Improve Performance: Eliminate the Performance Review

By Bill Cushard

It is difficult to find someone who will say they have had a good experience during an annual performance review process. Go ahead, ask one of your colleagues right now. Whether it is a manager or a front-line professional, most people will say the process is painful, an interruption, and not a valuable use of time. Samuel Culbert and Lawrence Rout, authors of the book Get Rid of the Performance Review, call performance reviews "a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus." I was going to say that.

Performance reviews are intended to be a process during which people can have a performance discussion with a manager about what development is needed and to know where one stands. Instead, these reviews end up destroying employee morale and killing the bottom line.

Think about how annual performance reviews are conducted. Every December, managers must write down what they think of the job people are doing based on several competencies or goals that they do not remember setting a year ago. Then, managers must try to remember how people performed in relation to those competencies and goals nine, ten, and eleven months ago. Believe me, managers dread this. And the quality of most reviews shows it. What's worse is that since the manager cannot remember how someone performed ten or eleven months ago, the annual reviews end up being about the stuff that happened in the past few weeks. Bad, I know, but it gets worse. People who are receiving these reviews feel like the process is being "done to them" rather than an open, two-way conversation about how to grow and develop. Painful. 

So, if it is so painful, valueless, and "a pretentious, bogus, practice that produces nothing," why don't organizations stop doing it?

At Allonhill, we wanted to put an end to this bogus practice. Not that we are particular geniuses, but we know there must be a better way. To find that better way, we did not ask, "How can we improve the performance review process?" We asked, "How can we create an environment in which people could always know where they stand and what they need to do to improve, grow, and develop?" We thought that if we could answer that question, even partially, we could enable a group of people who would and could achieve great things for our clients.

So, when we first embarked on this mission to abolish the annual review, the first thing that happened was that our HR director almost fainted. Once he recovered, we asked more questions. What if we could eliminate the annual performance review process entirely? What if our people could be in charge of their own performance, request feedback from anyone in the company, and make behavior changes on the spot based on that feedback? How much better would people perform? How much happier would they be? And how much bureaucrazy (not a typo) could we eliminate from the system? The possibilities are enormous and have huge implications for working smarter and performing for our clients at a much higher level. 

We take great pride in our mission to bring credibility and transparency back to the mortgage industry. Accordingly, we are channeling this passion into bringing credibility and transparency back to how we manage our people in the interest of creating an environment in which people are continuously improving performance by seeking feedback and adjusting behavior in the moment of need. We are changing the game. Instead of trying to improve an existing process, we are creating an entirely new way of engaging our people in meaningful discussions about performance and career growth. It fits our mission, our culture, and our way of working.

What could have a greater impact on performance and client satisfaction than that?