Performance reviews: getting it right

John Langhorne/Tree Full of Owls

Archimedes said “give me a long enough lever and I can move the world.” Some years ago, I visited with a potential client embarking on a culture change project. The lever they chose was performance review (PR). I tried to convince them this was a poor choice for a lever.

Culture change in organizations must quickly involve managers, generate immediate change and focus on the core business. An individual development tool does not meet these criteria.

Many employees and too many managers regard upcoming PRs with little enthusiasm. Some companies have discarded PRs and suffered no consequences of note. However, there is a good case to be made for such a tool. The problem is, many companies are unclear about its purpose.

Performance reviews should be a conversation with the employee about her professional development. As such, the person should be an active participant in the process.

The failure to clearly articulate and follow-through with this purpose has added dimensions to PR that make its continuing use problematic. Reviewing these may suggest to you some ways to improve your process.

Many organizations conflate PR and progressive counseling/discipline.  Progressive discipline is a series of escalating steps that invite low performing employees to improve their behavior. It is designed to assure that managers treat people fairly, provide opportunities and support for employees to change and create a paper trail to support the best interests of the company. Ideally, it begins in a collaborative style with feedback/coaching and becomes progressively more authoritarian as the person fails to improve. Often, PR may result in separation.

Mixing these two separate tools destroys any possibility of using PR for professional development. No one should hear about a performance problem the first time in a PR.

PR is not performance management. Performance management is a tool to guide and develop the competence of employees and typically uses coaching with a heavy emphasis on thoughtful, timely, accurate feedback about performance.  For more on this see an earlier column:

A second and perhaps even more negative effect on the usefulness of PR is using it to manage compensation issues with the employee.  When compensation enters into a conversation, everything else flies out the window. The incentive and disincentive effects of compensation are complex.

The valuable information gleaned from a PR should be used in making compensation decisions. Companies have many mechanisms for making this work. I prefer something like a compensation committee that make such decisions, certainly with the active participation of the person’s direct manager.

Third, there has been an inexorable drift, almost a rush, to try and make PR more rigorous by introducing some type of quantitative measurement, usually ratings. As someone who has had plenty of training and experience in the measurement of human behavior, I generally agree this is a good philosophy. Unfortunately, quantification can rocket out of control.  If five scales are good, then 40 must be eight times better. Not! I once saw a PR consisting of five pages of ratings. Ratings often preclude useful conversation, the heart of any management system, and invite negotiation about the scores.

If PR is about professional development, then such a process should involve the person and assure that there will be no surprises. In any meeting, there are three times you can touch people: in the set-up for the meeting, in the meeting itself and then by following-up.  The set-up is particularly important, “Well begun is half-done.”

Consider structuring the meeting by using a handful of focused and simple questions such as:

  • What have you accomplished? Make your best case.
  • What haven’t you accomplished?  Why?
  • What do you want to accomplish next?  Why?
  • How can I help you?


In a meeting prior to the review, discuss the purpose and process of PR and share the questions. Ask the person to give some thought to these and develop a written response. Explain that when moving from the spoken word to the written word there is an increase in mental rigor. Emphasize this is important and she should give it some serious time. State that you will also answer the questions and prepare a document. Notice it is impossible for the employee to answer Q3 if she doesn’t know what your goals for her and the department are next year.

Make sure you budget enough time for the meeting in a quiet, comfortable place where you won’t be disturbed. As in any meeting, the less you speak and the more you listen, the more you will learn. The test of a PR is the person’s emotional response. PR should be a positive conversation, unlike the last stages of progressive counseling. You may be surprised by the responses to Q4, heed them.

A side effect of this approach is it requires the person to carry out a self-analysis.  How people do this will provide information about their ability to change.

Carried out thoughtfully, PR is a powerful tool for professional development, promotion decisions and as a core set of information in any succession plan.