Why You Should Ditch the Annual Performance Review

Take all those annual performance reviews and throw them away and never look at them again! Paul Simkins, The Values Coach, gets on his soapbox and talks about one of the worst things we do to our employees (and ourselves). The dreaded annual performance review. We'll talk about why it is so terrible, ineffective, and a complete waste of time. And we'll talk about what to do instead.

Plus, a recipe for a special Dutch Oven dish called Java Coffee Cake with Espresso Glaze! This would be absolutely PERFECT for a cold-weather campout breakfast item or simply a Christmas morning treat! The recipe is from The Geezer's Cookbook  You can find the recipe, and many more, on the Smoke and Ash Facebook group or by emailing paul@BoldlyLead.com.

You can get a copy of Paul's eBook 15 Innovative Ways to Show Employees You Care and Not Break the Bank by emailing him at paul@BoldlyLead.com.

Join the discussions at our Podcast Facebook group here.
Learn more about Paul Simkins on his website.

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Transcript

Producer: 0:00

The tech leaders toolbox podcast is brought to you by Paul Simkins and the Boldly LEAD program, focusing on helping tech leaders like you, and the frustration of low performing teams, and losing excellent employees, so they can increase productivity by 50%. Go home on time, and sleep better at nights.

Paul Simkins: 0:22

Hello, and welcome to the tech leaders toolbox. I'm Paul Simkins. And we're here because how you lead today determines how your team succeeds tomorrow. This is Episode 47 of the podcast. Have you ever conducted a performance review? Ever had one done for you? How did you feel about it? Either way, today, let's talk about why you should throw out the annual performance review and never use it again. Are you ready? Let's go. Well, you know what time of year it is it see Oh, here it is December. And of course, you know, your first impulse may be to say, Oh, yeah, it's a holiday season Hanukkah or Kwanzaa, of course, Christmas. That's the season it is. But if you are a manager or an employee of an organization, it is also likely the time for an annual review. And if you are a manager, you probably absolutely dread. This time of year, the hours you spend, you have to spend because someone has decided that you need to do an annual review of every single person who reports to you. And you have to spend hours going through their entire work history for the year. And coming up with this analysis that typically fits onto a page or to an analysis of how well they did this year. And whether or not they're deserving of a raise, and if so, how much of a raise are they deserving of. And it takes so much of your time. And again, you are probably absolutely dreading it, and want to know what your employees are dreading it, too. And in fact, I'll come right out and tell you, I think that annual performance reviews are practically a mortal sin. It they're horrible. There are few things that we do as leaders that are less productive, all around than giving an annual performance review. Now, that's not just guesswork on my part, there's actually research to back that up. First of all, not everybody, of course, still does annual performance reviews, but they're still somewhere around 70% of organizations still use the annual performance review. And 87% of both managers and employees. So not just not just the managers who are dreading having to do it, not just the employees who have to receive it, both of them together. 87% believe they're ineffective, and useless. No. Why? Why? Well, first of all, why do we still do them? Well, a lot of times it just because that's the way we've always done it. But the thing is, is why are they so bad? You know, that's a question that may come up is, well, what's wrong with the annual performance review doesn't don't people want to know how they're doing. The problem with that is that what it's counting on, is it's counting on you to be able to remember each and every situation of the past year, as the one doing the valuating to remember each and every situation for each and every employee for the past year. And be able to remember that accurately. Remember that objectively, and perform an effective analysis on something that happened back in January of the year that had an impact. And you just can't do it. I don't care how good your memory is. You just cannot do that. It's inconsistent with being a values based leader. Because as a values based leader, we focus on strengths. We focus on leveraging what people do well and how they best serve the team to reach the organization's goals. Nothing in a performance review does that it's inconsistent with the values we have set forth. If especially If your values are, you know, you have values like to be kind, to help add value to people to raise them up instead of bringing them down. It doesn't do that it focuses on the negative. It's like, you know, I, I used to make the joke for years when people would talk about doing job interviews, where if you've ever had a job interview where somebody asked you, what's your greatest weakness? And I would tell people never answer that question. Because it's the question of, you know, give me the gun to shoot you with basically, it's a negative focus. And it's not your job to tell them what your weaknesses are really. And and along the same lines. With annual performance reviews, we're focusing on the negatives, we're not actually focusing on performance improvement. We are focusing on what's wrong and very rarely do we have any viable solutions for that. It's also wholly subversive, to aligning efforts with vision. So again, it goes against everything we want to do as a values based leader, everything we want to do when we have put our focus on our employees, of helping our employees utilize