Try to find one person, just one, who likes performance reviews. We’ll wait.
As pervasive as they are, performance reviews are well-intended at best and deeply inequitable at worst. The value they offer employees and organizations is, well, unpredictable.
At the Pando Horizons summit, Pando founder and CEO Barbra Gago sat down with Jason Medley, Chief People Officer at Codility, to discuss the death of performance reviews. They explain why these dreaded bi-annual meetings need to be taken off our calendars, what an effective replacement looks like, and how this shift will help create a more agile workplace.
The way it’s always been done
Barbra: So, Jason, let's talk about how our current career progression processes fall short of meeting talent where they are. Where is it breaking down?
Jason: I think there are two major factors: traditional performance reviews are extremely inequitable, and they aren’t transparent. People often don't understand where they sit with their manager or their performance until they get to the review, which is twice a year at most organizations.
We also see tons of biases involved, one of the biggest being recency bias. People will focus on what's happened in the last month or so versus what's happened over the entire year. This is a really huge problem when it comes to fairness in performance management. Organizations make compensation increases based on performance, so this has a tremendous impact.
Barbra: Exactly. Performance management typically comes from companies evaluating compensation bands. It’s great for employees to be in a level or a comp band but what are those levels based on? What’s the context of expectations for each role? These are the gaps that perpetuate the process of inauthenticity.
Jason: And let's be honest, on the operations side, this process literally stalls organizations for a period of time. Most companies, especially those in growth mode, don't hit the deadline, so they have to extend it. It's just this barrier that handicaps organizations, and people get really frustrated by it. They don't believe in it. People want to grow; they want to see progress in their skill sets. A conversation once or twice a year does not do that.
The shift to equitable career progression
Jason: Imagine a world where you work at an organization for a few years, and when you're transitioning out, you have documentation of the skills and the competencies that you've improved on during your time there. You can speak to the goals and projects that helped you build your skill set. You can prove what you’ve done and how you got from one position to another.
Barbra: So what do we need to do to recreate this system? What does that actually look like?
Jason: We have to change our mindset to be iterative and experiment in the talent space. These programs need to be continuous, transparent, and structured. Performance management needs to be a process, an action that’s always happening. It can’t be one or two conversations a year. We all deserve feedback all the time, and in fact, that’s the only way we get better.
We need systems and platforms that allow us to request and receive feedback at any time. That's how we get signals earlier, and quite frankly, that's how our organizations get unblocked. It gives us the opportunity to learn before it's too late. We've all heard stories of someone walking into a performance review, hearing some feedback for the first time, and being so surprised by it. But evidently, it's been well-known by managers for a long time, and they've been waiting for this moment to express it. If those conversations would’ve happened from the jump, everyone could’ve made a lot more progress.
Employee growth without performance reviews
Jason: At Codility, we recently ran a survey of over 500 engineers, and two answers we got really stood out to me.
First off, respondents said money was the most important factor when looking for a job. I think that could be a sign of the times we’re living in. Then we asked, “What's the number one reason you left or are considering leaving your most recent role?” And the number one answer was learning and development—in other words, people aren’t feeling like they’re growing their skills.
Barbra: We really need to be thinking about how we bring people into the organization and build paths to develop them. Obviously, the more that an employee grows, the better impact they're gonna have on the business. But we should be doing everything we can to unlock that growth and that potential with everybody.
Jason: Our systems and programs need to reflect the transparency, the authenticity, and the equity that people want. As people, we're not very good at delivering feedback as it is. The moment we hear the word feedback, walls go up and we're defending ourselves. It doesn’t work when we just rely on people to give and receive feedback. We absolutely need technology to help us. And there's great technology out there, Pando being one of them. This is why we've adopted it at Codility—because it gives us the opportunity to give and receive feedback in real-time and contextually.