I recently came across a discussion on my new favourite network Skiller, about the benefits and horrors of yearly objectives and evaluations. Why not just assume that people to do their job well, and that would be the end of it?
Well, it’s not that easy, especially not in the traditional systems of objectives and reviews/evaluations most companies are using today. Different things drive different people, and “one-size fits all” is not necessarily the best way to go.
Some of those participating in the exchange expressed their frustration over objectives that they cannot relate to or that cannot be measured. Some saw reviews or evaluations as being extremely sensitive to the relationship between the team members and their bosses: Good relationships gave good reviews, and bad relationships gave bad reviews, given the same work input. Others found it motivating, but there were also those who said that they would put some tasks aside just because they were not part of the objectives.
From personal experience, people I have talked to often do not see how for example corporate objectives actually help them perform in their daily work. “The objectives have nothing to do with my tasks, what’s the point”, or “They are unattainable, how can we increase productivity by x percent when we are already squeezed to a maximum”. Many have the feeling the objectives are flowed down just because they have to be, and don’t influence the level of personal motivation on the job.
The SMART method, which is often pulled out to describe how objectives should be designed (specific, measurable, actionable, realistic, and time-sensitive) dates from 1954! However, there seems to be not only a challenge in setting objectives SMARTly, there is also a general issue with both motivation and performance in many companies today. Employers in the west sometimes struggle with tough economic conditions, unmotivated staff, and competition from emerging, or now rather established, economies elsewhere. Even well written “SMART” objectives seem to make people feel more evaluated than valued, something that goes against most “modern” management theories.
Various studies have been conducted on the topic, and one is presented by Deloitte in the April edition of Harvard Business Review. Deloitte decided to revamp their system of yearly objectives, and looked into many of the points that I mentioned above.
Simply put, they found that they used 2 million hours per year to discuss ratings of team members between managers (not with team members), and that these discussions focused mainly on what people had done, rather than on what they could do in the future. Looking at it that way, it sounds like a pretty useless way to develop your teams and your company performance, doesn’t it?
About the complaints that the relationship you have with your boss will impact your rating more than what your performance does, Deloitte found something which is not quite the same, but still very interesting: 62% of the variance of ratings turned out to be based on the rater’s perceptions (personal interests in the job performed etc), and only 21% was based on people’s actual performance. Who would have guessed that you’re not rated on your actual performance but on other people’s perceptions of what work is interesting? You can learn more about what a manager finds important during the review, than what you actually do well in your job.
Finally, and this is what I like the most, Deloitte found that high performing teams have a lot of people who say “At work, I have the opportunity to do what I do best every day” (personally, my dream is to work in tandem with someone who loves administrative tasks…). These teams also had a global feel of commitment; all team members felt that the others contributed as much as they did, and that they were inspired by the company’s mission. How do you make all teams work like this?
Deloitte chose to change their interaction between managers and team members to become more regular, more about how future tasks could be carried out, and less about how past tasks had been treated, and more adapted to individual team members’ ways of working. This requires a regular check-in with team members, to make sure the manager inspires future work rather than evaluate past work (which is what happens if the check-ins become too scarce).
During “performance reviews” the managers are not asked to rate how the year went, but rather how they see the evolution of the team members during the coming period. Is this person ready for a promotion? Is there a risk of low performance? Would I give this person a top bonus if I could? Do I want this person to stay on my team or would he or she be better of doing something else? All these questions are oriented toward the future, rather than on past performance. Furthermore, they are centralised around the team member, rather than between managers discussing that team member in separate management conferences. These check-ins and the visionary thinking by managers have become part of what managers should do not in addition to evaluation work, but instead of it.
So, it turns out there was a good reason why David asked the question: “what’s the point with having objectives, variables & annual reviews?” [extract, freely translated from French]. Instead of using objectives, reviews, and evaluations, there is a good reason to use project management, previews and evolution to get the best out of your team.
Suddenly, the process of working toward objectives becomes much more inspiring!