Five Steps to Better Performance Management

It's performance review time at our company - you can smell the fear and depression in the air.

How have we managed to turn something that should be good - some feedback on your performance, a discussion about next year's goals, and a little extra money - into something that almost no one appreciates?

Do you dread performance reviews? Either giving them or getting them?
Well, you don't need to. Here are five steps to making your performance reviews less painful and more productive.

1. Set Expectations in Advance
If you don't do this... don't even bother with the other four steps. It's critical that you let people know what constitutes performance at a 'meets expectations' or 'exceeds expectations' level.
Two cases in point:

• You ask your team to reduce costs by 20%. They succeed, hitting 21%. Does that performance merit a score of 'needs improvement', 'meets expectations', 'exceeds expectations', or 'far exceeds expectations'.
  The answer, of course, is 'meets expectations'.
  I can guarantee, however (because it's happened to me), that a team where expectations have not been set will score themselves as 'exceeds' or 'far exceeds'. It's human nature. Clearly articulate the target for 'exceeds' and 'far exceeds' and you won't have this problem.
• My favorite example - We have a category on our reviews for 'safety'. Every year, every direct report of mine gave themselves a 'far exceeds' for safety. I held a meeting and explained, "If you save a life, you get 'far exceeds'. If you kill someone, you get 'needs improvement'. Otherwise? You get 'meets needs'. Are we clear?"
  Everyone said yes. And then gave themselves 'exceeds' or 'far exceeds'.
  It took me two years to reprogram this behavior.

One more key point. Make clear that a 'meets expectations' is good!
Grade inflation has pushed us to a point where no one is happy unless they get an 'exceeds expectations'.
Set expectations. It'll save you a lot of trouble down the road.

2. Embrace the Bell Curve
This is probably the most difficult part of performance reviews. Everyday, a manager comes to me and says, "Everyone on my team exceeded expectations! How can you expect me to punish them just to fit a Bell Curve."
My response?

Bullshit.
Show me a team or company where everyone is performing at the same level, and I'll show you a mediocre team or company.
In 20 years, I've never been on a team where everyone exceeds.
If they did, the expectations were too low.
This isn't Lake Wobegone.

I don't have enough room to argue or convince you on this, so go do some reading.
Learn about normal distribution. Read up on Pareto.
Study some motivation theory and see how you're killing your best performers by rewarding the others equally.
Until you get over the "every one's a winner mentality" (how about, "every one's a winner, but not everyone wins"?), you won't be a great performance manager.

3. Write (real) SMART goals
SMART goals are like sex. Everyone talks about it, but no one seems to be doing it enough.

Write SMART goals.
Make them unambiguous, challenging, and measurable.

4. Review results (at least) quarterly.
I'm shocked at the number of managers who have this discussion only once a year. And then are surprised that the employees are surprised!

Hold reviews against the performance objectives at least once a quarter. Agree on the results.
By the end of the year, the score is already decided (and agreed upon).
A performance review then becomes a coronation ceremony and an opportunity to discuss the upcoming year - not the past year.

If your SMART goals are tied to a strong feedback system, there's no reason why reviews cannot happen weekly.

If you're an employee, take control of this. Review your performance with your manager more frequently, and I can guarantee that you'll have better results and get better reviews.

5. Enjoy the process
Just a gentle reminder. This whole process is supposed to be motivating and rewarding.
If it isn't, why bother?

Treat it like fantasy football! If people can sit around getting excited about the statistics of football players they don't know, why can't we all get excited about the statistics of people we know and care about?

What are your tips for Performance Management?
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