their strengths to their maximum ability, and add the best value to the team, so that the team accomplishes its goals. So why do we do it? Well, a lot of times, like I said, before, it's tradition, it's just the way it's always been done. And in fact, really, performance reviews, annual performance reviews really weren't being used heavily, until somewhere around the 50s. And 60s is when it started to get integrated. But so it's not really the way it's always been done. It's the way it's been done since the 50s, or the 60s. And then of course, some people will say, Well, you know, if it ain't broke, don't fix it. Well, there's the problem. It is broke. It's broken badly. And another reason a lot of people don't do still do annual performance reviews is well, they don't really know what to do instead, they're just not sure they got to do something, they know how to do something. So well, this is the something we do this. But again, what we get into here is it ignores the complexity of the human nature. And it assumes that everyone can be judged on the same limited scale. And they can't, if you regard every single person that works with you, as an individual with unique abilities, unique personality background, and so forth, then you know, that you can't judge them all on the same scale, you have to judge them based on their capacity, based on their abilities based on their strengths. And so with annual performance reviews, we are evaluating people on the exact same limited scale, that a lot of times the way these performance reviews are laid out, is they're laid out in what we call Likert scales, which usually, again, is either numbers or words like, you know, meets minimum requirements, does not meet minimum requirements, exceeds minimum requirements, exceptional performance. And, and again, it's always a limited scale, or even if it's like a one through five or a one through 10. It's a limited scale, and very much subjective. And it forces us to judge people on that very limited scale with no real kind of evaluation. Criteria there to go by, except for a scale. And it forces us to measure people against each other. Because again, when we don't have a value a usable criteria with which to judge the individual, the only thing we have left is to judge them compared to someone else. Right, and you can see where that's not going to work entirely. You can have a 20 year employee who is a high performer and you're going to evaluate your one year employee who is still learning to trade still trying to learn all the tricks, you're going to evaluate their performance based on this 20 year performer. You can see right off the bat how unfair that is. And how it really doesn't give you a good picture of what this newer employee is capable of. And also, it really doesn't give you a good picture of what the 20 year old employees 20 year employee is capable of. Because, again, they've been in the job for 20 years, how have they stretched themselves? How have they improved? Where can they improve, and, and so you got to, you got to evaluate, you got to be able to take each individual and evaluate them based on them. And not on anything else. Performance annual performance reviews, don't let us do that they force us to compare. And they focus, as I said, before they focus on the negative, you end up with feedback that instead of building people up, it destroys them. Another study I read recently, and what they found was that even good performers, even top performers, when given their annual performance reviews, and reading the feedback from their annual performance reviews, actually had negative feelings towards it. It made them feel worse, it did not make them feel better. It did not reinforce who they were, it did not reinforce their contribution to the organization, it did not increase, it did not reinforce to them their value. And it made them feel worse, even the high performers, it is feedback that destroys instead of building up. It's entirely one sided. It's from the perspective of you as the manager. And again, no matter how good you are, no matter how kind you are, no matter how considerate no matter how people focused you are, you are subjective. And you are going to evaluate them subjectively. And it is entirely one sided. And they're never objective. Frequency is also a big problem with the annual performance review. As I said earlier, you know, you you wait until the end of the year to look back at everything that's been done in the last 12 months. Which you know, you think about this for a minute, you got somebody who spends, let's just take the average 40 hours a week with you, for four weeks out of a month. So that's what 80 to 120 hours a month, multiply that by 11, or 12. I'm not a good math major. But you can see there's a lot of hours, you've got to remember, for each and every employee, and be able to evaluate and objectively evaluate each and every moment. And the impact it's had, you can't do it. It just can't be done effectively. Think about it this way. The problem with doing an annual performance review is what you're really put in the position of doing is having to put out a fire that's already been blazing for a while. So in other words, if somebody's performance has been an issue for the last 12 months, you've let it fester for 12 months. And then at the end of the year you go Yeah, well, you haven't been quite up to par. So yeah, we're gonna have to put you in a poor performance improvement plan. So you've let that fire burn for fall for 12 months. And even if it hasn't been 12 months, let's say it's only been half the year their performance was bad. You've let it fester for six months. And by then, the fire has already done a lot of damage. Would you not agree that it's easier to prevent a fire than it is to put out one that's been blazing for six months?

Unknown: 14:07

Of course it is.

