Key Takeaways
- A performance review is a tool and an integral component of an organisation’s performance management activity used for evaluating employee performance.
- Traditional performance review methods are no longer thought to be efficient in assisting employees to perform at their best. Many researchers, experts, managers, and employees who are often at the receiving end of performance reviews have found them to be inconvenient, time consuming, and demoralising.
- Because of the strategic way it helps both managers and employees increase organisational effectiveness, coaching-based performance reviews are now suggested in place of traditional performance reviews.
A performance review is a critical component of the performance management strategy of an organisation.
It is an essential tool for harnessing talent, highlighting improvement opportunities, and collecting information for aligning employees with larger organisational objectives. They also play an important role in empowering employees by assisting them in reaching their greatest potential.
However, over the years, performance reviews have come to be regarded as an ineffective method of evaluating an employee’s job performance.The world has changed, and so should techniques for evaluating job performance.
Coaching-based performance reviews have been identified as the most effective method for evaluating employee performance.
This article highlights the weaknesses of traditional performance reviews and the benefits coaching based performance reviews hold for organisational leaders who implement this method.
What is a Performance Review?
A performance review is a one-on-one discussion between a manager and an employee about the employee’s strengths and weaknesses, as well as opportunities to improve skills, competencies, and growth in the organization.
A manager uses a performance review, also known as a performance appraisal or a performance evaluation, to examine an employee’s job performance in a methodical and formally regulated manner.
The Goal of Performance Reviews
The goal of a performance review is to provide valuable and constructive feedback to an employee. Additionally, the point of a performance review is to “make an employee feel encouraged about their company, their job, and their role in its success; you want them to leave the review feeling valued and encouraged. They will feel challenged too, but with a sense of hope and encouragement,” says Trevor Throness, senior instructor at professionalleadershipinstitute.com and author of “The Power of People Skills”.
After a performance review, “you want to make sure that the employee leaves feeling:
Heard—their manager listens to them carefully.
Understood—not only does the manager listen, but the manager really understands the situation.
Encouraged—they leave with a stronger sense of how they contribute, what their strengths are, and what the organisation is missing when they’re not there. ”
However, this is not usually the case. “Many managers fail at performance reviews because they lack an understanding of the reason why performance reviews are done,” Throness revealed.
What Research Shows About Traditional Methods of Performance Reviews
“…performance review no longer works. Data shows this to be true, and so does experience. Everywhere I go, managers hate giving performance reviews (they take too long to prepare and are a waste of time), “says Throness.
Not only do managers hate giving performance reviews, but employees also hate receiving them. And here is why: “you find out once a year whether you passed or failed the entire year”.
Throness explains that a Gallup poll found that “only 14% of employees strongly agree that their performance reviews inspire them to improve.”
The study showed that performance evaluations harm the organization and its employees more than help them achieve the true essence of performance assessments.
Additionally, another study revealed that only 5% of managers like conducting performance reviews, and there is a consensus amongst almost 90% of HR leaders that traditional performance reviews do not yield accurate results.
Traditional Performance Review vs. Coaching Based Performance Review
“Traditional corporate performance reviews are demeaning, arbitrary, wasteful, and useless.” Patrick.G explains in his Linkedin post.
In response, a retired Microsoft employee couldn’t agree more.
“One of the happiest aspects of being retired is no longer having to participate in this process. Once a year reviews were a pain, I can’t even imagine having to go through this four times a year. What a huge waste of time.
“…three months before the review process, every email thread would have multiple levels of management CC-ed trying to get the attention of the managers up the chain.”
Advantages of Coaching-based performance reviews
Frequency
Throness points out that today’s generation of employees are often in a loop of constant feedback. Thanks to social media. Everyone is constantly checking on who liked and commented on their posts on the various social media platforms. People who comment on others’ posts expect and get responses almost immediately. “Constant communication is their expectation of life,” says Throness.
