Why are you wasting your time doing Performance Reviews?

I am listening to the hallway chatter while at a client. I am listening to HR saying they are going to distribute a log to all leaders so they can update monthly any notes related to an employee's performance. Well intended I am sure but what a waste of time.

All companies that I have been associated with conduct Annual Performance Reviews. Except for one company here is what i have experienced:

• The Review at best reflects only the past 3 weeks of the employee's engagement.

• I have seen logs suggested, tickler files all sorts of ideas, but still the performance review was a reflection of the past 3 weeks.

• Many are tied to bonuses then a manager is dealing with a huge batch of Performance reviews to be completed by a certain date so the bonuses can be calculated and distributed ... but still they only reflected the past 3 weeks of employee performance.

• To mitigate the batch mentality some companies then require the Annual Performance Review to be completed by the employee's anniversary or birth date. Again it only reflects the past 3 weeks of the employee's performance.

To confirm my concerns while at LZB I was asked to create an Enterprise Value Stream Map of the annual employee performance review process. Here is what I found:

• From start to delivery the cycle took 9 months

• Each Employee Performance Review consumed over 150 employee hours, not including the actual review.

• The bulk of te hours was invested in follow-ups and expediting the employee review process.

• The actual employee review ... ready? was a reflection of the previous 3 week's performance of when it was written.

Now let us journey to Toyota and how Annual Performance Reviews are conducted. This process made a whole bunch more sense to me even if it took more invested time with the employee.

It is NOT a Performance Review but rather a Progression Plan

Progression Plan is reviewed quarterly with the employee

Each Employee Progression Plan contains employee specific metrics and a detailed training plan. Yes, the metrics include improvement suggestions made.

Managers must share Employee Progression Plans to the Leadership Team.

You start the year sitting with the employee developing jointly acceptable metrics. We also determine a career path for the employee (typically up to 2 levels senior) and the required training to make it reality.

Every quarter we review the Progression Plan with the employee and jointly agree to status. Typically all Progression Plans are presented to the Leadership Team for review and additional input. It is important to note that the Leadership Team is reviewing only those employee's 2 levels below them .. so Team Leads. The Team Leads also meet as a cross-functional team to review Team Members.

Fourth Quarter Reviews are the most time consuming. You need to close out the previous year and score the results. Not only does the employee get scored but also the Leader if they failed to enroll the employee or provide them with training. As the old year is closed, you then create the plan for the coming year.

I like this approach because a review cannot be tainted by one person's opinion. Plus if an employee has expressed interest in another department that Team Lead is now aware and may tap on the employee when an opportunity arises.

The other benefit is that it is much easier to think about an employee during the past quarter than a full year even if the reflections is indeed just the past 3 weeks.

Finally, if an employee get surprised during a performance review you have failed them as a Leader. Employee's are always seeking immediate feed-back. Perhaps, those employee's that get surprised is because their leader did not want to deliver bad news.

Personally, I much prefer using Progression Plans since I sincerely want our employees to get better with a purpose and that they have the opportunity to progress within the organization where their desire resides. Much better than the Annual Performance Review that in reality is a 3 week reflection.