Paul Simkins: 14:10

That again is a reason why the annual performance review just doesn't work. Let's take an example. We have Adam Adam is one of our employees is a very gregarious person. He's been with the team for a few months. Because of his personality, everybody likes Adam. He always makes everyone laugh. He's always ready to make the party lively. The problem is, is that Adam for the last eight months has been consistently not meeting his deadlines for deliverables on projects. It puts the project behind. It causes everyone else have to work longer and harder to make it up. And so far, because Adam is so likable, the rest of the team has been good natured about it. But you know, that's not gonna last very long. So you need to have a conversation with Adam. And it's got to be unpleasant. Well, again, we we find reasons around that we justify it, well, we'll we'll address all this in the annual performance review. But again, Adam has been with us for a few months now say, let's say about eight months, he's been with us. So we've had eight months of have atoms, unacceptable performance, having a negative impact on the project, having a negative impact on the team, and therefore a negative impact on the organization. So if we save it for the annual performance review, now we we've got eight months of problems that we now have to try to fix. And a lot of times when it's gone that far, then the mindset we get is, we start to thinking that the only way to fix this is we got to let Adam go, it's just too much, too much under the bridge now too much to try to fix. And we're just gonna have to let Adam go. When in fact, there is the strong possibility that Adam could be a very valuable team member. So conversely, if instead of waiting until an annual performance review, let's try this scenario. have regular vital conversations instead. You know, one of my mantras is I talk about one on ones you should be having weekly one on ones with every single one of your employees. Every single person that reports you do you need to have a one on one with them weekly. And during those one on ones, you want to listen to them. That's the primary thing you want to do is spend time listening to them asking them questions, let them evaluate themselves even. So Adam, how do you think things have been going this past week? Where are you having difficulties? What are you challenged? What do you think you need help with? What do you think you could do better? What do you think would help you do better, I focus more on coaching them, rather than telling them and keep this very informal. That's the benefit of a one on one. It doesn't have to be a formal process, although there are ways to document that. But keep it informal, move it to a formal process only when things circumstances demand it. When continual coaching doesn't seem to be making progress. That's when you want to move to a formal process and start documenting your conversations. And also focusing more on very specific things that need to be done. So if we do that, if we go with that kind of model, we do our regular one on ones that allow us to get a better feel for what's impacting Adam, how he feels about the work he's doing. Whether whether we're utilizing Adams best strengths that allow him to add the best value to the team, answering question for him, helping him determine corrections and helping him develop a plan to implement those corrections. Timing is critical with this is the right thing at the right time. But mastering timing is difficult so many of us fall victim to what one of my mentors, john Maxwell calls the law of diminishing attend the law of diminishing intent. He defines the law as one of increasing inaction specifically, the longer you wait to do something that you should do now, the greater the odds are that you will never do it. In other words, every time you put it off or later, wait until the annual review, the less likely it is you will address it ever. So the time is now the time to address it is now. So what are some ways in which we can do that? Just remember some of these basic ground rules for vital conversations with your employees. Because if you talk strictly out of emotion, you're going to take steps back and not forward. So the first thing is, is get yourself straight, get your head straight. Try to control The emotions that you're feeling, try to understand those emotions so that you don't use those emotions to have that conversation. eliminate any assumptions you're going to make. This is one of the things that a lot of people have problems with in these kinds of conversations. And why they tend to avoid them is because they tell themselves a story in their head. They assume what the other person is going to say how they're going to react. And so they get defensive before they even say the first word to the person. eliminate your assumptions. Tell the story of Adam. So one of the reasons I wanted to talk to you today, this is what I am seeing. Does that seem to jive with what you are seeing? Tell the story. Don't accuse. Don't use your absolute words. Don't use your Nevers and always and then hear their story. And then after you hear their story, agree to action. Come up with the action plan to make adjustments or improvements. Sometimes it may mean adjusting their role finding another role for them. Or simply a plan of skill improvement where they can practice maybe they can be guided or mentored by someone with more experience. Sometimes that plan of action can simply be another meeting date and a time to continue. It can sometimes end up eventually meaning separation. But you need to make sure that you've done everything you can up to that point because an employee's an investment. They're also again, a member of the team Adam is well liked. So getting rid of Adam may not have the kind of impact you think it would have. But just remember that without positive action, resentment grows on both sides and productivity fades further away. So ditch the annual review, choose instead to be in touch at all times. prevent those fires, instead of constantly trying to put them out. We'll be back in a moment.

