David Rock, chief executive of the NeuroLeadership Institute, says the answer is yes—if the feedback isconsistent, tied to a worker’s particular contribution and focused on learning and professional growth.
Research over the past decade supports this conclusion, he says, showing that ditching annual reviews and rankings in favor of more frequent conversations not only helps employees focus on work and improve performance, but it is also more humane.
The perception of being assessed unfairly, Dr. Rock said, activates the pain network in the brain in a way that is similar to physical pain. Brain science shows the majority of people who go through annual reviews have a negative experience, resulting in disengagement and feeling devalued at work—even if they score adequately or are high performers. They may also develop poor relationships with their bosses. This translates to millions of dollars in lost productivity and attrition.
“Overall, we think organizations do better when they separate out the few percent of people who really underperformed and have a different process for those and for everyone else, which is usually 97%,” Dr. Rock said.
Such a shift in approach to performance reviews could be in the offing. While 72% of companies still conduct yearly reviews, according to a study by the Society for Human Resource Management, a 2020 Gartner survey found that 87% of HR leaders were redesigning performance reviews.
Consider how a revamped review system—dubbed Check-In—has worked at Adobe Inc. since it was launched in 2012. Employees meet quarterly with their managers, who are trained to give feedback effectively. These structured one-on-ones give employees, who are no longer ranked, a chance to adjust faster. The company says employee retention went up 30%.
“It's a simple conversation about what are you working on? What's going well, what could be improved? And what do you want to focus on next, both for your own career growth and for the business?” said Arden Madsen, senior director, talent management and employee experience at Adobe.
Yet Adobe’s HR leaders also acknowledge the original approach wasn’t perfect. The pandemic upended in-person meetings. Some conversations weren’t structured enough. Employees also didn’t have a centralized place to summarize conversations and goals, and to measure progress over time.
So they listened to employees, and on May 9 introduced an update: Employees could use a web-based check-in dashboard to track conversations and goals, and explore new roles. “Having the muscle to continuously gather feedback from employees has set a foundation of trust, accountability and respect,” said Brian Miller, chief talent, diversity and inclusion officer at Adobe.
Adobe is one of several technology companies, including Microsoft Corp., Dell Technologies Inc. and International Business Machines Corp., to be early adopters of the check-in approach. Professional-services firms such as Deloitte, Accenture and PwC have joined them. Others, such as Eli Lilly & Co. and Gap Inc., have also made the switch.
Meanwhile, Alan Colquitt, an HR executive and research scientist who has spent decades studying what drives employees to perform well, says the shift to redesign performance management could be even bolder.
Since the 1980s, performance management has been shaped around pay distribution, with ratings tied to rewards and allocation of resources, Dr. Colquitt said. A more fundamental shift to optimize performance involves focusing on development, growth and frequent communication, as well as employee profit-sharing, he said.
To be sure, he added, effective performance-management systems should be clear about what kinds of conversations you should have, how many and what they should look like. Employees are driven by not just goals, but also seeing themselves make progress toward those goals.
Coaching, providing feedback and helping employees build different capabilities and skills must be a constant role of supervisors, not an annual event. “The most important plank in culture is that we don’t carry poor performers in the group, team or organization,” Dr. Colquitt said.
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