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WORKSPAN DAILY |

R.I.P. Annual Review: It’s the Age of Ongoing Manager-Employee Goal Setting

Performance review procrastinators’ “just wait till we get back to normal” excuse is getting stale.

Instead, performance management is more important than ever with manager-employee communications needing to reflect and affect ever-changing expectations and metrics that are vital for business success, agree several human resource experts.

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The days of the rigid annual review with lofty, abstract goals for the coming year are gone. Today is the age of agility, when employees and managers regularly communicate to quickly adjust measurable goals to help ensure they are best meeting their employer’s needs in a dynamic marketplace.

“Those who have acknowledged that this is not a short-term experience are more easily able to pivot,” said Lori Holsinger, Ph.D., a senior principal at Mercer. “When setting goals, they realize there are things employees can’t control, that they are navigating something different.” 

Narrowing the Focus

That pivot should include organizations focusing on fewer priorities, said Asumi Ishibashi, Willis Towers Watson’s North America lead for talent management and organizational alignment. “Less is more,” she said. “Be really good at communicating and showing leadership with those priorities.”

More of those responsibilities are falling on managers’ shoulders. Performance reviews are becoming more informal, with more frequent checking-in conversations, she observed. “More managers are deciding their frequency and cadence.”

“We are seeing more of an enablement perspective – ‘Do you have the tools, support you need?’ – in addition to thinking about performance,” Toronto-based Ishibashi said. “More conversations are drifting toward holistic view on well-being.

“Managers need to help prioritize around goals with agile goal setting that is focused on impact rather than activity.”

COVID-19 is putting more responsibility on line managers who have a poor track record in communicating with employees. Holsinger cited 2019 Mercer research that showed eight out of 10 managers lack skills in feedback to employees, a percentage that has been fairly consistent through the years. Nearly half of employees surveyed by Gallup said they receive feedback from their manager a few times a year or less.

“The pandemic is giving managers an opportunity to restart with employees,” said Holsinger, who is based in Atlanta. “Employees are working in situations beyond their control. It’s an opportunity for managers to show empathy. Employees are saying ‘Take time to get to know me.’ They want opportunities to grow and contribute.”

Management training involves both upskilling current managers and promoting the right talent to be managers. “A lot of the training before has been technical in nature,” she said. “Now it’s about manager resiliency, how to navigate the organization and self-assessment — how to let them prioritize their skills.”

Effective managerial efforts should immediately be recognized and rewarded, she added.

Some organizations have circumvented performance reviews altogether. For example, Facebook gave all 45,000 employees the same “exceeds expectations” performance review rating for the first two quarters of 2020.

Separate Pay, Performance

“It is important for organizations to recognize that performance ratings have impact,” Holsinger said. “They need to reflect goals and performance.” Ratings that aren’t rooted in reality can cause problems down the line, including possible litigation, she added.

Mercer advises separate discussion about pay decisions and individual performance. “Don’t trigger pay back to performance,” Holsinger said. “It can create confusion over the perception of performance.”

The worst strategy is to avoid performance reviews and pay conversations, wrote Ben Wigert, Gallup's director of workplace management research and strategy. “Gallup has found that when people have conversations with their manager about progress and pay, they are more engaged and feel better about the pay they received — even if they don’t get a pay increase. Now is the time to honor everyone’s contributions and challenges and talk about how we’re going to move forward together.

“The only viable management style going forward will be ongoing coaching conversations that establish a rhythm of collaboration and create shared accountability for performance and development.”

Be Prepared

The pandemic has not only affected performance review content and context, but its delivery. Virtual reviews should follow the same criteria as traditional in-person conversations, Ishibashi and Holsinger concur.

“Preparation is still key and it shows,” Ishibashi said. “Managers need to take time to prepare data, information, history and talking points.”

Be mindful that we all have a lot going on. “Ask the employee when would be the right time for a meeting and their preference (of communication method, such as Zoom),” she said. “Make sure the conversation is interactive.”

Some may be leery of delivering the “hard message” review virtually. “But nothing really changes,” Ishibashi said. “Be honest, transparent and back it up with rationale and data. Always create a follow-up plan.”

Performance reviews should “keep true to purpose of organization,” Ishibashi said. “Refine the things that work well and evolve your processes with business needs or you will continue to struggle.”

There are more similarities in delivering virtual vs. in-person reviews than differences, Holsinger said. “It comes down to preparation throughout the year. You should already be communicating with employees, having conversations to understand the employee’s contributions.”

Acknowledge that interpersonal communication is different. “Interactions over Zoom can fall flat — animation and body language can be different,” she said.

“It is so important to be authentic,” Holsinger said. “That authenticity from managers comes across and will help the manager achieve that connection with the employee.”

The pandemic can be a “silver lining” in employer-employee relations, she added. “The acknowledgement of the situation — that we’re all in this together — may allow the company to have a connection point with employees that it didn’t have before.”

About the Author

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Jim Fickess writes and edits for WorldatWork.


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