Love ’em or hate ’em, performance reviews are a fact of life—every employee is reviewed by whoever is one level up.

I’ve read a fair number of articles, arguments and discussions and thought I ‘d share one of the better discussions I’ve seen—better mainly because so much of the discussion comes from working managers.

On November 27 Harvard Professor James Heskett posed the question What’s to Be Done About Performance Reviews? in an open forum in HBS Working Knowledge. He started with an excellent commentary and summation of the practice and questions about it, including forced ranking, then opened the forum to readers.

There are 93 cogent comments, all well worth reading, providing substantial food for thought.

Although I found all the comments of value, it was number 47 that resonated most clearly with me, probably because it played to my own personal prejudices regarding managing.

Maybe it is because my background was as an academic sociologist before I ran a business, but I think this excellent discussion would be strengthened by looking at a “big picture” context. Most comments are looking inside the company/organisation at the performance of employees, but not linking it to wider considerations.

Three things strike me. First, many (not all) of the comments imagine the performance of employees to be a function of their inherent capacity or current motivation. In many cases, however, a poor performer in location X is a good performer in location Y and the difference lies not in the person but in the context and in how she was managed. One of the best Air Force leaders I know told a wonderful story of being a squadron CO of a squadron that was not performing as well as he would have liked. He called his four immediate subordinates in, closed the door and said, “Guys, things aren’t going well. What am I doing wrong?” When a colleague asked about the response, he said, “Well, they spent 15 minutes telling me. Then they spent an hour talking about what they were doing wrong and we never had to have that conversation again.” So the idea that the managers are the first issue and need training, which a couple of people have mentioned, seems to me the starting point.

The second thing, which again only a minority have mentioned, is that the bottom 10 percent of a given organisation might still be outstanding. It is said of the Australian Cricket team, which is ranked number 1 in the world by a long way, that it is harder to get out of it than to get into it, a comment that refers to the enormous stability of the team and the unwillingness of selectors to drop players who are going through a bad patch. In almost every case in recent years, the player going through the bad patch has emerged into good form and the side has won competition after competition.

The third and most important thing, however: Not only is there a “war for talent” going on, but most OECD counties are facing the fact that the population structure is aging and fewer young people are coming onstream to replace baby boomers. In this content, making the primary link between performance reviews and performance improvement, while simultaneously downplaying the link to firing, is likely to be a strategy that will become increasingly relevant.

Stephen Mugford

CEO

QQSR, Australia

Once you’ve read them all, share them with other managers in your company; then, most importantly, set aside enough time to discuss them and create a stronger, more beneficial, review function within your own company.

This entry was posted on Friday, January 26th, 2007 at 12:12 pm and is filed under Business info, Communication, Culture, Leadership, Motivation, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
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