Management – New Horizon Partners

Ditch the Annual Performance Review

Over the years, many organizations have adopted a form of annual performance review that includes scripted questions and rating scales for various measures of job performance. In many ways, these performance reviews are a bureaucratic means of compensating for the lack of leaders or the lack of a leadership development process in the organization.

True leaders do not need a system to force conversations about job performance, expectations or satisfaction. These are a part of the normal interactions between a skilled and effective leader and his/her team members. Leaders often guide and develop the performance of team members through three regular conversations:

Effective feedback
Constructive check-ins
Powerful progress reviews

Of course, there are other conversations that take place between a leader and team member in the normal course of business, such as project reviews, planning sessions and the normal personal conversations that play a part in relationship-building.

Effective leadership is based upon a relationship of mutual trust and respect, built through the everyday interactions that take place. But the following three specific one-to-one conversations are an intentional part of leadership and guiding the performance and development of our team members.

Feedback is the day-to-day series of conversations that nudge performance of team members toward the expected or desired actions and behaviors that are in line with the organization’s culture, values, mission and vision. Feedback requires, first of all, that we notice the actions and behaviors of team members and that we take the time, typically two to five minutes, to discuss them with the person. Feedback itself consists of three essential elements. First, a recognition of a specific action or behavior so that the recipient realizes what we are speaking about. Second, an identification of the impact of the action or behavior so that the recipient understands why we are having this conversation. Third, a communication of expectations for future actions or behaviors in terms of more of or less of the behavior identified. With these three elements, feedback is an important part of guiding the behavior or performance of the team member and developing them into a more productive or effective part of the organization.

The Check-in is the periodic conversation to track performance over the short term. This conversation, typically 30-60 minutes in length, might take place as frequently as daily or as seldom as monthly, depending on the responsibilities and capabilities of the team member and the context in which we are operating. Meeting too frequently can seem like micro-managing; while meeting too seldom can leave people feeling isolated or undervalued. The conversation in the check-in is primarily about tasks or status on assigned responsibilities and priorities and plans for the next day, week, or month. As with much of leadership, coaching is a large part of the check-in, so it is not just an exchange of facts, but building a deeper understanding and guiding the recipient in growth. The conversation might have branches built off of questions such as the following:

“Tell me about last week. What progress? What challenges?”
“What about this week? What are your plans and priorities? What hurdles or challenges do you face?”
“What’s one thing that worked last week and one thing that didn’t? What did you learn?”
“What feedback do you have for me? How can I support or encourage you more effectively?”

The Periodic Progress Review is a conversation about the bigger picture, covering both the team member and leader’s views about satisfaction, expectations, attitudes, goals and whatever else appropriate. It might be considered an opportunity to clear the air, develop a deeper understanding, and make sure that you are both on the same page. This conversation should take place at least once a year but, more appropriately perhaps, quarterly or monthly. It might be urgently needed in the face of changing roles, problematic attitudes, or signs of discord or dissatisfaction. This conversation should probably take an hour and might be done over a relaxing lunch. Again, this conversation is largely a coaching session, where the conversation branches out from questions such as the following.

“What do you find most challenging about this organization (or the team, or your job responsibilities)?”
“What are your strengths and how well are you able to use them in your current role?”
“What are your hopes or dreams for the future? How can we help you achieve them?”
“What do you see as goals or priorities for the next month, quarter, or year?”
“What do you find most irritating about my leadership style or the way that I interact with people? What should I do more of or less of?”

In each of these conversations, we should take the opportunity to connect on a personal level. Each of them has a component of guiding performance and providing development, with feedback more heavily focused on performance and the progress review more heavily focused on development.

Our ability to carry out these conversations effectively is largely a function of the quality of our leadership. Do we care about the people on our team; have we invested in a relationship of trust and respect; have we established a pattern of clear and frequent communication? If so, these conversations should be a natural part of our leader/follower interaction.

How effective are you at guiding the development of your team members? Do you have a shared view of how they are performing and how they might best improve? Do you have a pattern of consistent communication?

See the article “A Leadership View of Performance Reviews” for more content on this subject.

