How to Remove Ratings, Formal Reviews and PIPs
I was recently asked if it was possible to move away from ratings, “mid year” and/or “annual” performance reviews and when things are going badly, Performance Improvement Plans.
I was not surprised by the question when you review the evidence. When performance management systems built on such principles:
95% of line managers say they are a total waste of time and deliver zero value
90% of HR Practitioners say they do not give them the data they need and
About 50% of employees say they are actually demotivating.
My reply was clear. I moved away from ratings, formal reviews and PiP’s over 17 years and we continually turn around the above statistics. We achieve such a turn around by:
Showing HR Practitioners how to replace ratings and formal reviews with a pre-scripted conversation such that managers and employees simply focus on continuous improvement.
If the employee is not performing satisfactorily, we help HR pre-script a ‘difficult conversation’ that focuses the conversation on the management problem rather than the employee’s ‘poor performance’.
In addition to the wonderful support we get from employees, managers and HR Practitioners, the extra feedback we get is that this approach, saves about 80% of the time and cost of the more traditional approaches and we’ve never had a dismissal overturned on appeal.
My colleague was amazed saying he hasn't been able to find any company who has made the move from ratings, reviews and PiP’s and apparently he had been searching globally! He said while some organisations have moved away from formal reviews, no one he knows has been successful in focusing on just two conversations.
To reinforce what has worked well for many years, I provided 2 examples to my colleague:
A coal mine wanted first line supervisors to conduct formal conversations with their direct reports (unionised truck drivers, labourers and trades persons). By pre scripting the conversations in a way that the issues discussed were meaningful and the language simple, 100’s of positive conversations occurred. Better still many improvement initiatives identified were implemented over the next 12 months generating an estimated 6% improvement in productivity. Employees and managers loved it and the HR Department received valuable data that fed into their training plans, remuneration benchmarks and bonus payment process.
An employee was taking excessive sick leave. Rather than blame him, I helped script a ‘difficult conversation’ for the manager focusing on the management problem caused when the employee’s absenteeism was excessive. When they had the conversation it turned out the employee’s father was very ill and the employee was assisting him with doctor and hospital visits. With that knowledge, changes in working schedules were possible so the employee was still able to assist his father and the management problem was overcome.
Is it possible to move away from using ratings, “mid year” and/or “annual” performance reviews and, when things are going badly, Performance Improvement Plans?
Yes. It’s been happening for a long time and is supported by the evidence. My colleague is convinced, are you?