Formulaic performance reviews — with the “rank and yank” mindset — are falling out of fashion.
Accenture, Cigna, Juniper Networks, Twitter, and Microsoft are just a few global companies that have scrapped the forced-ranking approach.
According to this 2015 article in Harvard Business Review, more than 50 large companies are trading in cumbersome, annual ratings for ongoing, conversation-based assessments of performance. Citing additional research from Bersin by Deloitte, the article reports 70% of companies are reconsidering their performance-management strategy.
If your company is experimenting with new ways to evaluate talent, managers at all levels must do 2 things well: Give feedback and hold talent conversations.
The purpose of giving subordinates feedback is exactly what companies have tried to do with the annual review:
- Motivate employees to continue a behavior that increases their effectiveness.
- Stop using a behavior that reduces their impact.
- Encourage them to begin or modify a behavior that will make them more effective.
- Foster their commitment to their work and the organization.
But giving feedback regularly is more effective. Some of the most valuable feedback is given in the moment and on routine, day-to-day behaviors. Plus, when giving feedback is done consistently and well, managers establish and strengthen trust. The more trust and rapport managers can build, the more readily subordinates will accept and act on future feedback, creating a pattern of learning and growth.
3-Step Model for Feedback
CCL’s three-step model for delivering feedback, the Situation-Behavior-Impact Model (SBI), is proven to reduce the anxiety of delivering feedback and also reduce the defensiveness of receiving feedback. It’s a process that may feel awkward or too formal at first, but once managers get some practice they find it is incredibly helpful.
Managers also need to learn how to hold a talent conversation. It is one of the simplest yet most effective ways to develop others. And, if the employee has been given honest, ongoing feedback, these conversations don’t come as surprises.
A talent conversation allows managers to influence others toward improved performance, development and positive outcomes. Talent conversations can happen at any time and can be part of any new performance plan you put in place.
Managers need to be prepared to have 4 types of talent conversations, based on how an employee is doing. Is the employee considered top talent, a solid performer, a potential performer or an underperformer? While the particulars of each will vary, managers will want to follow 6 steps:
1. Clarify the goal. What is the purpose of the conversation? What exactly does each of us want to accomplish?
2. Explore the issues. Assess strengths, vulnerabilities, development needs and performance. Identify motivation and career aspirations.
3. Identify the options. Generate ideas and opportunities for learning and improvement.
4. Set expectations. What do we want to do first? Next? What are the obstacles?
5. Motivate. What support is needed? Are you sure the goals are meaningful?
6. Identify the plan. How will we know you are on target? How will we track outcomes?
The demands placed on managers to meet performance goals can be relentless. Their priorities and challenges shift frequently. When managers give routine feedback and hold meaningful talent conversations, they are able to develop their teams and direct reports in powerful and relevant ways.
Outdated — and hated — performance review systems won’t stand a chance.
CCL’s suite of digital learning solutions includes a LEAD 2.0 package — “Developing Direct Reports with Feedback” — designed to give managers the knowledge, tools, and practice to give feedback and hold effective talent conversations.
You might also be interested in Talent Conversations: What They Are, Why They’re Crucial, And How To Do Them Right and Feedback That Works: How to Build and Deliver Your Message.
I’m amazed that the conversation about performance reviews is contrasted to having on-going informal performance conversations. Since when is it either or or? Performance reviews work WELL when they are coupled with on-going feedback. And then you don’t need to dump them, and figure out some other challenging way to handle compensation issues.
Many of the publicized instances of dropping reviews actually describe that what is being dropped is the byzantine practice of stack ranking performance (ala GE). Performance reviews and ratings are very different from forced rankings.
Hi Mark, thanks for you thoughtful comment. We agree. Our observation that forced ranking “rank and yank” is widely being scrapped and many companies are reconsidering how they do performance reviews now. More are giving weight to ongoing evaluation, which requires managers to be good at giving feedback and holding talent conversations. But it doesn’t have to be either/or, you’re right!
I’m amazed that the conversation about performance reviews is contrasted to having on-going informal performance conversations. Since when is it either or or? Performance reviews work WELL when they are coupled with on-going feedback. And then you don’t need to dump them, and figure out some other challenging way to handle compensation issues.
Many of the publicized instances of dropping reviews actually describe that what is being dropped is the byzantine practice of stack ranking performance (ala GE). Performance reviews and ratings are very different from forced rankings.
Hi Mark, thanks for you thoughtful comment. We agree. Our observation that forced ranking “rank and yank” is widely being scrapped and many companies are reconsidering how they do performance reviews now. More are giving weight to ongoing evaluation, which requires managers to be good at giving feedback and holding talent conversations. But it doesn’t have to be either/or, you’re right!
There is merit in this concept. But I would suggest that the “talent review” works most effectively as a feedback mechanism. In my experience, feedback is the one key ingredient missing between a supervisor and subordinate, and all too often feedback focuses on the negative, rarely on the positive. The performance review has a place in some organizations because it is the basis for bonuses and maybe job assignments. Having spent 30 years in the Air Force, those annual performance reports became part of the promotion equation, and with an organization as large and diverse as the Air Force, it was the best way to separate the high performance people from everyone else.
Another aspect I think many leaders get wrong about feedback, they make it formal, when often times informal feedback is the most effective. That is the feedback that comes from the heart, not the head. Simply stopping by a work station (or wherever the employee is working) and spending a moment to provide feedback on how well something was handled, maybe offer some hints or tips from experience, go a lot further than formal feedback goes. Feedback takes place often…
There is merit in this concept. But I would suggest that the “talent review” works most effectively as a feedback mechanism. In my experience, feedback is the one key ingredient missing between a supervisor and subordinate, and all too often feedback focuses on the negative, rarely on the positive. The performance review has a place in some organizations because it is the basis for bonuses and maybe job assignments. Having spent 30 years in the Air Force, those annual performance reports became part of the promotion equation, and with an organization as large and diverse as the Air Force, it was the best way to separate the high performance people from everyone else.
Another aspect I think many leaders get wrong about feedback, they make it formal, when often times informal feedback is the most effective. That is the feedback that comes from the heart, not the head. Simply stopping by a work station (or wherever the employee is working) and spending a moment to provide feedback on how well something was handled, maybe offer some hints or tips from experience, go a lot further than formal feedback goes. Feedback takes place often…