Separation Should Not Be Surprising

Firing with respect and compassion

Call it what you may – dismissal, discharge, layoffs, workforce reduction – firing a team member is not an easy task. This is the reason that it is often not done well. People want to sidestep the issue until it is unavoidable and then want to get it done quickly and move on. But separation should not be surprising. The entire process should be done with compassion and respect, no matter the circumstances.

There are three broad reasons for separating an employee:

Firing for cause
Reduction in force
Dismissal due to performance

Let’s look at these three categories and examine how we might do them with respect and compassion.

Firing for cause is generally the result of behavior on the job that is illegal, unethical, immoral, or in violation of company policy. In these instances, it is clear that disciplinary action is required, therefore there is no surprise to the team member. To not step up to our responsibility as a leader can be detrimental to the organization. When we suspect that some activity has met this criterion, we need to gather facts and then have a conversation with the person or persons involved. If, in fact, the person has stepped out of bounds, immediate dismissal is often the most appropriate outcome. In doing so, the discussion needs to be about the behavior and the implications or results of the behavior, both to the organization and to the individual. Rather than a response in anger, some compassionate guidance regarding the choice’s made might be helpful to the person’s future.

A reduction in force is often due to a downturn in business and the need to cut costs. These circumstances seldom crop up overnight, so our responsibility as a leader is to present the facts to the organization and communicate the need to cut expenses. With strong communications and culture, some organizations have voluntarily taken an across the board pay cut and rallied around other cost-cutting rather than seeing a workforce reduction. Some people might argue against presenting the facts of a downturn to the workforce as causing fear, but remember that clarity, not secrecy, drives out fear. If the team understands the situation, when staff reductions are necessary, they are not caught by surprise.

Dismissal due to performance is the most common and the most difficult firing situation for most people. It is important to remember that this situation is frequently as much the leader’s responsibility as it is the individual team member’s. It can result from putting the wrong person in a position or not clearly defining the expectations. And this is the situation where employees are most often caught by surprise due to a lack of clear communication.

Effective leaders provide feedback, both positive and corrective, to their team members on a consistent basis. If a person is not meeting the performance standard, here are three steps to deal with the situation in a positive and compassionate fashion:

The first step should be feedback to point out the deficiency, the effect of the deficiency, and to develop a plan of action for improvement. This feedback session should be a dialogue in which the action plan is jointly agreed upon targeted at bringing performance up to standard. (For more thoughts on effective feedback, see this series of articles.)
Performance and progress on the plan of action should be reviewed periodically. It is possible that the action plan may need to be adjusted or reinforced.
When it seems impossible or improbable for this team member to meet the performance standard, an alternative course should be discussed. If they had been promoted from a previous position in which they were successful, would they prefer to move back to that position? Are there other positions in the organization where they are more likely to be successful? (This should not be a case of pawning off the problem to a different manager.)
If the person is unable to meet the performance standard and if another more appropriate position is not available, then it is time for dismissal. To do so with compassion may require offering some transition assistance. This might include extending employment for a short time while allowing time for a job search, providing outplacement assistance, or helping with connections and referrals.

Firing with compassion and respect is the right thing to do because it demonstrates respect for the person. It may one of the best ways to demonstrate the character of the leader and the culture of the organization.

Are you able to lean in and act with compassion when someone needs to be fired?

Resilience and Business Strategy

Resiliency is often spoken of as an important character trait of an individual. A healthy person is expected to be highly resilient. Resilience is the strength and speed of our response to adversity or change. The Oxford Dictionary defines resilience as “the capacity to recover quickly from difficulties; toughness.”

There is a similar concept of organizational resilience that can apply to business strategy. This organizational or corporate resilience is the strength and speed with which an organization is able to respond to changes in the competitive or market environment or other events that might affect the health and well-being of the firm. These changes could be technology-driven changes, economic changes, changes in the competitive landscape, or anything else that might affect the organization’s ability to compete effectively. Some examples of the types of adversity that organizations might face could be a decision by a major customer to vertically integrate the product that the organization supplies, the entrance of a new and powerful competitor, a technology that makes the organization’s product obsolete, or a decision by a customer to move production or sourcing off-shore. Other types of adversity could include a fire that damages production capability or the death of a key member of the organization. Resiliency includes both the ability to foresee or prepare for possible adverse situations and to respond and recover when they do happen.

