Annual performance reviews have long been de rigeur in organisational settings. However in recent years, the validity of annual reviews has come into question. The problem isn’t with measuring performance, but rather doing so in a meaningful and useful way. The problem with annual — or traditional — performance reviews is what they ignore in the dogged adherence to time and hard metrics.

Annual performance reviews and even semi-annual, have often worked as a numerical rating scale, similar to a school report card. However, studies indicate that these kinds of reviews produce scores that cluster toward average, or just above average, which means they aren’t a very meaningful way to provide feedback. What’s more, if you have to wait until the end of the year, the review ignores teachable moments, as well as opportunities for recognizing excellent performance.

Which leads us to the question of hard versus soft performance metrics. The hard metrics are those that are quantifiable: output per hour, sales performance, customer service resolutions, or anything else that can be measured with empirical data. But hard metrics don’t measure alignment to company culture and values. Those are behaviours and might be a little more difficult to measure on a numerical scale. And in a culture driven organisation, the strategic advantage is in recognizing and reinforcing desired behaviours.

There are lots of alternatives to the traditional performance review but they all boil down to one primary tenet: Provide feedback regularly and often. This philosophy goes beyond measuring performance, to cultivating an environment of continuous improvement. Of course, there’s the idea that regular feedback is the job of an effective manager. However, “regular” does not equal random.

Regular and often refers to performance and feedback reviews that take place on a schedule that ranges from weekly to monthly, sometimes with quarterly reviews thrown in for a bigger picture assessment. Some organisations have systems where hard metrics are entered on a weekly or bi-weekly basis. In other organisations, managers take on the role of a mentor with 1-on-1 meetings or coaching sessions to discuss performance, progress, and perhaps even obstacles the employee may be facing.

The implementation of the regular feedback loop will look different from organisation to organisation. For the most effective leaders, this kind of communication might come naturally, while others will want to focus only the hard empirical data. But developing a high performance, values-based organisational culture requires meaningful and timely feedback that strikes the right balance between quantifiable metrics and reinforcing values-aligned behaviour.

 

Image courtesy of jeasdaphorn at FreeDigitalPhotos.net

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