Producer: 22:30

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Paul Simkins: 23:00

All right, so here we are in the third part of our show. And again, being a big fan of outdoor cooking in particular, actually, I like any kind of cooking but I particularly like outdoor cooking. And I have created a Facebook group called smoke and ash. And on the smoke and ash Facebook group me and all of my friends are out there and we talk about our cookers. We talk about recipes and ideas and types of foods that we like to cook. And I invite you to come out and join us if you're into that come out doesn't matter your level of experience. If you're brand new to outdoor cooking, or if you've been doing it for years, we would love to have you out there on the smoke and ash Facebook group. And so one of the things I like to do during the show here too is share with you an outdoor cooking recipe. Now a lot of these are easily adjusted and done indoors. If you're not into outdoor cooking, you can do these indoors, and I'll talk about that as well. But I also always make these recipes available on that smoking ash Facebook group. So if you like a recipe that you hear here, you can go out to the smoke and ash Facebook group and get it or you can just send me an email at Paul at boldlylead.com and I'll be glad to send you a copy of the recipe. What's today's recipe? This is a good one and this is great for campouts because it's done in a Dutch oven and it comes out so good. It is a Java coffee cake with espresso glaze, Java coffee cake with espresso glaze. And I got this from again, a cookbook I've shared several recipes from called the geezer cookbook written by Dwayne Pritchett. And this whole cookbook was written specifically for scouters for people in scouting program to use when they go on campouts. So for this the Java coffee cake with espresso glaze. For the cake, you're going to need two cups of flour, a teaspoon of baking powder, a half A teaspoon of baking soda. You're going to eat a quarter teaspoon of salt, three quarters cups of butter or margarine softened up a cup of sugar, two large eggs, two teaspoons of vanilla, a cup of sour cream, two tablespoons of instant espresso coffee mix dissolved in about a teaspoon of hot water. And then for the glaze, you want three tablespoons of strong brewed coffee, one and a half teaspoons of instant espresso powder, and then three quarters cup of powdered sugar. So the first thing you need to do is in a medium pot, you're going to mix together the flour, the baking pode baking powder, the soda and the salt. And then in a large pot, add the sugar to the margarine or butter slowly and cream it together. Then add your eggs one at a time beating well after each egg and then beat in the vanilla. And then add the flour mixture alternately with the sour cream into the into the big pot where you have your butter and your sugar and margarine. So you'll add a little bit the flour mixture a little bit of sour cream, go back and forth and keep blending it in between and then transfer about a third of the batter to a small pot and blend in the espresso mixture thoroughly. And then spoon about a half of the plain batter into a Dutch well greased Dutch oven. Or again, line it with parchment paper even better. Spoon the coffee batter over the plain batter, spread it out evenly, then the rest of the plain batter on top and spread that out evenly. And you're going to bake that at 350 degrees for about an hour. So again, if you're doing it in an oven at home 351 hour, if you're doing that outdoors, you're going to use coals and you're going to put about 12 to 14 coals on top, about six to eight coals underneath. And again, cook it for an hour. Once it's done, let it cool for about 30 minutes. And then you're going to turn it out of the Dutch oven and lay it out. And then you're going to mix your glaze ingredients together real well. And then just pour it all over the cake. Let it sit for about 10 minutes, and you're ready to go. It'll be a delicious coffee cake with a glaze. And you will likely not have any leftovers because people will just eat it up. That's it. It's Java coffee cake with espresso glaze. And again, you can find that out on the smokin dash Facebook group. Or if you want a copy of it, just email me at Paul at boldly lead.com. Alright, so today we talked about ditching that annual performance review. And instead, rely on regular communication with your employees have those weekly one on ones rely on coaching rather than telling. Get their story, tell your story, make sure that there is understanding. And always, always make sure there is an action plan of some sort. And hey, I'd like to do you a favor. This is a I'd like to ask you to do me a favor rather, if we're adding value to you in this podcast. Well, I would like to help spread the word around I want I want to bring more people in here. I want to help share these principles with others. And I need your help to do that. So if you're listening to this podcast on any podcast app, leave us a review, give us a five star review, share this podcast with other people and help me build the audience up around here so that we can share these principles with more people, I would really appreciate that. And you can always come out and join us both on the smoke and ash Facebook group. Also we have a Facebook group specifically for the tech leaders toolbox Podcast, where we kind of extend the discussion. So again, be sure and subscribe and review the podcast and come out and join us in social media anytime you want. And of course you can reach me anytime at Paul at boldly lead com or call me at 321-355-2442 Well, that's it for this week. Until next time, go out and be the leader. You were meant to be