Businesses have witnessed a complete revolution in the past 50 years. The impact of computers and the internet have transformed everything from communication to the definition of an office, but some business practices resist change.


Mad Men, the AMC period drama following the workings of a 1960’s ad agency, gives us a glimpse as to just how far we’ve come — and how many things in business have stayed the same.

Mad Men
[Source] Don’t run your performance reviews like they’re straight out of Mad Men.
We may have given up smoking at our desks and all-male staffs, but there’s still a lot of homogeneity that lingers today. Like-minded entrepreneurs built teams where members tended to be more like each other than not in terms of gender, age, experience, and even personality.
And performance reviews, which officially emerged during the Mad Men era, were forged in this kind of atmosphere. They sought to enforce the sameness reflected in the workplace without acknowledging how varied perspectives help build stronger businesses.
Fast forward a few decades, and even though today’s companies are a lot more diverse, performance reviews have stayed mostly the same. Too many are still using a one-size-fits-all approach for giving employee feedback.
Here’s the thing: these legacy review processes aren’t benefiting businesses. In fact, studies show that 66% of team members feel that old-school methods of conducting performance reviews actually interferes with their productivity.
If the purpose of reviews is to help team members flourish, the review process has to match their needs.

An Individualized Approach to Reviews Makes Teams Better

“Your employees are your company’s real competitive advantage. They’re the ones making the magic happen – so long as their needs are being met.”
Richard Branson
The key to building stronger companies today is treating team members like individuals. Studies have shown that when people feel like their specific needs are met, they’re more likely to be engaged and do their best work.
Pharmaceutical giant Eli Lilly is one of many companies leading the pack with an individualized approach to performance reviews.
In 2012, Eli Lilly took a step back to analyze their performance review process due to multiple requests from team members.

An Individualized Approach to Reviews Makes Teams Better
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For annual reviews, managers had to remember and enter an entire year’s worth of work for each team member. This meant, of course, that managers with large teams had far more paperwork to complete the review process, which made them dread it.
In addition, all managers, no matter what kind of team they managed, used the same “process, criteria and standards” to assess team members. This created very rigid evaluation benchmarks which didn’t take the individual needs of team members into consideration and didn’t offer advice for improvement.
One of the tools Eli Lilly created to understand where they could improve their reviews was a monthly survey. Eli Lilly developed an engagement index to track team member engagement throughout the year. What Eli Lilly found was that after people got their performance rating, there was a major drop in engagement for 85% of the company.
An Individualized Approach to Reviews Makes Teams Better
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As they tracked the data from the monthly reviews, they discovered that a portion of the 85% recovered engagement levels after about three months. However, some team members with lower engagement never re-engaged at the same level again.
You’d expect a drop in engagement as the result of negative reviews, but Eli Lilly was surprised to find those team members who received favourable reviews had no improvement in engagement.
Eli Lilly used the feedback they gathered to reduce wasted time and energy in the review process and make changes that put more emphasis on individual team member needs. The result of the changes show that:

  • Consistent feedback has simplified the review process and put emphasis on relevant individual priorities.
  • The emphasis on coaching means manager and team members are having real, open conversations.
  • Managers don’t feel as though they have to tread lightly around issues, so they can be direct about them.
  • There’s less time spent on activities that don’t add value to reviews.
  • There’s more emphasis on helping team members reach their goals and grow.

Other large companies like Google and GE have also made changes to their review process because they’ve experienced the positive impact of customizing their performance reviews.
In order to create better performance review practices, you have to understand employee needs first. Here’s what you can do to get honest, accurate input from your teams that will improve your review process.

How to Understand what Your Team Needs

Discovering the best ways to deliver feedback takes some time. You’ll need to explore issues like where your team members see the system failing or how’s working well. You can’t just take an educated guess or rely on the word of a few vocal team members.
One process you can use to eliminate guesswork and collect more accurate information is  the LASR system–listen, analyze, share, and roll out:

  • Listen to what teams tell you.
  • Analyze the data.
  • Share your findings with upper management.
  • Roll out the new process.

Let’s take a closer look at how you can put these principles to work.

Listen to what teams tell you

Team members are always talking, but the problem is that managers don’t always hear what’s being said. That’s why you have to be proactive — and a little creative — to find out information. Sometimes feedback from teams will be loud and obvious, and other times it’ll be more subtle.
To give everyone a constructive format for their suggestions or concerns, send a survey asking questions like:

  • What do you like about the current review process?
  • What don’t you like about the current process?
  • How would you prefer to receive feedback?
  • Who would you like to get feedback from?
  • How often would you like to get feedback?

