Performance reviews are more trouble than they’re worth for both employees and managers. A company seeking to improve employee engagement should consider replacing reviews with a system of co-creation, whereby managers coach and support employees, rather than critique and appraise them.
Your hands feel unnaturally cold and your legs won’t stop shaking. You nervously arrange and re-arrange the papers on your desk. The waiting is hard but it’s not the worst part. The worst part is the employee sitting down in front of you, visibly tormented over the possibility that what you’re about to say will completely destroy him. This tortuous ritual is done yearly at organizations around the world. They call it “the performance review,” but we know it better as, “the worst day of the year.”
No one likes conducting annual performance reviews. They are stressful for both the manager and the employee. In fact, neuroscience studies have shown that giving out negative performance feedback can cause real physical pain for the manager and the employee.
The typical performance review involves a manager assessing an employee’s work from the past year. Employees are sometimes asked to provide their own self-reviews and very often salary increases are tied to these reviews. This is stressful for employees because they fear that every little mistake will be counted against them. Furthermore, neuroscience tells us that when people are given a critical appraisal that conflicts with their self-image their brain’s defence mechanisms are activated. This results in them being unlikely to find the motivation to change.
It’s not fun for the manager either because even constructive criticism can still be interpreted as negative or can hurt an employee emotionally. Studies have shown that managers will often put off conducting annual reviews because they are not motivated to do them. Reviews don’t tend to bolster productivity or engagement and they are very seldom rewarding to either party.
Today organizations want to engage their employees by creating an environment that’s built on their values, driven by their vision and enhanced by company collaboration. Unfortunately, the traditional model of performance appraisal does not support this desire. In order to facilitate engaged employees and foster a collaborative, supportive and productive work environment, performance reviews need to be revamped.
We suggest replacing the annual performance review with a system of continuous coaching and communication between the manager and employee.
We call this system “co-created engagement.” The concept is that rather than sitting down once a year with employees and telling them how they can improve, co-created engagement provides regular feedback and support that encourages employee development and productivity.
Co-created engagement is about managers helping their employees to gain knowledge to improve their performance, to develop competencies and to be able to recognize their strengths and capabilities. Acting as coaches rather than critics, managers provide direction, instruction and feedback throughout the year. This is done through routinely scheduled meetings or informal, daily chats.
Co-created engagement includes:
- Managers recognizing that not all employees are engaged in the same way. In fact, according to Bob Kelleher, there are seven motivational drivers.
o It is important that managers learn what drivers motivate each of their employees. Furthermore, managers should be aware that there is a tendency for them to engage in the ways that they themselves are engaged.
- Managers and their employees sitting down to discuss what tasks, roles and goals each has in mind for the employee’s position. They will discuss in detail what needs to be done, how these things will be accomplished and when the manager will check-in on progress—formulating a plan of action with a timeline for communicating progress and completion of tasks.
- Managers observing employee performance and providing opportunities for development.
- Employees having the opportunity to regularly ask questions, seek clarification and receive suggestions.
- Managers providing feedback on performance and encouraging employees to self-reflect on their own performance.
[Note: This article was originally published at Herdwisdom.com]
 Williams, Ray. "It's Time to Abolish the Employee Performance Review." Psychology Today. Psychology Today, 27 June 2010. Web. 27 Mar. 2015.
 Kelleher, Bob. Employee Engagement for Dummies. Hoboken, NJ: John Wiley & Sons, 2014. Print.