Twice in the past week, I heard stories about companies who failed themselves and their employees through flawed review processes. The cases were different situations inside different organizations, but the constructs were very similar. In each case, longstanding employees had played meaningful roles inside their respective organizations for several years. Each and every year, their performance reviews had been generally upbeat, encouraging and positive. In one case, the employee’s most recent review was so encouraging that the CEO told this person ‘I want you to work here with me forever'. In each case, the terminations were abrupt and took the individuals by surprise. And in both cases, it’s clear that performance was part of the reason, but that honest assessments weren't given.
Annual or semi-annual reviews are an incredibly valuable tool for both companies and employees. They represent a straightforward way to assess both individual and team performance and make adjustments where necessary at regular intervals. They’re also critical to establishing an open and honest workplace environment where feedback is encouraged / welcomed and employees feel nurtured and supported. But they’re only effective when they’re done authentically with intention. As humans, many of us have a natural tendency to avoid conflict. In performance review processes, this can manifest itself in reviews that either: (a) lack honestly, (b) gloss over areas that need improvement or (c) amount to little more than checking the HR department boxes while delivering minimal value to the employees and organizations around them.
Organizations consist of people (at least until AI takes over) who are fallible and generally interested in learning, personal growth and self-improvement. When you gather 50-100 of these people and form a company, a huge part of the challenge in achieving excellence centers around keeping everyone motivated and moving forward at a similar pace. Inauthentic reviews that lack honest appraisals of an individual’s performance do a grave disservice to that individual because they don’t provide real actionable areas for improvement. This strikes me as lazy of behalf of the organization because we can all improve. To the broader organization, it has the potential to be hugely debilitating. To reference the above examples, these individuals had grown within the organizations, in one case attaining a senior management title. If performance was lagging, you better believe others inside the organization recognized it. It not only does a disservice to the individual by preventing them from growth, but hurts the broader organization because other employees begin to question the system of meritocracy and, when that happens, morale suffers. It can also lead to legal and financial risk for a company when someone is terminated who had received consistently positive reviews.
The moral of the story is that it’s important to create an open, supportive and nurturing workplace where feedback is expected and can be received without feeling threatened. In cases where there’s a low performer on the team, it’s better for all parties involved to try and improve or part ways - this helps the organization upgrade performance and helps the individual find a role that’s better suited to their gifts. If you’re going to invest in reviews, do them honestly.