“Then, they come to your company and receive feedback on their performance… one time per year. In a formal setting. It’s way too little; they actually can’t believe it. They’ve never been so starved for input. Plus, it feels to them like they’re being called into the principal’s office…”
On the contrary, coaching based performance reviews happen frequently. Throness uses the analogy of coaching on a football field to make the case for why coaching works in sports and will be more effective and helpful if applied to evaluating job performance. “You make a bad play, you get feedback. You make a good play, you get feedback. You’re always being helped on the road to becoming a more competitive player. ”
Throness recommends “once per quarter for a formal coaching session at minimum.That doesn’t mean you don’t give feedback between formal sessions of course. But at least once every three months you should have a sit-down meeting to find out how things are going, what’s going well for the person, and what could be going even better.”
Filing of Reports Wearies Both Managers and Employees
One of the things many managers have put forward that establishes the drawbacks of the traditional approach to performance review is the unending filing of reports that this method entails. “After filling out a few, it becomes a task that just has to get done so the ‘performance review box’ can be checked off”, says Throness.
“This goes for preparing for the interview, and also conducting it. Once you’ve sat with the sixth person you’re reviewing – or the sixteenth – patience wears thin, and feedback gets weaker. The employee senses this, feels taken for granted, and leaves disillusioned.”
Exposing Weaknesses vs Building Strength
Although the goal of a performance review is to help an employee improve performance, the outcome oftentimes tilts towards exposing an employee’s weaknesses. This leaves an employee depressed or demoralised. However, coaching focuses on helping employees be better at their strengths. “None of us succeed by developing a set of strong weaknesses. Sure, we have to correct basic weaknesses, so they don’t bury us. But our wins are going to come from getting better at, and building on, our strengths”, Throness explains.
The Intent
According to Throness, performance review was originally a method designed to look for loopholes in employees’ performance and find a cause for a future firing. “Some employers have used the performance review for one simple reason:to chart and document employee failings so they can be fired with cause. That means with legal cause; in other words, without having to pay severance to the employee who is released”.
This is “not a motivational use of the performance review!”
“Obviously this doesn’t have a powerful impact on the employee in terms of bettering their performance. More often it makes them terrified, and makes their performance actually worse. In other words, they will perform better without the threatening review!”
While some types of managers seek the downfall of their employees, there are those who desire the opposite for their team members. “Most managers have great intentions when they review team members. They’re excited to help the person grow, get better and move up”
Encouragement Is Better Than Criticism
According to Throness, we listen to people whom we believe have our best interests at heart.
“Even when difficult things need to be discussed, it’s under the umbrella of care. We want the person to succeed. For them to fail means we have failed. It’s a completely different approach. People join a company when they hear exciting things about it.They leave the same company when they don’t feel good about themselves in front of their boss anymore.”
“The coaching-based performance review is always to help the other person win. It’s never designed to ‘hammer’ the person and make them feel bad about themselves.
Feedback Is a Two-Way Street
The coaching style of performance review provides two-way feedback. “You’re not just asking the person how they’re doing. You’re also asking how you are doing at being their boss.
“None of us has arrived. All of us can learn. Asking your employee how you can be a better leader models transparency and openness.” Thronnes further stated.
Take our free course preview on Coaching Based Performance Reviews today!
The Coaching Triad Method
The coaching triad method is a tool that can be applied to coaching based performance review.
One executive swears by this method as a tool to improve performance. “Magic happens during…coaching triads because the sessions facilitate incredibly succinct, transparent communication…”
Throness writes extensively on this method in his book “The Power of People Skills.” He recommends this method in scenarios “when you have a more serious situation with an employee that needs to be addressed.” Here is a summary of how Thronnes describes the way a coaching triad is done.
- It involves a group of 3: the employee, their manager, and a third person who is designated as the coach.
- The triad will agree on performance measures that need to happen over a 3-6 month period. And review progress once per month for 20 minutes during that time.
- During your meeting time, cover three things:The employee and manager share for 5-10 minutes each about areas that they believe progress is occurring and areas that still need to be worked on. The coach provides feedback on how the changes can happen more effectively while taking notes of the agreement made between the employee and their manager.
According to Throness, this method works because the coach is an outsider who brings a level of objectivity and accountability to the situation. Knowing that a third party would be there increases the level of accountability for both sides.
“Honest feedback that includes both genuine, sincere care and real accountability is an incubator for making people their best,” Throness concludes.
