Author: Fabiola Eyholzer
Employee appraisals are undoubtedly the most scrutinized (and possibly least effective) HR tool. Lean | Agile Enterprises eliminate annual reviews and push the reset button on traditional Performance Management by shifting to an Iterative Performance Flow. Thereby (re-)optimizing the system for optimal cadence, alignment, responsiveness, and growth while decoupling it from other HR instruments.
Performance Management is the most criticized HR process today. Initially installed to align goals and foster joint efforts, it has since become the pivotal point for HR practices like Compensation and Talent Management.
Despite a long list of complaints, organizations continue to invest top dollars into a broken practice. However, the tides are shifting, and organizations of all shapes and sizes are already eliminating employee appraisals
Here is how Lean | Agile Enterprises move to an Iterative Performance Flow:
- Align performance cycle with iterations: The accelerated pace of today’s business world makes it increasingly difficult to think in multi-year periods and set rigid top down annual goals. Agile runs on an iterative, interactive process with iterations representing the new performance cycles.
- Utilize plannings to share vision, set inspiring goals, and clarify expectations: Being able to inspire people is imperative. When Agile teams plan, they come together to understand the business context and vision, set and synchronize goals, clarify expectations and dependencies, and commit to the objectives for the next iteration. This replaces static individual goals with verifiable collaborative objectives.
- Continuously inspect and adapt: Agile in general, and ceremonies like Reviews and Retrospectives in particular, are all about inspecting and adapting. The focus is, hence, no longer on assessing individual goals, but on continuous improvement – not only on a personal, but also on an enterprise level (a part neglected in traditional performance appraisals).
- Eliminate annual performance ratings in favor of continuous feedback: Instead of employee ratings, Agile organizations shape a culture of mutual respect where candid dialogues and continuous feedback consistently take place between leaders, employees, and peers. This focus on relentless improvement is a key part in embracing agility and achieving its full impact. It also fundamentally increases the intensity and quality of discussions on personal accomplishments and growth potentials.
- Embed learning and development into the workflow: Companies must constantly evolve and Agile ways of working are all about learning. It gives people the time and space to improve at their pace by utilizing innovation iterations and stories like FedEx Days, Hackathons, Wicked Wednesdays etc. This truly embraces the essence of knowledge workers, but also respects the responsibility of the enterprise to create a workflow that allows for active learning and growth.
These new ways of working fulfill the original goals of performance evaluation far better than any annual appraisals. By bringing a Lean | Agile mindset to all HR practices, People Operations continuously engages, interacts, grows, and recognizes talent – without the need for an employee appraisal to act as a trigger. Making annual ratings and forced rankings obsolete.
The Iterative Performance Flow is all about optimal cadence, alignment, responsiveness, and growth – not about monetary incentives.
This article is part of the series “Aligning key Themes in Human Resources to Lean | Agile Values & Principles”
This post was contributed by Fabiola Eyholzer, CEO of Just Leading Solutions, LLC. More information about Fabiola, Agile HR and the services of Just Leading Solutions can be found at www.justleadingsolutions.com.