Considering the Benefits of Ongoing Performance Reviews
When was the last time you walked into an annual performance appraisal without a care in the world, knowing that your review was going to go flawlessly? Unless you’re an all-around model employee, chances are you’ve experienced some level of anxiety going into a meeting designed to evaluate your performance and essentially rate you based off your work that year.
Stuart Hearn, founder and CEO of Clear Review, identified a problem with that traditional model and did something about it. His software focuses on providing organizations a platform for continuous performance management whereby employers and employees can easily engage in an ongoing dialogue that is beneficial to both sides.
Could you start off by giving us a brief rundown of your professional background in HR and how you started Clear Review?
Hearn: I’ve worked in HR for over 20 years and the story of how Clear Review was formed began at the start of my HR career. I did a degree in HR management in university and my first job after I graduated was working with a large food manufacturer that had a pretty robust and forward-thinking approach to managing people’s performance and development. They had an annual appraisal which was very in-depth with an end-to-end review — they had what was considered pretty leading-edge at the time.
As someone who had just left university, I was used to receiving feedback about how I was doing every week at my tutorials. So when I joined that company, it was a weird experience as I was only going to be told how I was doing twice a year. Plus, in order to get that feedback, I was going to have to fill out loads of forms and they told me that not to expect the top performance rating because no one ever gets that.
After that, I moved on to work for a media company that had a very different approach where they didn’t actually have annual appraisals at all. There was no formal process. What they did have was this radical candor approach where you were always told how you were doing because people weren’t saving up feedback for a formal review. The language wasn’t always beautifully phrased, being a media company, and there was the occasional “four-letter feedback,” but the principles were interesting to see the difference.
My experiences with these very two different approaches to employee feedback got me thinking about how you could utilize the best of these two practices. Large organizations still need to have processes, yet if the processes are too formal and long-term then they don’t really work.
Why did you think it was important to focus on continuous performance management as opposed to the annual model that is most commonly used in many large organizations?
Hearn: For a number of years I ran a performance management consultancy and our experience with a lot of organizations made us realize you could easily streamline an appraisal process and put it online and that improved the process, but we felt like it wasn’t actually improving people’s performance. We did a lot of research into this and found a very interesting meta-study that determined there was no evidence that the annual appraisal process improved anyone’s performance. In a third of cases, they actually found that it was making it worse.
Considering the amount of time and effort managers have to put into annual appraisals, the fact that they weren’t adding any value in terms of performance improvement was a fundamental issue we felt needed to be addressed. That’s why we decided to build a software to support a more continuous model. The evidence shows that having regular one-to-one discussions increases productivity and employee engagement, which leads to higher levels of performance. Let’s focus on the things that genuinely work in terms of improving performance rather than keeping doing things just because we’ve been doing them for a long time — it doesn’t mean they’re right.
How has flexible and remote working impacted performance management? How are organizations keeping up with these trends?
Hearn: First, we need to have mechanisms that give people feedback in the moment because as a distributed team, there’s not as much opportunity to sit down face-to-face.
Second, we have to have the ability to collate the information that we need to drive a good quality, value-added discussion when we do have those discussions. If people are working remotely I’m not going to be sitting next to them and seeing how they’re doing on a day-to-day basis.
So we need to be getting that feedback from as many sources as we can. From people that they’re working with on a day-to-day basis, such as customers. When we have that kind of feedback feeding into a check-in conversation, it can tell us about that person’s strengths, how they can leverage those further and any areas of development that can come from that.
You’ve spoken before about the difference between performance improvement and performance measurement. Why do you think so many organizations are still focused on the measurement side of things?
Hearn: I think in business life, there are lots of adages about “if it’s not measured, it’s not managed” and things like that. I think the trouble with performance management is that, I would say, it’s an art rather than a science. The more that you try to put measurement into it, the more work you create and the more people play the system. I’m still yet to be convinced that measurement is really objective and studies have been done on ratings that found there are so many biases in play that we can’t rely on the data.
The second point is that if we focus too much on measurement then we don’t focus on development and performance. Again, a lot of research has been done about this. Performance measurement and performance improvement conversations don’t mix very well. Imagine you’ve had a really great honest conversation with a member of your staff and they’ve told you some really insightful things about areas where they want to develop, uncertainties that they’ve had and so on. I’ve said on a few occasions, just to test the theory, “can you imagine if we’d just had that conversation, but there was going to be a rating given at the end of it? Would we have had the same conversation?” Every time they say absolutely not. They would’ve talked up all the things they’d done and not mentioned any of the things they were worried about or needed to improve.
Performance management should have an emphasis on performance improvement. That’s not to say there shouldn’t be a measurement aspect because organizations need to measure things if they’re going to make investments, but improvement and measurement need to be decoupled. I would say 80% should be focused on improvement and 20% on measurement which is a big shift from where performance management has previously been which has been about 90% measurement and 10% discussion around improvement.
What kind of data do you think is most important for an organization to keep track of if they want to focus on performance improvement?
Hearn: If we’re talking about a world where a lot of the traditional metrics have proved not to be reliable and it’s about having more qualitative discussions — what should we measure?
I think where measurement is now more relevant in this new world of performance management is looking at employee engagement. How engaged are they feeling as a result of those conversations and feedback they’re getting from their manager? How often are they having those discussions about feedback? The measures should focus on whether these types of conversations are actually happening, how frequently and the quality of those interactions.
If we believe the research, and I fundamentally do, about how having regular, quality discussions and feedback can have a massive positive impact on employee performance and engagement, then I think there’s a case for measuring some of the inputs rather than focusing so much on subjective outputs.