Management Myth 25: Performance Reviews Are Useful

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Summary:

Everyone needs feedback about their work. If you’ve done something great, you need to know—sooner rather than later. And if you’ve done something that wasn’t great, you need to know that, too. But people don’t need to be stack-ranked against each other. That doesn’t provide people any information about how they perform their jobs.

Bill popped his head into Jan’s office as he was leaving for the evening.

“Jan, do you have a minute? I have to do performance reviews tonight. I was going to drink Scotch and work my way through all of them.”

Jan laughed and said, “Sure. Scotch might make you feel good, but it will definitely not solve your performance review problem.

“Why are you still doing performance reviews? I stopped doing them. I worked with HR and convinced them performance reviews were a useless relic of the past. What do you want to get out of performance reviews?”

“Me, I don’t want anything out of them. I do them for HR.” Bill was as sure of this as he was of the fact that he needed liquid courage to write them.

“That’s nonsense. You have one-on-ones, right?”

“Well, I mostly have them. I mostly have them every other week.”

Jan gave him the what-are-you-thinking? look. “That’s a problem. If you don’t have regular one-on-ones, you can’t do performance reviews. But the problem isn’t the review. The problem is feedback and building a trusting relationship, isn’t it?

She explained more. “The idea behind a performance review is that you provide feedback to your employee. Now that we are agile, do you have any idea what your people are doing on a daily basis?”

“Uh, no. They work independently. Sure, if they need me, I help. But I don’t help much anymore.”

“OK, so why would you do performance reviews?”

“I guess I can’t,” Bill responded.

“Exactly. You need the team to provide feedback to each other. Do they know how to do that?”

“Sure. They’ve been doing it all along. I’ve been coaching some of them on how to provide feedback when they’ve been a little confused on how to do it. Sometimes I even suggest the right words to use.”

“Excellent. So do you need to provide a performance review to anyone your team?”

Bill thought for a minute. “No, everyone here works together on one cross-functional team. But I have a few people in Colorado who work as a group and are not part of a cross-functional team. What do I do about them?”

“Whom do those people work with? Can those people ask for feedback from the people they work with?”

“Sure, I guess they can.”

“The question is this: What value do you add as a manager in this equation? Can you possibly know enough about what these people do to provide them feedback? Or are you just mucking up the works?”

“Hmm, I think I’m just mucking up the works,” Bill admitted. “But what do I do instead?”

“How about you provide them feedback about the work you can see? Maybe even the work you can see that they perform as a team? Don’t people want to know where they stand?”

“Well, they want to know where they stand relative to one another, right?”

Jan took a deep breath. “No. Do you want to know where you stand in relation to all the other managers?”

Bill thought for a second and said, “No, I guess not. I was going to say I thought I was a great manager. But from the questions you’re asking me, I guess I’m not. I don’t really want to know where I rank in the manager list.”

“Exactly. People need feedback. They don’t need ranking. Besides, how can you rank testers against developers against business analysts or product owners? They all work as an interdependent team. You can’t say, ‘This person is number one. This person is number two.’ That’s craziness.

“But people do need feedback from the people they work with. Do you work with them?” Jan persisted.

“No.”

“OK. Then how do you propose to give them feedback, especially when you haven’t been keeping up with the one-on-ones?”

“OK, Jan, you’ve convinced me. Now, how do I convince HR?”

“I know just how to do this. Come with me.”

People Need Feedback, Not Ranking
Everyone needs feedback about their work. If you’ve done something great, you need to know—sooner rather than later. And if you’ve done something that wasn’t great, you need to know that, too.

But people don’t need to be stack-ranked against each other. That doesn’t provide people any information about how they perform their jobs.

User Comments

5 comments
Jeremy Carey-Dressler's picture

I don't disagree with your general assessment, but this does leave lots of questions.
 
1. If you don't have reviews, how do bonuses work?  How can a company know who is contributing and who isn't?
2. Without paperwork we introduce possibilities of lawsuits, particularly for big companies?  If a man is paid less than a woman and it is found out, using your logic, discrimination lawsuits are reasonable since there is no ranking.  HR likes this paperwork to try to protect the corp.  Granted Netflix has a solution of 6 months severance, but do you have any other alternatives?
3. You are arguing that management doesn't need to exist in the traditional sense (since paperwork has been a big part of the job).  If agile has killed the ability of the manager to know what is going on and can't review the employees, why have a manager at all?  Why not replace people-oriented managers with project-oriented managers?
 
- JCD

January 14, 2014 - 6:37pm
Jeremy Carey-Dressler's picture

First of all, thank you for the thoughtful response. To answer your one question, my questions were generated by looking at it from a previous employer and how they saw the world. They used KPIs which were generated on a quarterly basis, typically from the bottom up (at least in my group). Employees would state what sorts of goals they would like to do, and possible a ‘stretch’ goal that would go on for more than one quarter. Based upon an employee review, both of your general performance and the KPIs, you’d receive a bonus that quarter. At the end of the year, the grades would be averaged and if the company did well a secondary bonus was provided.

Without going into details, teams often were encouraged to have heroes, so having teams evaluate each other doesn’t seem very objective. Because they were scared of being sued by former employees they felt more documentation is better (and they were not my first company to feel/act that way). They had managers with 20-30 people under them and pretty well all managers had time for was fire drills and paperwork. Mentoring 20 people is near impossible, and with reviews 4 times a year, your talking about only a few days per-person after attending meetings to play defense against surprise changes.

February 3, 2014 - 3:07pm
Madhava Verma Dantuluri's picture

On a understanding front, this concept looks amazing in Agile but may not helpful when you need to provide the ratings to HR team. However you are absolutly right and change should come from the HR management side and they should give us new template to do the reviews once in a month or quarter rather than once in a year.

January 25, 2014 - 1:12am
Johanna Rothman's picture

Hi Madhava,

Why does HR need ratings? What purpose do those ratings serve? I am serious.

  • Do the ratings help the work get done better?
  • Do the ratings help decide what training people need?
  • Something else?

All of that should be a private conversation, governed by feedback. HR should not be involved. Unless HR is in there, helping to do the work.

This is called triangulation. It does not help people do work cooperatively, which is what we need in software. It prevents people from doing so. Why would you do it?

 

January 29, 2014 - 8:01am

About the author

Johanna Rothman's picture Johanna Rothman

Johanna Rothman, known as the “Pragmatic Manager,” helps organizational leaders see problems and risks in their product development. She helps them recognize potential “gotchas,” seize opportunities, and remove impediments. Johanna was the Agile 2009 conference chair. She is the technical editor for Agile Connection and the author of these books:

  • Manage Your Job Search
  • Hiring Geeks That Fit
  • Manage Your Project Portfolio: Increase Your Capacity and Finish More Projects
  • The 2008 Jolt Productivity award-winning Manage It! Your Guide to Modern, Pragmatic Project Management
  • Behind Closed Doors: Secrets of Great Management
  • Hiring the Best Knowledge Workers, Techies & Nerds: The Secrets and Science of Hiring Technical People

Johanna is working on a book about agile program management. She writes columns for Stickyminds.com and projectmanagementcom and blogs on her website, jrothman.com, as well on createadaptablelife.com.

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