Why Performance Reviews Fall Short

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It's something that most large companies do and something that most managers and employees dread. The evidence shows that the traditional half-yearly and end of year performance review which has been in place for over 30 years, just doesn't work these days and yet it continues.

Why? Maybe it's the fact that you can take the ratings data and report on it rather than having nothing tangible to say to your executive team - "As you can see from the Bell Curve we have 10% more 4's than 3's in H2 and we have eliminated a significant portion of 1's and 2's from problem teams". WHAT? You moved impersonal numbers around in the hope that it looked like meaningful work was done and in the background those numbers hammered the motivation of your employees because it WAS personal to them.

Nobody likes being evaluated especially when it is evaluation by comparison. There will always be someone better and someone worse. The Horns and Halo effect has shown since the 1920's that humans show incredible cognitive bias when rating the performance of others. No wonder they don't like the process. A study conducted by Wakefield Research earlier this year showed that 94% of executives are happy with the current process while a whopping 94% of employees said it needed to change from the traditional model (yup, those are coincidental figures). What to do about this chasm of thought on performance reviews?

Companies like Reflektive, Trakstar, Clearview and Engagedly espouse the merits of real-time performance review software; empowers employees, links to competencies, 360 feedback, policing of frequency of meetings. These are all good improvements that leverage new tech but still I feel something is missing. They have given us a new hamster wheel but if the cage is in tatters and the hamster is disengaged then the wheel won't turn.

I believe we need to forget about the performance review process and look further back in the system to explain what goes wrong. Go right back before that first meeting with your manager, and keep going, before you signed the contract, and further still to the very, very beginning; the hiring process.

Simply put, the performance review process fails because the hiring process is too often flawed. Giving a performance review to an employee that doesn’t belong on the team is demoralising for the manager, the employee and costs the company money. But Steve! Why would companies hire the wrong people? Here are just a five reasons large companies fail to hire the right people:

  • They hire a recruitment company that is motivated by bums on seats commission

  • They fail to train hiring managers in the best interview techniques

  • They hire a person for a job; not for the potential career

  • Their hiring process is initiated as a reaction to a crisis

  • They don't use the probation period as a chance to exit poor hires

 The list could go on but I think I have made my point. So what does a good hiring process look like? To answer this we need only look at the US Navy SEALs. These soldiers are the cream of the crop and they quite literally NEVER hire the wrong soldier. Imagine yourself being on a helicopter in Helmand province leading a small team of elite operators. You are about to go into combat where the lives of civilians, and of your team, are at stake. Do you want to be thinking about giving one of the team an average rating? Would you want an average person watching your back in hostile territory?

HELL NO! NOT A CHANCE! So how do you know none of them are average……..

The Navy SEAL selection process a.k.a. BUD/S (Basic Underwater Demolition/SEALs).

To become a Navy SEAL you have to meet the optimum standard for physical fitness; minimum standards are ignored. And the Navy SEALs help you assess yourself before you even apply by publishing that standard for all to see. Candidates have to excel at a series of physical challenges and some people train for years to reach the peak of their fitness before trying out. Still, 60% of applicants get sent home at this point.

They don't just select on physical ability either. The Navy SEALs demand that their candidates for BUD/S have optimal self-actualisation to not only survive the training but to thrive on it. A Navy SEALs ability to deal with adversity, problems and discomfort sets them apart - attitude is as important as aptitude. They get the finest instructors who have all been through the same challenges to measure their candidates for a long 32 weeks. These combat veterans know what it takes to survive in the worst situations and test candidates through land, sea and air and of course the infamous 'Hell Week'. By the time they have assessed and challenged their candidates, 90% have gone home. And after that?....... Oh you need another 26 weeks of advanced training.

 In total nearly 60 weeks before you can call yourself a Navy Seal and get assigned to a troop. Now THAT is a selection process. So there is no doubt on the helicopter in Helmand that the person next to you is top notch. No rating system; no bell curve. They've proved their worth and commitment; they were the 10% that made it through the hiring process. So what lessons can we take from that?

 I think we can boil them down to 5 key points:

  1. Write a good job spec and expectations sheet - publish the standard you expect and never take less than that even if you have to wait for the right candidate

  2. Select your hiring managers for their record of achievement - entrust the hiring process to your finest people so that they can hire more fine people

  3. Take your time and get to know your candidates -  a deadline will get things done but make sure it is generous enough so that as many conversations that need to happen can actually happen.

  4. Hire for potential - ask yourself what role do you want this person to play in 2 years, not just now.

  5. Make the cuts - if it isn't working out or you don't see the spark that you did in interview, cut them. That's what a probationary period is for and everyone will thank you for it in the future.

So now, imagine you had followed those rules; what does your performance review process look like when you have taken the time and care to hire well? I bet it'll be much easier. Of course you still need check-ins and constant communication to maintain that high level but you know you've already done the hard part. A performance conversation is much easier when you know, and they know, that they belong on your helicopter.

Save yourself a lot of pain in the future by hiring well now.


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Stephen Naughton