How Can ‘Good Conversations’ Replace Traditional Performance Reviews?
Ranked in the global top 10 of the most desirable companies to work for, Netflix is an employer that clearly gives a great deal back to its employees in terms of salary, culture and development opportunities. But it also expects a lot in return and is well known for its unusual performance assessment method, the so-called ‘Keeper Test’.
Instead of having traditional appraisals and annual reviews, Netflix has introduced a permanent evaluation process. Managers and team leaders are encouraged to ask themselves a simple question of colleagues: “If an employee told me he or she had found another job, would I do my best to keep him or her at Netflix?”. If the answer is “no”, the employee in question may be reviewed and eased out of the organisation.
That might be an extreme approach, but they are not alone. An ever-growing number of leading companies, especially those in the technology sectors, are moving away from traditional top-down performance reviews and taking a continuous approach instead. Rather than highlighting room for improvement, often when it’s too late, their aim is to emphasise the positive, offering personal development and opportunities for growth.
One simple way companies can enable a continuous feedback approach is to introduce the concept of “good talks”. These are regular – but not necessarily informal – conversations, intended to engage, motivate, inspire and improve employee productivity. They replace the need for expensive formal assessment interviews conducted twice a year and mean that any issues can be addressed more quickly before they become serious problems. This is an important factor. More people leave their employer because of a poor relationship with the line manager and a dearth of development opportunities than for any other reason, including salary. Millennials, in particular, find that a non-hierarchical working relationship, with opportunities for continuous feedback, is very important, according to research conducted by Careerwise.
More people leave their employer because of a poor relationship with the line manager and a dearth of development opportunities than for any other reason, including salary.
5 key ingredients for ‘good talks’
Before the good conversations approach can be introduced, there needs to be equality in the relationship between a manager and their team members and an open company culture. There needs to be a feeling that people can speak openly and be listened to, without facing negative consequences.
Being well prepared
To be able to give your employees continuous feedback, it’s important to have a clear end goal and ask relevant questions. You also need to understand what motivates the person involved. Is it money, flexibility, autonomy, status or social interaction for instance? And offer them appropriate development opportunities. Preparation should also include spending time observing their behaviour before any conversations start. This way you can go into depth during your talks and offer opportunities that will motivate them to achieve the best for themselves.
Introduce measurable changes
To ensure that routine conversations can become viable replacements for an annual review, implement the following measurable changes.
- Increase the number of talks held per year. This can vary from once a month to having one every three months. It’s up to the manager and employee to agree the most worthwhile frequency to suit their goals.
- Hand over ownership of these conversations to employees and make them more involved. Let them take the lead when preparing and handling mutual conversations and give them the opportunity to influence the right outcomes.
Ask the right questions
When preparing for good conversations, managers can consider the following questions as a starting point for a useful discussion.
What do changes in market/technology/society/politics require of my team, now and in the long term?
What influence do internal developments have on the expertise and skills of my team within the next three years?
How do I see the future of my team?
What are the three most important goals for my team in the coming years?
Which competences and skills are already available for this and which are not?
How do I facilitate and stimulate a culture where learning and development are common?
To what extent am I an example when it comes to (career) development?
Who or what do I need to keep my team up to date?
The best companies are moving away from formal review meetings held once or twice a year and introducing continuous feedback loops instead.
Encourage employees to ask questions like these:
What developments do I see in my field and in the environment in the coming years?
Do I expect my position to change in the future?
How do I view this expected change?
Are other requirements set for me to continue to function well in the future?
What questions do I have about this with my supervisor?
What changes in the personal sphere do I experience and what does this mean for my development?
What do I need to keep functioning well and to keep work that suits me?
The best companies are moving away from formal review meetings held once or twice a year and introducing continuous feedback loops instead. Rather than let poor performance and dissatisfaction or insecurity set in, informal discussions highlight any issues quickly, employees gain more insight into how current performance impacts strategic goals and have the chance to adjust as necessary.
Employees who receive regular feedback on their performance in an informal way enjoy their work more. When people feel listened to and have a say in work processes, their motivation gets a boost and this is always good for business.