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Rethinking performance reviews : An inclusive approach

It’s that time of year where, depending on your company, managers are spending days or weeks compiling performance reviews and engaging in calibration sessions or a cabal of leaders are making sweeping decisions in secret about everyone’s future. Both options can hurt inclusivity, something research has been telling us for the last decade impacts the bottom line. For many reasons, including better business performance, inclusivity should permeate every aspect of leadership, including the active dismantling of the barriers preventing the participation and advancement of every individual.

Performance reviews are a critical part of career advancement, but many of the norms around performance reviews include outdated and well-meaning, but ineffective or harmful practices. To see where there's room for improvement, let’s delve into some of the controversial aspects of performance reviews and, relatedly, calibration sessions.

An image of calibration instruments with the text "Calibration sessions, touted as a tool for fairness and objectivity, often turn into a breeding ground for bias"

The Dismal Performance of Annual Performance Reviews

Let's face it, the annual performance review rarely meets expectations. If you’re only holding once-a-year conversations, you’re not nurturing employee growth and development, you’re hindering it and creating unnecessary anxiety. Some of the downsides also include:

1. Stagnancy and Delayed Feedback:

Annual performance reviews suffer from a fundamental flaw in that they occur too infrequently. A yearly cadence leaves employees in the dark for extended periods, hindering their ability to make real-time adjustments. Issues that could have been addressed promptly are allowed to fester, leading to suboptimal performance and potentially avoidable challenges. Stagnant feedback not only stunts personal growth but also contributes to a culture of complacency.

2. Bias and Subjectivity:

Annual performance reviews are susceptible to bias, both conscious and unconscious, including recency bias, hindsight bias, in-group bias, availability bias, confirmation bias, halo effect (the list goes on) when evaluating performance retroactively over a whole year. This subjectivity undermines the fairness and accuracy of the assessment process, creating anxiety and eroding trust. 

3. Disconnect from Organizational Objectives:

In a rapidly evolving business landscape, organizations must adapt swiftly. Annual reviews are often disconnected from the real-time needs and goals of the organization. This misalignment hampers the agility required for success in today's competitive environment. They also tend to be retrospective, focusing on past performance rather than future potential. This backward-looking approach does little to inspire and guide employees, and thus organizations, toward future success.

⭐ Best Practice: Embrace Continuous Feedback Loops

The best leaders understand that performance is an ongoing dialogue, not an annual or bi-annual monologue, and they foster a culture of continuous improvement that empowers employees to take charge of their own growth. This happens by embracing regular feedback, ongoing communication, and outcome-oriented evaluations. 

As part of a relationship built on trust and respect, feedback can be provided thoughtfully, intentionally, and liberally. This becomes a daily practice that no longer feels like “ok, I better sit down, I’m about to get feedback” and instead includes celebrations, reflections, and idea generating conversations around areas to improve, individually, across teams, and organizationally. To knit together what often feels like disconnected parts, align those feedback loops with regular goal check-ins to help make sure that skill and behavioral improvements are focused on relevant business specific outcomes (short and long term). Now you’ve got a continuous documented cycle of aligned goals, outcomes, performance, and feedback! 

Calibration Sessions: The GroupThink Wolf in Sheep’s Clothing

Calibration sessions, touted as a tool for fairness and objectivity, often turn into a breeding ground for bias and inconsistency, even amongst managers who have completed bias training. The secretive nature of calibration sessions can have a detrimental impact on employee morale. The perception of decisions being made behind closed doors without transparency breeds distrust and can lead to disengagement. Employees may question the fairness of the process, affecting their commitment to the organization. This is especially true when, instead of focusing on an individual's performance, these sessions devolve into a game of numbers, sidelining the nuanced understanding of an employee's journey. Other downsides include:

1. Bias Amplification:

Calibration sessions, intended to ensure fairness, often exacerbate bias. Group discussions may inadvertently amplify pre-existing biases such as anchoring, bandwagon effect, Dunning-Kruger effect, false consensus effect, fundamental attribution, belief bias and more. This leads to decisions based on perceptions rather than objective assessments and runs the risk of perpetuating systemic inequalities.

2. Lack of Individual Context:

Because calibration sessions often cross team boundaries, there is a risk of many calibration participants having little to no context for the specifics of someone’s domain, role, expectations, and skills, let alone their individual impact and experience. There is a tendency to focus on comparing employees rather than understanding their unique contributions and challenges. This lack of individual context undermines the purpose of performance reviews, as decisions are made without a comprehensive understanding of each employee's journey and can lead to under- or over-estimations of performance and potential, overlooking the diverse skills, strengths, and aspirations of individuals. 

3. Misinterpreted Signals:

Calibration sessions often sideline or misinterpret crucial behavioral skills that contribute to an individual's success like collaboration, adaptability, and leadership. These skills can be challenging to quantify and often lead to subjective assessments or bypassing them completely and instead focusing on numerical rankings and ratings. 

⭐ Best Practice: Transparent and Collective Calibration on Measurable org or Company-wide Expectations

Rather than calibrating each employees’ performance and promotion readiness, hold sessions regularly to quantify and calibrate the company expectations for core competencies. Engage in open and transparent discussions about performance standards in each competency and the collective goals that define impact. Discuss what not good enough, good, and excellent look like and why, then document that using detailed anonymized examples. Embrace the idea that employees can have different shapes which can be defined using scales of depth, breadth, technical skills, behavioral skills, experience, etc and explain those using a variety of personas to help people recognize that meeting expectations doesn't have to take the same shape in everyone. This will help contribute to a more diverse and fair environment. Make these sessions an opportunity for shared learning, inviting both managers and individuals to contribute, and help bridge the gap for leaders and teams to grow together. 

Call to Action

Transformation is catalyzed in the discomfort of change. It's time to break free from familiar old ideas of conventionality and reimagine our approach to performance reviews and calibration sessions. We have the power and the responsibility to shape a future where every individual is empowered to thrive. The journey may not be easy, but the destination is worth every step.

💬 Share your thoughts and questions below to continue the conversation. Are you ready to lead the charge? If you'd like help along your journey, reach out today and set up a free coaching consultation.

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