh said. “It occurs because the enabler wants the best for a person. They want to find ways to help make things possible. It’s not about taking over or bossing someone, but it’s about being a supportive presence.”
To many people, Welsh’s take might seem too abstract or like an emotional, feel-good message. But there’s truth in there. We all can be powerful influencers of people. And I believe that we all know that we get the best performance out of people when they feel inspired by a leader and sincerely believe that leadership is concerned and invested in their success.
This concept — the notion of setting people up for success — is the foundation of positive enablement.
Unfortunately, a more traditional performance management process typically takes precedence.
Employee Appraisals: A See-Saw History
The predominant goal of employee appraisals has changed over decades — at times reinforcing employee accountability, at other times driving employee development.
“Appraisals can be traced back to the U.S. military’s ‘merit rating’ system, created during World War I to identify poor performers for discharge or transfer,” according to “The Performance Management Revolution,” a 2016 Harvard Business Review article that traces the history of performance assessment. “After World War II, about 60% of U.S. companies were using them (by the 1960s, it was closer to 90%).”
A shortage of managerial talent in the late 1950s and the 1960s inspired companies to use appraisals to develop new supervisors and executives.
In the 1970s, the pendulum swung the other way. Amid rampant inflation, annual wage increases gained importance. And with new anti-discrimination laws on the books, companies were pressured to award pay more objectively, according to the article. “Accountability became a higher priority than development for many organizations.”
The forced ranking of employees championed by General Electric CEO Jack Welch in the 1980s reinforced the use of appraisals to hold employees accountable. A 1993 law that exempted bonus pay from salary tax deduction limits also reinforced the trend, along with other factors.
By the early 2000s, an estimated one-third of U.S. corporations and 60% of the Fortune 500 companies were using a forced-ranking system.
In the past 10 to 15 years, the pendulum has started to swing back toward assessing performance as a way to drive employee performance. But it hasn’t swung far enough. Let’s talk about what we can do about it.
Performance Management Today
At most organizations, the annual performance review is a staple of HR performance management. The review typically covers at least two of these four topics:
- Results, including commentary about an employee’s achievement of pre-established goals.
- Contributions, including an assessment of an employee’s efforts compared to those of other employees.
- Quality, including an assessment of the quality of the results achieved.
- Behaviors, including commentary about how an employee achieved results.
Performance reviews are often positioned as a way for managers to provide feedback on the previous year’s performance. They’re touted as a way for leaders to recommend areas of focus or improvement for the upcoming year.
Performance Reviews: A Faulty Process
In reality, the performance review is a compensation tool that’s used to determine how, or whether, an employee is rewarded and recognized for his or her contributions and results. As such, the performance review discussion often turns into a negotiation around the employee’s rating or a grievance brought by the employee.
Performance review advocates often say that the tool also serves as documentation of poor performance that can be used if an employee files a lawsuit. However, many employment lawyers counter this assumption, stating that in many cases performance reviews actually hurt an employer due to poorly executed or contradictory wording.
While we could list many problems with performance reviews, let’s look at the most egregious identified in “Drawbacks of Performance Appraisals,” an article in the Houston Chronicle that identified four key problems making performance reviews ineffective, unfair, and possibly even harmful.
Performance reviews are problematic because they:
- Limit perspective. They’re based on one person’s view, sometimes supported by feedback from others, but most often driven by the manager.
- Erode motivation. They determine compensation but are seen by the employee as rigged, in that they don’t always accurately correlate performance and pay. This is due to enforced bell curves and other tactics that limit the number of people who receive the highest ratings.
- Consume time. Many, if not most, People Leaders dread writing and conducting performance review discussions due to the time required to collect data about performance, write a review reflective of the evaluation period (typically one year), and have a conversation that the leader knows won’t be satisfying to most employees.
- Accommodate bias. The primary, if not only, assessor brings his or her own biases to the table when evaluating performance. These biases may be social in nature or due to other factors like communication style, work location, and comfort with the employee.
Recent research on the topic is eye-popping. Only 13% of individual contributors strongly agree their performance review inspires them to improve, and that percentage is a microscopic 8% for managers, according to The Manager Experience, a five-year Gallup study published in 2019.
Managers, the study revealed, “also find performance reviews to be less fair and less accurate than individual contributors do. If there were a single argument against the traditional performance review, it would be this: Those administering performance reviews think less of the process than those receiving them.”
It’s no surprise that many companies have moved away from formal performance reviews and adopted other mechanisms for improving performance and internal mobility.
Enabling Career Mobility
No matter what method an organization chooses to replace performance reviews, the replacement should embrace positive enablement as its core goal. Why? Positive enablement breeds a company culture that’s ripe to support career mobility — which can be truly transformational for organizations and individuals.
Career mobility happens when employees have the ability to learn new skills that lead to new opportunities for career advancement. It’s a win-win for employers and employees. Employers benefit from a constantly developing pool of internal candidates who can rise to new challenges and keep the organization competitive. Employees benefit too, because they’re able to stay more engaged, be more excited about the future, take on new projects or roles, and achieve their professional goals.
Performance Previews: A Dynamic Process
A good model for replacing the performance review is something that I’ve started to call the “performance preview.” The idea is this: Kick off the year with a conversation between the People Leader and employee that’s ongoing. While the traditional performance review inherently looks backward, the performance preview is always forward-looking — focused on what employees need to do in order to do their jobs well, and what they need from the organization to keep advancing on their individual career journeys.
An important part of making a performance preview work — and unlocking its support for career mobility — is understanding what skills people have and what skills people need. These days, a career isn’t defined by a bunch of successive jobs; rather, it’s a portfolio of skills and experiences. When somebody’s career is mobile, it’s because they’re able to demonstrate how their skills have evolved, or how transferable they are.
When People Leaders proactively help employees map out a development journey based on the skills employees need, everyone involved takes a critical first step in setting employees, and the company, up for success. And then something wonderful happens: A learning process begins. And increasingly, an upskilling platform like Degreed, which maps learning to skills and roles, is helping employers quickly connect employees to a wide range of curated and personalized learning content.
The next step? Providing real-world opportunities for employees to put their new knowledge to work. Career mobility opportunities like these include shadowing, mentoring, short-term assignments, ad- hoc projects, and even new roles. These are great because they let employees test their new knowledge, build confidence, and continue to build even more new skills.
Through it all, the People Leader provides success tips to the employee, rather than backward-looking feedback that’s often perceived as critical.
Positive Enablement is the Way to Career Mobility
As more and more companies embrace ongoing career conversations, yours should too.
If you do choose to continue relying on traditional performance reviews, be honest with yourself about this fact: They’re a tool for creating a rationale for compensation, or for documenting a performance problem to limit liability in litigation.
And be realistic about this as well: Performance reviews are not helping your organization improve people’s work and contributions in a meaningful way.
To truly help your employees, and to help your organization get ahead, you need a dynamic, forward-looking employee development process that supports career mobility.