Part of the strategic planning process should include a risk assessment. The thought process for this assessment is to consider the various potential risks and the likelihood of occurrence. For the highest potential risks or those with the greatest potential impact on the viability of the organization, the planning process should give some thought to either contingency plans or implementing actions beforehand that mitigate any potential impact of the higher-risk potential adversities.

Strategic planning should lay out a course of action and allocate resources to improve the organization’s ability to compete. As such, strategy and the strategic planning process provide focus. Yet, the need for resiliency requires that the organization sometimes explores or experiments with other potential strategies, business models, or courses of action. It is not inconsistent, in fact it is wise, to explore alternatives that might unfold into the future, either because of a change in the environment or due to the discovery of a strategic path that generates higher value. The bottom line: an organization, like an individual, cannot be complacent but must be taking in and processing information and considering the impact and the alternatives in a changing world.

Is your organization working to build its resilience?

Value People, Evaluate Performance

It is very easy to intermingle our view of people with our view of their actions, especially when we need to give corrective feedback. When we do so, the natural result is conflict as the other person feels personally attacked and most likely will defend themselves. When we fail to value the person, we make it impossible to build the relationship or trust and respect that effective leadership requires.

I learned the difference between criticizing the person and criticizing the action from my father-in-law, who was a great example of what it meant to be a man and a leader. On the two occasions where my actions angered him, we had discussions. In those discussions it was quite clear that he loved me personally but that he was disappointed in my actions. The discussions centered on my actions and the choices that I had made.

As a leader we need to always value the individual. This is common decency and a necessity for co-existing. It is also a command. In Scripture, the second part of the Greatest Commandment is to “love your neighbor as yourself.^”An effective leader demonstrates humility, valuing others as much as they value themselves.

How do we as leaders demonstrate the value that we place in the people on our team? Here are some suggested practices to incorporate into our daily interactions with the people around us:

Demonstrate a genuine interest.
Value their uniqueness.
Respect their values and beliefs.
Listen to their thoughts, opinions, and emotions.
Express gratitude for their contributions.

In her book, Radical Candor, author Kim Scott defines a model of leadership built on radical candor, which she defines as caring personally and challenging directly. This “challenging directly” is a matter of providing clear and proper guidance. We could also describe this type of relationship as “speaking the truth in love.”

How do we then provide guidance that values the person and evaluates performance? Here are some guidelines for effective guidance that evaluates performance:

Provide guidance from a relationship of personal caring. As mentioned, guidance is best received within a relationship of trust and respect. Therefore, there must be an ongoing dialogue that demonstrates this relationship. Obviously, if the only conversations are those delivering criticism, the guidance will likely not be welcomed or valued.
Don’t personalize guidance. It is not “you did….” or “you are….” but rather a focus on the actions or behavior. Avoid the fundamental attribution error, that is using perceived personality attributes, such as smart, stupid, lazy, greedy, etc.
Address specific action or behavior. Guidance is not focused on the person, for example, “you are so smart.” Neither is the best guidance given as general statements, such as “The presentation was good.” Rather, the best guidance focuses on the specific actions or behavior, such as “the logic that was shown in the presentation made it easy to follow” or “the presentation could have explored the alternatives more fully.”
Frame guidance based on the future. The purpose of guidance is to reinforce the positive performance or to improve the negative. Leaders use past action or behavior to guide people into a better future performance. Therefore, guidance uses the observed performance to either make recommendations for the future or to elicit thoughts about improving performance for the future.

Leadership based on valuing the person and evaluating the performance doesn’t mean that leaders need to accept performance that does not meet requirements or expectations. Part of caring personally is encouraging people to perform to their best. If their best is less than what is required or expected for the position, then perhaps they are in the wrong position. Helping and encouraging them to either grow to meet the position requirements or to find a different, more suitable position is the caring thing to do. This can mean firing a person who is better suited for an opportunity elsewhere. Even firing can be done in a way that expresses the value that we hold for the other person.

