Looking Ahead: Move From Annual Performance Reviews To Real-Time Coaching Conversations

By: Yael Shafrir, Chief Marketing Officer, Meet in Place

This article was also published on Training Industry

Every year, the same event plays out across thousands of offices across the country: the annual performance review. In fact, the Annual Performance Review deserves capitalization, such is its robust status and fixed nature in the annual cycle of corporate life.

Here’s the catch: there’s some new thinking on the subject. There are those who suggest that the system of Annual Performance Reviews is broken and that we’ve got it all wrong. That intentions are good but the end results are nothing short of disappointing.

Being someone who values data-backed conclusions, I’d like to explore this further.

A forum of nearly 20 senior Human Resources professionals and Organizational Consultants convened at an event held in conjunction with the Globes newspaper; Meet in Place – a global network of meeting rooms for offsites, business meetings, conferences and exclusive meet-ups; and Stoke, a platform for managing on-demand talent. They addressed these questions and unpacked the changes that are occuring in the labor market and the challenges they pose to HR managers.

The Annual Performance Review Could Be Counter-Productive

On the surface, it seems like a great idea to conduct a fixed annual review. This process, however, is plagued by inefficiencies at best, and fatal flaws at worst.

So much so, that statistics show 95% of employees are dissatisfied with their company’s appraisal process and 90% don’t believe the process provides accurate information. After all, it’s a retrospective review that often lacks nuance and insight.

Reviews need to be more about the employee than the company itself (Image: Meet in Place Tel Aviv)

Traditionally, the Annual Performance review was conducted only or at least primarily with the company’s best interests in mind. How had employees contributed? What was their performance like throughout the year? This type of thinking, left over from the Industrial Revolution, is out of place in modern organizational discourse.

Organizations today are realizing that the Annual Performance Review – and more importantly, reviews in general – need to be more about the employee too. In the ongoing war for talent, the data shows that it’s not money that potential hires and current superstars value most – rather it’s factors like culture and values, the quality of senior leadership and growth opportunities at a company.

Enter Real-Time Coaching Conversations

To remedy this, a solution is required that takes employee needs into account, as well as achieving the desired goals of the organization itself. This solution also needs to factor in the agile, disruptive and rapidly changing business environment.

Clearly, waiting for an Annual Performance Review is ineffective for all stakeholders. The corollary is that giving and receiving feedback without waiting –  in a way that builds on employee confidence and speaks to their needs – is an effective way to achieve the desired outcome for managers and leaders, the employee, and the organization. This is what real-time coaching conversations can accomplish.

Managers are becoming coaches, and are being empowered to release the energy, passion and ability within their teams. This can be attained through constant real-time coaching. Organizations need to set up the culture and structures to support this sea change.

Recent findings, including in-depth research published in the Harvard Business Review, support this view.

“The role of the manager, in short, is becoming that of a coach” (Image: Meet in Place)

A great example cited is Microsoft. When CEO Satya Nadella joined the company in 2014, he inherited a stagnant business full of risk aversion and slow to adapt to a faster-paced digital world.

Microsoft had an internal corporate rhythm dictated by quarterly and annual business reviews. This process had far-reaching negative effects, including an atmosphere of fear for employees who would often spend months preparing for the review. Under Nadella and his team, these reviews were nixed in favor of a coaching-oriented approach.

Nadella encouraged a growth mindset. Starting with himself, he began soliciting real-time feedback and fostered “leadership as conversation”. These changes have been instrumental in Microsoft’s revival.

The right environment – critical for real-time coaching (Image: Meet in Place Midtown)

The Critical Move From Annual Performance Reviews To Real-time Coaching

When it comes to improvement, having a coach or mentor can make a huge difference,  whether this is in sports, one’s personal life, or in business. Atul Gawande, a surgeon and prolific writer and speaker, talks about coaching in a TED talk entitled “Want to get great at something? Get a coach.” He shows how greats like violinist Itzhak Perlman used a coach to drive their improvement.

Gawande notes that coaching can improve performance across almost any field, but specifically for professionals. The conversations should happen in real-time or as close to it as possible.

If organizations want to compete for the best talent, retain this talent, and build a qualitative edge over competitors, real-time coaching – as opposed to Annual Performance Reviews – is a compelling place to start.

Effective real-time coaching is a topic in and of itself, that we’ll cover in another post.

For now, looking ahead to 2020, we hope that you’ll consider revising your outdated Annual Performance Review protocol for something more employee-focused and incorporate more real-time coaching to keep employees engaged and growing.

About the Author:

Yael Shafrir is the Chief Marketing Officer of Meet in Place, a global network of innovative meeting spaces designed for an urban boutique hospitality experience. The Meet in Place philosophy is rooted in meeting science, as every design feature and amenity offered serves a unique purpose to make meetings as productive as possible. For more information about Meet in Place or to book a room for your next meeting, please visit https://www.meetinplace.com/us/en

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