Performance development reviews (PDRs) are traditionally conducted annually between an employee and a manager to identify the employee’s progress and performance during the year and agree their goals for the following year.
If you read nothing else, read this…
- Employers can use peer reviews to help with the performance development review (PDR) process.
- New technologies offer an opportunity for employers to ask employees about their peers.
- A recognition scheme can be easily integrated into a PDR.
PDRs can also be linked to motivation and recognition programmes. For instance, the Chartered Institute of Personnel and Development’s (CIPD) 2009 Performance management in action survey, an online survey of 507 HR professionals, found that a large majority of organisations use PDRs as part of their performance management programmes.
The attractiveness of using a PDR is that it provides a consistent way to evaluate employees and assign rewards accordingly. However, PDRs face a fall from favour among employers as they are exposed to new tools and ways to recognise employee performance: World at Work’s 2010 The state of the performance management survey revealed that 58% of HR managers gave their performance management process a ‘C’ grade or worse.
Martin Alden, head of B2B and Partnerships at Wickes, explains that the main problem with PDRs is their inflexibility. He argues that employers should use these more regularly and more tangibly: “A PDR is something that’s most powerful when it’s used as something when you live and breathe it, rather than just a paused moment in time.
“What often happens with employers who don’t invest in their PDR system, is that they use it as a badge of honour for employees to hang something on at the end of the year. For instance, usually what happens is that [an employer] will run a PDR, and the [employee] will put it away in a drawer until two weeks before next year’s PDR. The employee then realises they need to achieve the objectives they agreed upon last year in two weeks.”
Regular reviews are key
Alden’s view is supported by the CIPD’s Performance management in action research, which revealed that more than 82.8% of respondents agreed that appraisals are a cornerstone of performance management, and also that 90% of respondents felt that regular meetings were an integral part of performance management within an organisation.
If regular meetings or reviews are not taking place, a formal PDR can seem outdated and ineffective, creating negativity around the process. Eric Mosley, chief executive of Globoforce, explains: “The main reason for this negativity is because they’ve been around for decades and the format hasn’t changed. Also because employees generally don’t like having a review with their manager because he might not have seen the great work that they’ve done over the year. As well as that, because some things can change rapidly over a year, an annual peer review can be outdated when it is conducted.”
Mosley explains that employers are moving towards crowd-sourced performance reviews. In his book, The Crowd Sourced performance review, how to use the power of social recognition to transform employee performance, Mosley argues that HR practioners can fix the rigidity problem of PDRs with the ‘wisdom of crowds’. He says: “There’s a move towards getting more input and getting more data. Employers are looking to get peers to help in the process because they are around their colleagues throughout the year. The main advantage is that peers see the great work people do throughout the year. As long as there’s some mechanism to give that feedback frequently, then it’s recorded.”
Mosley’s stance is supported by fresh research: the Spring 2013 Society for Human Resource Management/Globoforce Employee recognition survey, which polled 800 HR professionals, found that 90% of respondents said feedback from an employee’s peers is more accurate than that of a supervisor or manager.
The research also found that 85% of respondents are currently using, or would consider using, social recognition, a system that empowers employees to recognise each other for great work. Also, 78% of respondents said crowd-sourced recognition would be helpful data to incorporate into performance reviews.
Mosley adds: “Employers conduct social recognition programmes, which give peers the opportunity to give positive feedback on discretionary effort, where an employee has carried out a task which is above and beyond their job specification. They work by allowing peers to nominate one of their colleagues for an award. Over a year that creates a robust catalogue of what an employee has done and it can be taken into the annual review at the end of the year. Therefore, an employee has some commentary from colleagues for a manager to take into consideration
“The advantage of this is that it can be very rewarding and motivating for the employee, and they can feel that if they do great work, it will be recognised. For example, the number one reason why employees become disengaged is because they don’t feel recognised or appreciated. People want validation and enforcement from the wider community.”
