How Annual Performance Reviews Sabotaged Our Culture

Oct 25, 2018 8:00 AM by Nicole Luisi

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In our complex world, it's the unintended consequences that hurt us—not the intended ones.

This was the clear and painful story when our organization still conducted annual performance reviews. Our reason for doing them seemed innocent enough: we wanted to help people get a clear review of how they're doing, what they can improve on, and what their future performance should look like. But it wasn't working. Here's why it failed us and what we decided to do instead. 

It's no surprise that great employees want a "pulse" check—how am I doing, what are people saying about my performance, and how can I improve. In fact, 65% of employees say they want more feedback. Good people are motivated by good feedback. It's similar to a good athlete. In any sport, the best players ask for feedback. But world-class athletes don't schedule a once year meeting to check-in with their coach. They don't play a full season and then sit in their coach’s office to go through every game, practice, and play. But we were doing just that.

Without meaning to, our team was obstructing open and honest communication.

We unintentionally taught people to hold their thoughts, questions, and concerns until that golden annual review time. This meant issues festered, conversations didn't happen, and things were forgotten by the time an annual review finally rolled around. But people want to know if they're doing the right stuff and if they're doing a good job. And they want to know it week in and week out—not once every 365 days. We soon realized that we believed in one thing but had a system that encouraged another. We believe in trust, transparency, and connection. But we were "asking" people to stay quiet, hold their concerns, and connect at a predetermined time. We believe in honoring our emotions and having courageous conversations. But employees were pushing their feelings down and avoiding hard conversations.

The unintended consequences were clear: we were sabotaging our culture.
Good people were making up false, harmful, and distracting stories in their head.

Without frequent chances to check-in, people were making assumptions based upon off-handed comments, looks in the hallway, and emails. People were growing more and more defensive as they had little context for conversations and helpful critique. Our team was guessing what others were thinking instead of asking people directly. So instead of having people list every single task they did for the last year (like an athlete asked to account for every play), we shifted our thinking. We started to dream of a way to align our feedback with our culture. We invited our people into a new "feedback exchange system"—not a one time or twice a year event. We rolled out a system that encouraged courageous conversations and clear exceptions.

Specifically, we created weekly times for people to meet with their manager to get feedback, discuss expectations, talk priorities. These brief meetings were framed by three questions:

  • Am I working on the right things?  
  • Am I meeting expectations?  
  • Where can I improve?

We also encouraged people to go directly to the person they had an issue or concern with. We empowered people to fix issues themselves and focus on healthy relationships—not the proper chain of command. Today, we’re grateful to have a system in place that encourages constant feedback and promotes courageous conversation. It’s not that annual performance reviews are inherently wrong or harmful—but they just aren’t us, our culture, or mission.

But our new system so clearly is.

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