Make sure you provide everyone with an outline of the current process and then use a tool like Airtable to capture and track responses:
How to Understand what Your Team Needs
The answers to these questions will give you insight into where the review process breaks down and fails to give individuals value.
When you read the answers to the survey, take them seriously, even if the statements are surprising or make management uncomfortable at first. Most employees want to show up and do great work each day, and the best way to help them stay engaged is to act on their responses.

Analyze the data

Look for trends in your survey data to see where you can make changes that will have the greatest impact.
To make the answers more manageable, take the data and make a list of all the issues,  then group the issues into larger buckets. This will help you stagger your modifications and prioritize the ones that impact teams the most. Here’s one example of how to organize a long list of suggestions and grievances :
Performance
 
After these categories are made, go back and see which answers appeared most often and mitigate those first. If the data shows that 80% of people don’t like the ranking system used, focus on fixing this before you look at other less pressing issues, like the platform used to enter feedback.

Share your findings

Once you have a solid idea of what’s wrong with the process and how a new approach will benefit individual team members, present your findings to HR and the CEO. It’s important to have their buy-in for your recommendations to move forward.
Keep in mind that roll-out plans are different for every company. A small startup will be able to implement a new plan in a month, while a Fortune 500 company will take several months. Clearly, map out what steps will be taken and how much time you’ll need to roll out a new plan.

Launch the New Review Process

As you put the new review process into action, here are a few tips that will help everyone make the transition smoothly.

Meet with team members in person

In order to get everyone in your company on the same (new) page with performance reviews, hold an all-hands meeting. This will ensure that everyone has the same information at the same time, and it gives team members a chance to ask questions and comment. Track these comments because they’ll help keep the new process stays within team member objectives.
Also, because your new process will be designed to speak to the needs of individual team members, teams should also have their own follow-up meetings to discuss the changes. Managers can follow up even further with informal 1-on-1s to work out each person’s preferences for receiving feedback.

Establish a tracking system

Depending on your findings, you’ll need to have some kind of tracking system to manage the process. For example, you’ll make the next review much easier if you know what was discussed during the previous review and what action plan you agreed on. With this in hand, both you and the employee and evaluate their progress every day — not just every month or year.

Offer feedback in a timely manner

If your focus is to help employees grow, how will they stay focused if they only get real insights from you once or twice a year?
Instead of waiting for an annual review cycle to take action or make suggestions, deal with issues as they come up. Using this approach, Adobe saw a 50% increase in “involuntary departures,” which means that turnover dropped dramatically. For Adobe, this reduction allowed them to offer more support and morale that rebuilt teams, improved morale, and increased retention.
Frequent reviews that cater to different needs might seem like a lot to juggle, but it actually saved them time and money. Instead of spending hours writing reviews for an entire team that covered a year, frequent reviews were quicker and more focused — and they weren’t as emotionally draining.

Set a simple agenda

Part of the anxiety around performance reviews stems from the unknown: employees don’t know what managers are going to say, and managers don’t know how employees are going to respond.
To take the uncertainty out of performance reviews for everyone, Box, a company that created a file sharing tool by the same name, created a rubric with seven core values. They used these as talking points to guide the conversation and make the experience less stressful.
Here’s a sample of the rubric used for engineers at Box:

  • Technical skills – Determines what level an engineer’s skills are and what kind of guidance is needed
  • Design – Looks at how much effort engineers put into design ideas or if they only focus on the task at hand
  • Code quality – Evaluates whether coding is better — or worse — after an engineer works on it
  • Impact – Highlights how well an engineer can work on their own and how they contribute to larger teams
  • Scope – Looks at which teams each engineer works with
  • Drive for improvement – Explores whether engineers take steps to learn more and grow
  • Culture – Assesses whether an engineer is a good fit for the company culture

This system gives managers far more flexibility than a number-based system, because they can create a few different versions that are tied to each person’s role, whether that is with the sales team or customer success.

Set the stage for growth

While we all get nostalgic for the clothing and drama of the Mad Men days, your company doesn’t have to be stuck there when it comes to performance reviews. The world has changed dramatically, which means that you and your team members have many options when it comes to collecting and providing feedback that will make your company thrive.
The best way to break the pattern of unproductive, time-consuming legacy of performance reviews is to create a system that identifies and honours your employees’ needs. Once you know how and when they prefer to get feedback on their achievements, you can establish an updated process that that supports them and strengthens your entire company.