Brent Daily, co-founder and chief operating officer of RoundPegg, a hiring startup that provides social apps, hasn’t nixed his company’s performance reviews. Instead, he has made a conscious effort to make them more meaningful.
“It’s a shame we’ve gotten so cynical,” he said. “Performance reviews have become more of a cover-your-ass technique than a device that actually helps employees do their job better.”
At RoundPegg, all employees have quarterly reviews, which Daily calls feedback sessions.
Natalie Baumgartner, the company’s co-founder, doubles as the organization’s chief psychologist. She meets one-on-one with every employee for as long as the employee wishes, with only three questions on her agenda: What’s been working well? What hasn’t been working well? How do we fix that?
There are no forms or documentation; all meetings are confidential. Daily said when the company first implemented this in 2010, sessions took more than an hour and a half. Now all are down to less than 20 minutes.
“Our job is to make sure our employees are being successful, and if they’re not, we’re doing something wrong,” Daily said. “My job here isn’t just to make sure everyone is crossing their T’s and dotting their I’s — my job is to remove the obstacles and allow them to do what they do best.”
“We need to reinvent for the future, but we don’t want to throw away what works,” said Daniel Debow, senior vice president at Work.com, which is owned by Salesforce. “The annual review becomes better and more valuable when employees receive consistent feedback, motivation and coaching — it becomes a productive conversation as opposed to a time to discuss outdated, static feedback that may not be relevant.”
At Aubrey Daniels’ consulting firm, employees meet with their supervisor at the beginning of every pay period. The supervisor goes over what needs to done next month and how it’s going to be scored. From there, supervisor and subordinate create a plan that employees can track themselves against. The plan and goals often change each pay period. At the end of the month, the supervisor and employee regroup to evaluate results.
“We have a profit-sharing plan,” Daniels said. “If you’ve done well that month, you participate in the profit based on your score. If you get a low score, you don’t get anything at all. Everyone in the company knows that, and everyone has the opportunity to benefit from it.”
Daniels said such collaboration and openness is important. The primary purpose of performance reviews should be to enlighten subordinates about what they’re doing right and what they can do better or differently.
Caliper’s Sweeney agreed, saying the ongoing nature of performance conversations — as opposed to the one-time, formal check-the-box approach — is a more productive use of company time and beneficial to the relationship and performance for manager and employee.
“Some of these conversations are tough, but being able to have them in a way that is constructive, open and honest can change the possibilities for individuals who want to grow and change the possibilities for the organization,” Sweeney said.