Is the feedback that you give helping your team reach their potential and meet expectations?

A Leadership View of Performance Reviews

For some people, performance reviews are the one time when they tell their direct reports how their work is perceived. Sometimes these reviews are simply a perfunctory fulfillment of a corporate requirement or the necessary step required for a salary increase. Often the performance review, whether it be annual, quarterly, or some other frequency, is the only time that a boss might discuss the level of performance, suggestions for improvement, or career aspirations. On the other side of the table, the team member may walk into the review meeting with some fear, either of the unknown or of the possibility of criticism.

For a true leader, the performance review process can be quite different. The performance review is an opportunity to mentor or coach and an opportunity build relationship. Here are some thoughts on the performance review in an effective leadership model:

The performance review is a time for summarizing and consolidating an ongoing dialogue about performance, development, and aspirations. An effective leader has a habit of continually communicating with his or her direct reports. This continual process includes frequent 1:1 meetings to discuss work progress and performance, identify issues regarding organizational processes or resources, and relationship building through discussion of aspirations, satisfaction, and so forth. Additionally, an effective leader provides impromptu guidance and feedback, both positive and negative, whenever the occasion arises to directly view the work of the team member. This process of continual feedback need not be time consuming; a 1:1 meeting can typically be accomplished in 15-30 minutes every week or two and impromptu feedback can be done in 2-3 minutes while walking out of a meeting. With these habits in place, the team member knows exactly what to expect in a performance review as it is a summary and deeper dive into topics that have been discussed over time.
The performance review is a balance of past and future. The performance review is a wasted opportunity if it only looks at the past and the team member leaves the meeting without a clear view of what needs to or is likely to happen in the future. There needs to be agreement regarding the level of past performance, but leadership always has a forward focus. Therefore, the time needs to be split between the review of performance and a discussion of the future. This view of the future includes a discussion of the areas of emphasis for the team member, definition of a personal development plan, and career aspirations and potential. Focusing on the future keeps those that did well in the past from resting on their laurels and prevents those that have underperformed from wallowing in despair. Once this discussion of the future takes place, these plans and areas for emphasis become topics to be touched upon in the ongoing 1:1 meetings.
The performance review needs to be an effective discussion regarding expectations and performance. The review is more than providing a rating score of performance or announcing the impact on compensation. In fact, these two things often get in the way of clear communication regarding just how the team member is perceived and what they might expect in the future of their career. Here are some further points to make it an effective discussion that benefits both the leader and the team member:
- Schedule adequate time. A proper discussion of performance and future expectations requires some time, probably an hour, not ten minutes at the end of the day. As a leader, it is an opportunity to be utilized.
- Prepare and provide a written summary of the major points of discussion. Sometimes the discussion draws out thoughts and emotions that make it difficult for the team member to capture the entire discussion. A document provides a point of reference for future review.
- Deliver the rating and compensation news at the end of the meeting or even at a short follow-up session. The team member can focus too much attention on the numbers and tune out the discussion if they see these first. The value is in the discussion.
- Don’t rely on your own perceptions. As you are preparing for the meeting, seek input from other people in the organization that are familiar with the team member’s work so that you aren’t biased in your review or only have part of the story.
- Make the review meeting a two-way discussion. Ask the team member to come prepared to also review your performance as a leader. By doing so, you first take some of the fear out of the process and also may get some important feedback, even perhaps some feedback that might impact your perception of the team member’s performance.
- Appropriately stage the meeting. Meeting at your desk might not be the best setting for a discussion of your working relationship and the expectations that you have for the team member. A small table somewhere, perhaps even a lunch meeting, may be a better environment for the type of discussion that best serves the long-term function of this meeting.

An effective leader is continually building towards the future and developing the relationship through which he or she can influence the members of the team. The entire performance review process – impromptu guidance, 1:1 discussion, and the periodic review/rating – is a platform for doing so.

Are you providing and receiving necessary feedback with your team members? What other tips do you have for optimal use of the performance review process?