HR: Performance reviews - Informal or formal approach?

“Managers feel they must allocate a disproportionate amount of time to prepare, carry out and follow up conversations that rarely offer any new and constructive information, while many employees don´t feel any need for such a intervention in an otherwise challenging every day life.” - Øystein Bonvik, Communications consultant and author (Lohne, 2015)

A performance review is meant to create a space for where to discuss and address different topics between the manager and employee. Several people have in recent years been critical of the use of traditional annual performance reviews and feel that it has very little value to both the manager and the employee. It can often be seen as a chore that needs to be ticked in a report as ”done”. This goes back to how the manager is assessed by upper management. If he/she is only assessed on the number of performance reviews that have been done, many managers would opt for a more formal approach in the form of a fixed list with certain bullet points to cover in the most time efficient way. If however the manager is assessed by the effect of the performance reviews, you´d be able to see the effect they could have.

“Because the idea that you can manage performance through an annual conversation is as outrageous as expecting to manage your marriage through your anniversary.” - Mary-Clare Race, Psychologist and leadership expert (Race, 2016)

Based on research done by Kuvaas, Buch and Dysvik in 2016 in their report Constructive Supervisor Feedback is not Sufficient: Immediacy and Frequency is Essential, it´s apparent that informal and frequent feedback works better than annual and more formal performance reviews. In this way you can address things and attend to them there and then (both the positive and negative) rather having it fester for another twelve months for the next performance review. Companies like Adobe, Deloitte, Gap, Microsoft and Spotify have all removed their annual performance reviews, or are in the process of doing so, in favour of more frequent “check-ins” between the manager and employee.

The traditional performance review can serve as a positive influence for some employees, but can be deteriorating for others. This all depends on the employee state of mind at the given time. Which makes it an inefficient and inaccurate tool to use.

Here one needs to view the HR strategy of the company as a whole; What motivates your employees? What benefits are they given? Are the employee’s short term or long term members of the company? The difference between a commitment based HR-strategy and a more traditional based HR-strategy. A company that has a more beneficial commitment based model, would focus on job security, career development and advancements and a more long-term approach in terms of company values and structure. This approach would benefit greatly from having frequent informal “check-ins”.

Measures

“That we do this so often makes the manager quickly what works and how to follow up on this. At the same time it´s easier to get a grasp on what doesn't work. Many of the questions is aimed at the employees own behaviour, how one treats ones colleagues and contribute to a good working environment. This creates awareness.” - Johannes Sundlo, HR Controller i Spotify (Redaksjonen, 2016)

Mr. Sundlo stated that Spotify had a need to collect data more frequent than via annual performance reviews. This right here is a commitment and focus on digital and innovative HR, in order to a achieve an informal standard in the way feedback is collected. As of 2015, Spotify had over 1600 employees (Spotify; Quartz, 2017). Regardless of the company size, this strategy and approach can be applied to any type of company.

If you take a company within a production based market, which have a mix of employees that have secondary (high school) qualifications working the production line and employees with college- and university degrees working in administration positions, it would be beneficial that each manager have the opportunity for a more flexible and team based HR approach, focusing on the type of employee in their own team or department. By having frequent and informal short conversations, you´d be able to pick up on the positive and negative incidents more efficiently. Then the manager can decide himself or herself, based on the conversation with each employee, if or when they need to set aside some time for a proper sit-down.

Implementation

To implement this in the most suitable and cost-efficient way, I would suggest the following five measures:

1.     Each manager takes a look at each employee’s job description in their team to ensure that it actually reflects their current job. This also allows the employee to know, clearly, what is expected of him/her.

2.   Book a career coach to come in to teach all the managers different tricks of the trade on how to make oneself more approachable for ones staff for the purpose of gathering feedback and how to handle conversations like them.

3.    All managers need to ensure that they provide each employee with informal feedback on a frequent basis, face-to-face.

4.    Use a survey service to send out questions to each single employee via link they can access on their phone. How frequent this is needed, needs to be set for each company, but to give a reference Spotify sends out two questions a week. Each manager would then be able to send out two-three questions, tailored to their team and type of workers. Afterwards, each manager would be able to get an overview of the results from each employee and then be in better position to follow up on the needs of their employees, without the process being to time-consuming. An example of one of these survey services, that is free, is Google Forms.

5.   On a regular basis, conduct an anonymous employee survey, using a similar service as to the one mentioned above. This would allow a better overall look on how the employees view their own work, job satisfaction, their managers and the company as a whole. Several organisations have had great success using similar surveys like this, amongst others the Norwegian Armed Forces (Forsvaret, 2015), which conducts a survey every other year.

Regardless of what approach you go for, it´s important to inform all of the employees on measures the company is thinking of putting in place and how each employee also needs to take responsibility to approach their manager on a more frequent basis.

Conclusion

• Introduce informal and frequent feedback “check-ins” and use a more coaching leadership style towards the employees
• To use the current and future technology to make it easier to collect data
• Follow up each manager in terms of how their team is doing 
• If needed, schedule a proper sit-down between the manager and employee to discuss topics discovered during check-ins
• Managers need to be able to get support from HR and upper management to follow up on each employees need

-------------------

Photo credit

• Mats Grimsæth / Norwegian Armed Forces
• Mary-Clare Race
• Pixabay
• Torgeir Haugaard / Norwegian Armed Forces
• Spotify

Bibliography

• Forsvaret, (2015). Medarbeiderundersøkelsen (Employee survey) 2015 - Kortversjon (Short version). Oslo: Forsvarets mediesenter (Norwegian Armed Forces Media Centre)
• Kuvaas, B., Buch, R. and Dysvik, A. (2016/03). Constructive Supervisor Feedback is not Sufficient: Immediacy and Frequency is Essential. Accessed 2017/03/09 from Human Resource Management
• Lohne, L. (2015/10/04). Dagens Næringsliv - Meningsløs medarbeidersamtale? Accessed 2017/03/09 from Dagens Næringsliv
• Redaksjonen. (2016/01/05). Medarbeiderundersøkelser 2 ganger i uken. Accessed 2017/03/09 from Ledernett
• Race, M. (2016) The six conditions of high performance by Mary-Clare Race, Mind Gym. Accessed 2017/03/09 from PerPetual Ambition
• Spotify; Quartz. (2017). Number of Spotify employees from 2011 to 2015. Accessed 2017/03/09 from Statista
• Thue, K. (2016, 02 01). Ekspert: Medarbeidersamtale har ingen effekt. Accessed 2017/03/09 from Hegnar