Recently, some of the top newspapers are covering the topic of “performance reviews” and how they are becoming extinct as science was recently released that shows they actually cause a decline in employee morale. Is the science cutting edge or just catching up to what Deming has been teaching us since the 1970’s?
Ratings and quantitative metrics should be the outcome of what a system or process can produce vs. subjectively assigned onto people and their performance, especially as we understand the concept of variation. Variation is a fact of life and present in every system. People cannot control all of the different inputs into the system therefore do not alone produce poor or great results.
Things like the economy, our customer’s viewpoints, the weather, quality of goods all flux which makes each interaction different, causing common cause variation where not all of the outcomes are because an individual created or caused them. Here are two articles on the topic:
How Performance Reviews Can Harm Mental Health
Why The Annual Performance Review Is Going Extinct
Eliminate Performance Reviews?
What Deming did not say was eliminate performance reviews. What he advocated for was to eliminate the ratings and tying compensation to these ratings. He promoted increasing the number of times informal conversations occur between an employee and their supervisor so both can talk about priorities, systems work, development of the employee and resources needed.
Aileron moved to this approach over a year ago, and overall it feels like we:
• Improved efficiency through the elimination of time consuming year-end reviews and ratings.
• Moved toward more regular dynamic conversations about improving the system and developing people.
• Understand how this boosts morale and incorporated into DOC and professional management.
• Shared with clients to support them in creating thriving cultures and developing people.
What we stopped doing:
• Rating performance on system results.
• Tying compensation to these ratings.
• Chasing and wasting time on common cause events.
People are extremely vital to a company’s success as their focus is to design, study, improve and operate the systems of the organization.
What are your thoughts?