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“Human beings in a number of instances prefer negative recognition as opposed to no recognition at all.” (Nile Journal of Business and Economics, 2017)

In our last blog post we touched on the benefits of separating intrinsic motives (i.e. development) from extrinsic motives (i.e. salary-hikes) during the performance review process. For some companies this concept might seem alien, especially in firms that have used money as a primary motivator. But it’s important to get this right, because lack of development focus is a big reason why performance appraisals fail.

So exactly what are development-centric reviews; and why do we need them?

In a nutshell, they involve more collaboration between managers and employees, and more ownership for the employee; development-focused questions; and the use of a goal or OKR system to plan and execute change. They also take place within a wider growth-oriented culture, which supports the review process on an ongoing basis.

Development vs. accountability

If performance reviews make you think of lay-offs, you’re picturing a review that values accountability over development. To understand the difference, imagine three years ago a big agency hired a promising graduate called Sally. Her resume was impressive and she took to her new job like a duck to water. Now promoted to manager, she finds leadership difficult and her work is suffering. If this year’s review finds her accountable, she might be let go. If her review finds her in need of development, she’ll receive support and training to get her back on her feet.

Historically, the balance between accountability and development changed depending on the HR theory; access to talent; and economic climate. When talent is scarce, for example, retention and development become priorities. But when talent is plentiful more companies are ready to “hire and fire.”

What’s wrong with accountability?

The problem with accountability is that it puts the onus on people, not on their actions. It tends to assume that poor performance means poor employees, without considering whether performance could be improved. This approach describes a fixed mindset, while development aligns with a growth mindset.

These are two concepts defined by Standford researcher Carol Dweck. In trying to understand motivation and success, she found that a fixed mindset - the belief that people are unchangeable - inhibits self-improvement and ambition, whereas a growth mindset embraces continuous learning and progress. In other words, the attitude that people can be developed actually cultivates success, hard work and resilience to failure. Who wouldn’t want their reviews to endorse these qualities!

So how do you get development right?

Great development-focused reviews empower employees to motivate themselves, even if they’re still being guided by a manager. When reviews provide a clear opportunity for the employee to take ownership of their career, it reduces friction between their personal needs and the needs of the company. Don’t tell the employee where you want them to be: ask them how they want to grow and what they need to get there; and make sure you work with them to implement their development plan.

Development-focused reviews also consider whether employees are working to their strengths. Talk show host Dr. Eckart von Hirschhausen calls this “the penguin principle”. On land penguins appear clumsy and awkward, but in the water they move with elegance, agility and skill. Use the review to understand which way the employee is naturally inclined. Do they have an appetite for more responsibility? Another skill set? Or would they excel at mentoring someone else?

Further approaches

  • Ask the employee what they think about their own progress
  • Train supervisors to talk about development in reviews… and ask employees whether they notice!
  • Give managers and employees the necessary tools to record development-related information, like contributions, pitfalls and improvements
  • Scrap employee ranking systems. Ranking encourages competition between employees, discourages collaboration, and produces comparison bias.
  • Mediate manager-employee relationships with a third-party mentor who supports the review process.

Start questions with “what”

Keep your review questions open-ended - you don’t want to end up with a load of ‘yes’es and ‘no’s. Managers and employees might be asked of each other:

  • What do you consider their biggest achievement since the last review?
  • What should they keep doing? What should they change?
  • What development goal should they prioritise?

In addition to the above, peer-to-peer reviews could ask:

  • What do you appreciate most about them?
  • What support could you offer for them to further develop in their role?

And a self-assessment could ask:

  • What are the three biggest challenges you’re currently facing?
  • What do you consider your three core strengths?
  • What are 1-3 of your key learning & development goals?

Alternatively you could seek quantitative data by using a five- or ten-point scale to rate different company skills and values. If your company especially values innovation for example, you could ask “how far does this person drive innovation?” Other examples of company skills and values include motivating others; prioritising effectively; and communicating well. Note that although the answers are quantitive, they shed light on qualities not outputs.

Lastly, end review talks by discussing and aligning development goals. This turns the review from a judgmental event into a productive process, leaves the employee feeling motivated and gives the review a clear sense of purpose.

From dreaded to needed

It might seem difficult to revamp your current performance review system in an era where employees feel more skeptical than loyal to their companies. But with the right training, tools and attitude, performance reviews can be transformed from a dreaded event into a needed process that employees can use to become their best selves.

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