What if we turned the world of annual reviews upside down? What if we admitted the variables and biases involved in one human rating another is not an effective means of performance management?
The research is in, and it is conclusive. People are not capable of rating people! Michael Mount, Steven Scullen, and Maynard Goff conducted the research and published it in the Journal of Applied Psychology in 2000. Their study—in which 4,492 managers were rated on certain performance dimensions by two bosses, two peers, and two subordinates—revealed that 62% of the variance in the ratings could be accounted for by individual raters’ peculiarities of perception. Actual performance accounted for only 21% of the variance.
Let’s break this down into a real-world example. Rating a team member on critical thinking is more about my critical thinking, the value I place on critical thinking, my thoughts on what critical thinking is, and how tough a rater I am. It is more about me than it is the team member.
You have to stop and ask, “Why am I doing this? Is it adding value” Is it strengthening the team member? Is it going to improve performance?” NO! It is a perfunctory system that is biased and produces few results. In fact, it might have a paradoxical effect. Tieing compensation to an arbitrary and biased process of rating an employee could have a negative impact on morale? Consider the effect of receiving a glowing review from one manager who leans towards a more generous rating and the next year receiving a critical review from a different manager that is bent on a stronger rating curve. Did the employee’s performance decline or did they just get hammered by the inherently biased performance evaluation process?
What are we honestly hoping to achieve? What if we flipped the process on its ear and made it about performance management? And by “management,” I mean improvement. What if we replaced the word “review” with “coach”?
The idea of coaching changes the mindset. We are no longer looking at the past but focus our efforts on the present and the future. It allows us to be agile and responsive. It converts leaders and managers into coaches. It binds everyone together.
Critical elements to success
Leaders must focus on the following: (This must be at the core of your leadership philosophy)
- Hire great – Leaders should always hire up.
- Equip each team member – Great team members will come with a toolbox of skills. It is a leader’s job to ensure they are properly equipped for the current mission.
- Cast an inspiring vision – If you can’t articulate what inspires you, you cannot inspire others.
- Empower – You must empower each team member to execute based on their role and skillset.
- Remove barriers – Your primary job now becomes that of a coach. Your job is to remove barriers and help each team member succeed.
3 Tips for effective coaching
- Meet regularly and meet with purpose – Meeting with your team member allows you to discover barriers, strategizing solutions, inspire progress, and empower them to focus on the future.
- Review projects – Real-time reviews of project-based performance allows you to coach and correct within the context of real-time experiences. The purpose is to provide relevant feedback at the moment, so it becomes actionable. A vague and nonspecific critique over 12 months is tough for anyone to wrap their mind around. Even the best managers and leaders are left to generalize when trying to encapsulate 2,080 hours of work.
- Set Goals that align with the mission – Each meeting and each project review gives you an opportunity to recast the vision, reset expectations, ensure alignment, and (re)empower the team member to be successful.
There is something inherently positive and inspiring about a process focused on the future rather than a fuzzy and generalized review of the past.