Annual Reviews - Final Thoughts

In talking with several people around the office about the low value of giving ratings during performance reviews, I realized there was yet another reasons they suck. Aside from the previous stated reasons of setting false expectations, they also focus employees self-improvement efforts into the wrong areas.

I think that a good leader encourages the most productivity from a team by planning and guiding work around each individual's strength. If you assign the quiet introspective super coder in the corner the job of external team communications, you are setting him/her, the team, and the project up for failure.

What does this have to do with ratings? Glad you asked. If you give a person any rating less than the highest, he/she will usually focus their efforts on improving the areas where they were the weakest. The mental calculus is simple - (Rating of GREAT + Rating of IMPROVE)/Overall Average Rating = Rating of GOOD. So they want to change the IMPROVE so that the resulting equation evaluates to GREAT.

But this doesn't help the individual, the team or the project. If they area needed to improve is drastic, then yes changes need to be made. But if the super coder starts spending his/her time trying to take on the persona of social hub rather than cranking out awesome code, then the manager has failed to get the most out of the team.

Responsibility

Who is responsible for the career development of employees? First and foremost of course, is the employees themselves. They know better than any manager their own goals, aspirations, motivations, and the hundreds of small details that factor into career decisions. They should be willing to communicate with their boss (who must be approachable, especially concerning topics this personal) about where they are, where they are going, and when and how they think they should be getting there.

However, it is also vitally important for a manager to be looking out for his team. For me, it is one of the most rewarding, and most profound, responsibilities, to have that much influence over someone's career and livelihood. It borders on managerial negligence to abdicate the responsibility of career development solely to the employee. A good manager will know what motivates individual team members, have a good general idea of the individuals personnel status (ready for promotion/raise/added responsibility) as well that individual's ability to handle any of the above.

Finally, a company's Human Resources/Personnel/Talent section should also be involved in ensuring that managers have all the information that they need to make informed and timely decisions. They should act as a safety net, double checking that managers have past performance reviews, pay data, market data, title and job descriptions for all employees as well as the title and job description for the next promotion level of all their employees. It does not matter that no one may be ready for a promotion or a raise, the managers need that information to do their job correctly, completely, and competently. Yes, it can be quite the workload to get and distribute all the necessary information, however it is well worth the effort. It is one of the main reasons a Talent organization exists within a company. A good manager and good Personnel personnel will work together towards ensuring no one slips through the organizational cracks.

Performance Reviews – part II.

Doing performance reviews are expensive, in both time and opportunity cost. So if you are going to do them, remember that the most important factor in designing a performance review system is to understand the objective you are trying to accomplish. If it is to rank employees 1 to n, then you will need some form of rating system. But that is a crappy goal, and I wonder why companies feel it necessary to do so. It doesn't improve the product, and doesn't make developers more efficient or more productive.

If the objective is to drive specific behaviors that is simple enough to do. Ratings based on easily measured objectives (uch as focusing on bug fixing) will ensure that those metrics are met, most of the time regardless of the cost/benefit to the organization. And if the annual reviews set up competing metrics (QA rated on how many bugs, developers rated on how few bugs) then progress will grind to a halt as teamwork goes right out the window in this zero-sum game.

If the objective is to help people grow in their careers (and this *should* be the objective), then the reviews should not be annual, but much more frequent, quarterly at a minimum. Annual reviews tend to focus more heavily on the most recent quarter, as that is what is freshest in the minds of both the manager and the developer. If you are going to have quarterly reviews then they have to be lightweight. Don't use ratings, but rather focus the review on strengths and weakness, and how those fit into the company's strategic plan, and the developer's personal career plan. Make sure the developer is aware how they are progressing, and knows on which areas to concentrate. Using SMART objectives can be effective here, but they have to be focused enough to be of value. Long term macro objectives (n dollars in gross sales) are not effective at the team level. Individual level Objectives that are SMART and Annual and relevant are a myth. Quarterly objectives are short enough time frame to allow for adjustment to market/company directions without causing the developer to rebel (I am not meeting the annual objective, therefore my bonus is in peril, and I won't be able to afford that family vacation I have been promising the spouse).

Finally, be consistent in the review data. Do not have a quarterly review for results mixed with an annual peer review, mixed with a semi-annual daily behaviors review. Consistency will help drive the message (whatever that message you want to deliver as a manager) more effectively. Have the same information available for each review. If you want to do peer reviews as part of the process, then have them at every review. If the data are not important enough to review quarterly, the do not include that data.