I've been listening to the podcast now for a few months and I'm getting a ton out of this. For someone who comes from the technical arena this is really valuable. I've been leading a technical team for over 8 years and only in the last few months do I start to really get what "management" is about and you guys are a big part of that - so thanks!

I work in a state government funded organization that implemented a performance review system that actually had effects on year over year pay increases for individual employees approximately 7 years ago. Prior to this system, the performance review process was a real joke in the way it was used (everyone was great unless you wanted them to go away) and this was designed to help put some dollars behind the ratings to give them more relevance.

Unfortunately, given the timing of the implementation (as budgets really crashed) and the subsequent political winds, the program has only had funding once that actually raised the "Outstanding" performer's salary by any more than that of an average performer (one year they funded it but still gave everyone the same raise).

This has generally led to a continuation of the less than stellar use of this performance planning and review process by many managers (including myself at times).

This year (despite the non-funding again) I decided to try to revamp how I'm doing things for my direct reports (many of which are managers themselves) and we have embarked on a goal setting process so far is encouraging. I'm asking them to think of goals on a completely separate list from the performance review form and then we can select from that list to fill out the performance review paperwork (but still keep in touch through the year on _all_ of the goals).

That being said, I still see from my directs a real lack of belief that performance reviews are worth the time they take (not to mention the time to do them well) and that the whole process is pretty worthless if it has no financial impacts (as I said this is a technical organization so the "good of mankind" argument doesn't really fly).

Any advice for someone in my situation? I strongly believe that the continually increasing expectations on our organization require us to do a better job of managing and giving feedback to our employees and while I can do this with my directs, I'm not (right now at least) seeing much way to encourage the culture to change toward one of managing performance.

Thanks for any advice you can provide


Mark's picture
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Thanks for the kind words. Glad the casts are helping you be more effective.

Your problem is like what so many others managers face. The review process at many many work places is often assumed to be, talked about as relating to, or specifically intended to have impact on pay. Unfortunately, too many managers I've known RUIN this intent (if it actually does filter down to where they are) by applying their pool of funds uniformly, being unwilling to have tough conversations and tell someone they got less than the average/pool percentage.

In my experience, that's much more a function of managers feeling they lack credibility (and they're right) to give feedback at the end of the year that they didn't give DURING the year. So, they cave...

And end up BEHAVIORALLY exactly where you are ORGANIZATIONALLY: annual reviews have no impact on pay, or no DIFFERNTIAL impact on pay.

So, what to do?

First, accept it. People WANT pay increases, because they know that the cost of living is going up and they aren't saving enough for retirement. But that doesn't mean they are willing to compare their performance to a standard you agreed to a year ago, and show you how much more they delivered than a standard (or zero) raise justified. In other words, they WANT them... they might even feel entitled to them.

But they PERSONALLY don't feel they've EARNED them, other than in accepting the organization's previous behaviors around doling them out. Most employee's response to pay increases are much more along a socialistic line than a meritocratic one.

So the thing to do is increase the feedback you give throughout the year, since THAT feedback is NOT linked to pay, and has the salutary effect of actually improving performance. Give feedback, coach, do one on ones, and talk openly about performance over and over again. Make it like breathing rather than holding your (collective) breath.

Then, YOUR part of the annual review has credibility, and it's about performance, all stuff they've heard before. When you get to the part about pay, THAT is the organization's part, and your people WILL understand that. (It also has the effect of reminding people that org exist to allow specialization of labor, and all the best performance from the back office specialists won't make up for those sales specialists failing to bring in any revenue.)

The process, done right, NOT focusing too much on pay, is NOT worthless unless your directs believe that it's all about pay.

Bottom line: ANNUAL REVIEWS ARE NOT THE TOOL OR THE WAY TO ENCOURAGE CULTURE CHANGE TO PERFORMANCE. The focus on pay proves that. Change the culture by talking about performance all the time, and making reviews a formal afterthought and recitation of the year's work. If the company won't/can't pay for that, well okay.. but do this for a year, and YOU WILL have a performance minded culture.

And, if you've hired well, I suspect you won't have the turnover problems others might have.


And stop worrying about the culture of the org. Change YOUR area's culture, and leave it at that. It either will or won't spread. Stay focused.

Armbrust's picture

Thanks Mark for the help.

Excellent advice. Giving feedback in the moment definately doesn't come naturally to me, but I've begun to try to do it as frequently as I think about doing it and so far I'm not getting anyone balking at the idea at least.

Listening to Manager Tools is really helping me stay focused on these day to day opportunites for improving performance. Keep up the good work!

Brent's picture

If you haven't already, I suggest you also make it clear to your direct reports that the official performance review system isn't working, but that you simply have to fill out the forms. Your directs may feel frustrated that you're "needlessly" using two systems at once.

I think that if your directs are aware that you're trying to find a compromise that works, they'll be more willing to work with you on this.

Mark's picture
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Brent et al-

At the risk of offending someone who just told me I rock (Brent), to his point: please don't tell them what Brent suggests.

I don't think I made this point as clear as I could have. You can't "NOT FUND" a performance management system. Performance management has NOTHING to do with funding. My point with my post is that this is about FEEDBACK, which is about BEHAVIOR. The moment managers act as if "funding has been taken away", by talking about "filling out forms", you lose future ability to use the performance managements system for what it's FOR: managing performance. And remember: your one on ones, coaching and feedback will ALSO be undermined - they're part of that system.

When it comes to annual reviews, it's helpful to remember these tenets: Adults are responsible for their behavior. Managers are supposed to encourage effective behavior. Aggregated employee behavior leads to performance. Performance creates results... and managers are evaluated on RESULTS.

Pay, used in conjunction with performance management, is a REWARD. We're not talking about rewards here... we're talking about performance. There are too many examples (I would say majority, to tell the truth) of performance improving dramatically without ANY increase - or even connection with - pay.


esanthony's picture

In my current situation, where there is no review process at all (hmm another thing for my action item list). I plan to use the annual and quarterly reviews as part of the coaching process. Regardless of link to pay, the reviews serve as an overview of how the coaching model is working. Dont get me wrong, reviews are not about the act of coaching thats for O3's. Reviews allow me to see if I am being effective overall in coaching my directs. Also as I may have mentioned in another post, I did initial reviews with my new directs so that they and I new exactly where we were and where we are going.

Mark & Mike what do you think about using the review process for this purpose?


Brent's picture

[quote="mahorstman"]Brent et al-

At the risk of offending someone who just told me I rock (Brent), to his point: please don't tell them what Brent suggests.[/quote]

I'm certainly not offended. I am very much enjoying the discussion!

Re-reading the original post, I realize that I may have been unclear on the problem. I thought the manager had an existing system that wasn't working, and he was implementing a new, better system that he planned to feed into the existing system, since he had to use the existing system. Looks like this wasn't exactly the situation.

In the scenario I described, I was concerned that the manager was unclear on how to present this situation to his direct reports, thus my suggestion of explaining the situation regarding the old and new systems.

I definitely agree that regular reviews are useful, and I'm not suggesting that managers avoid them or find ways to work around them. I do think that employees can be [i]de[/i]-motivated by bad and confusing performance review systems, so they benefit from understanding how the system is being used (or not used).

Er. I have a nagging feeling that I'm confusing the issue more. I'll stop here. In any event, good discussion and points made all around!

Mark's picture
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HA! Can't tell you how many times I have been writing a post and thought, "well, this sure isn't helping..."

No worries. I got it.