Recognising corporate values
Colin Hodgson, a sales director for reward and recognition at Edenred, says: “In this day and age, technology is very much king. Technology is allowing organisations to deliver far more from their recognition programmes than ever before. It’s given employers a lot more visibility: visibility about who’s interacting with their recognition programme and, more importantly, how they’re interacting.
“Most PDRs, across most organisations, have some kind of cultural value. For example, how do employees act against the employer’s corporate values and how do they contribute to the working environment. So, immediately there’s a correlation between recognition and appraisal because of the association with cultural values. Where we are seeing opportunities is to start to use information that’s available in the recognition programme and to draw it out for the purposes of contributing to the annual appraisal.”
Hodgson identifies that this could work in practice on two fronts: employees could log onto a recognition system and extract data about the number of times they have nominated colleagues for activities associated with good behaviour. Secondly, a line manager may share that same viewpoint. Therefore, they can identify how many nominations an employee has received and therefore how that employee contributes to the employer through their day-to-day activity.
Performance reviews have a long and storied history, but, put bluntly, largely as something which is done to employees rather than something which motivates and inspires them. For Frederick Winslow Taylor’s Scientific Management Approach in 1911, performance review was something managers did between themselves to establish what tasks workers should do.
Even by 1957, Douglas MacGregor (he of Theory X and Y fame) was finding himself ‘uneasy’ at the way in which performance appraisal puts managers in the position of ‘playing God,’ in their judgments on employees. And today, although surveys continue to indicate that up to 98% of employees find performance reviews unnecessary, one Society for Human Resource Management (SHRM) survey found that 90% or more of managers, let alone employees, approach performance reviews with a sense of dread.
But it does not have to be like this. At their heart formal performance reviews should be an honest and open conversation between colleagues. That they generally are not is largely because the are often the only occasion managers discuss performance with employees. And because they are often linked to reward and promotion, they are more like a job interview (or worse, a hatchet job) than a useful reflection on individual or collective performance.
Formal performance reviews will only work when they are a single reward-linked occasion among many hundreds of regular informal honest conversations about performance, and ones which favour the employee’s voice rather than the manager’s. Reviewing performance should be embedded in all team practice: indeed decades of research on teams by Professor Mike West finds ‘regular opportunities to collectively review team performance’ one of the defining practices of high-performing teams.
And one of the key characteristics of outstanding leaders from the Work Foundation’s recent major project is that they excel at giving time and space to others. A culture of regular honest and open reflections on performance is what is needed to drive engagement, and what will make formal performance reviews rewarding for the individual and the organisation.
Benjamin Reid, senior researcher at the Work Foundation
CASE STUDY: PEER 1 HOSTING
Peer 1 Hosting has a traditional annual performance review cycle, but it starts the beginning of the year with a process called Peer Promises, an objective-setting exercises. The system enables employees and managers to spend time together and collaborate to set their promises to deliver and be accountable for the forthcoming year.
Helen Ives, HR director, says: “Everything we do from a learning, recognition and performance standpoint is very collaborative and peer-to-peer led.”
The organisation’s Peer Promises system has an objective about employees’ great ideas, identifying what they can bring to the organisation and what goals they would like to meet over their career.
Ives adds: “We try and keep the system side of reviews as light as possible and focus on conversations. We see ourselves very much in the relationship business and in order to deliver a good system we have to have good, motivated people.”
The organisation also runs a Team Awesome recognition programme, which is an online programme where employees can recognise each other when they are spotted ‘living’ the employer’s values.
Ives says: “That’s had a remarkable impact on our engagement and motivation.”
For instance, the organisation’s engagement score increased in 2012 from 39% in 2011 to 51% in 2012. It is also due to introduce an online tool, which will enable its employees to write and create online training for each other.
Ives adds: “As a technology organisation, we have a lot of young and gifted people working here with a lot of knowledge and we want to make the most of that by creating a platform for peer-to-peer learning.”