When we try to imagine “a better performance review,” we’ve become overly fixated on the design of the process itself.
We endlessly debate amongst ourselves, “Which tool should we use? Should the questions be drop-down or radio buttons? How often should the cycles be? How many people should rate each other?”
We’ve forgotten what matters most: The core interaction between team members.
The interaction matters most
At the end of the day, the most important result of whatever performance reviews process you choose is that it helps your team work better together. As organizational theorist Edgar Schein defined, teamwork is the development and maintenance of helping relationships amongst all members of the group. Positive and helpful interaction is at the core of effective teamwork — and that’s what we as leaders care most about.
A helpful interaction is one where your team member is willing to tell you, to your face, objectively and kindly what could be better and how you can improve. It’s an exchange of feedback where the suggestion is received in a non-defensive way, where the person chooses for themselves the actions to take to change their behavior in the future.
Focus on the interaction — the connection, dialogue, and information and delivery of that information between peer to peer, manager to direct report, direct report to manager — and everything else about the performance review becomes dressing.
Because whether you have a performance review once every six months or once every six weeks, it still begets the need for your managers to have a conversation with their direct reports about what could be better — and interactions between team members that are positive and productive.
As a result, as leaders our focus should not be on answering, “What should our performance review process be?” but rather:
“What is required in the environment to increase the likelihood of helpful interactions?”
Here is the answer…
Our KYT methodology for a performance review alternative
To rethink performance reviews, here are 7 principles we recommend integrating…
Separate compensation conversations
Helpful interactions flounder if the primary context for interactions is: “Well, how does this affect how much I’ll get paid?” People can’t focus on how they should be getting better — or feel comfortable sharing with others how to get better — if they’re being evaluated for compensation changes at the same time. As a result, you’ll want to separate compensation from your process. This way, you have a set of conversations focused purely on growth and development — and you can optimize for increasing the quality of those interactions, rather than trying to do too many things at once.
Safety supports success
Trust is the breeding ground for helpful interactions. No one is going to want to give truthful feedback (especially if it’s upward) unless they trust it’ll be welcomed. This safe environment is what Amy Edmondson’s famed research deemed “psychological safety” – and what Google found their most high-performing teams have in common. Tactically, this means being vulnerable when asking for feedback, appreciating the feedback you’re receiving publicly, and employing what author Daniel Coyle calls “belonging cues”: Eye contact, verbal tone, and body language to create this sense of safe connection.
Invite, don’t impose
Only 26% of feedback is found to be valuable by employees — and a large determinant of this is because the feedback is imposed, rather than invited. Encourage your team members to ask for feedback, as there’s a higher likelihood that the feedback will be internalized.
Research supports that delays in feedback hurt performance and learning, especially around course-correction. The more you can give feedback closer to the moment it happened, the more likely it will positively change behavior. At the same time, it can be hard to carve out the time to give live feedback in the day-to-day rush of work — and it can also feel unnatural and stilted. As a result, creating high-frequency routines — a time and place to give and receive this feedback that is structured and well-supported — at minimum once a week is critical.
Multidirectional, not unilateral
The interaction cannot be an opportunity for growth and improvement if it is one-sided. As a result, feedback should not just be collected and aggregated by managers only and direct reports, but enabled peer-to-peer. A huge reason managers dread delivering performance reviews is that they have to triangulate feedback from one team member to another… and the manager gets caught in the middle. Instead, offer your team ways to provide peer-to-peer feedback, and equip everyone — not just your managers — with the tools and training to give and receive this feedback well.
For many teams, this is the biggest missing piece: Training that helps team members give actionable, objective feedback, and receive feedback in a productive way. As cited earlier, only 14.5% of managers strongly agree that they are effective at giving feedback. But it’s more than just watching a video course on feedback and calling it a day — it’s giving your team tactical scripts and templates they can use for giving and receiving feedback, and scenarios they can practice.
Active, shared self-reflection
To further improve performance, one of the most effective forms of practice comes from self-reflection. Studies have shown that when a person has the choice between self-reflection or practicing a task, if they choose to self-reflect, their performance will increase more than if they would’ve used that same amount of time to practice a task. As a result, to help your team continue to level-up and improve the quality of their interactions, you’ll want to incorporate some kind of regular shared self-reflection practice.
These are only guiding principles — not tactics or an immediate how-to.
If you’re ready to implement these principles tactically in your organization, read on in the next chapter…