It’s time for another foray into this enjoyable minefield. I’ve been exploring the interesting space of performance and development over multiple posts over the years. More recently, I’ve been noodling on its deeper, philosophical aspects, grappling with questions such as what is performance? is the notion of individual performance still relevant in organizations where work is highly collaborative and deeply intertwined? and what is required of someone to be able to fairly assess someone else’s performance?
But today, I’m leaving these deep questions aside and taking a more incremental step, hopefully in the right direction.
Performance reviews/evaluations have been drawing a lot of fire in recent years. The key design flaw in traditional performance review cycles is their tendency to mix up pieces that pertain to a person’s performance and pieces that pertain to their development. The NeuroLeadership Institute has been making a pretty compelling case for why this is a major issue. In a nutshell, there is an inherent trade-off between accurately evaluating performance and accelerating development. When we try to do both in the same program we do a sub-par job on both.
Yet while the push for change is justified, many organizations have reacted in rather naive ways: from paying lip service and rebranding the same program as “development”, through eliminating the program altogether to fully replacing it with a developmental program (often a series of coaching conversations).
These responses tend to ignore an important truth: that while development is growing in importance and needs to be deliberately designed for, the original reason for introducing performance evaluations still exists — the need to fairly allocate compensation. Steven Sinofsky, Lori Goler, Janelle Galle, and Adam Grant seem to agree.
And by fairly allocating compensation, I’m not talking about bonuses or other forms of variable pay which I’m strongly opposed to. I’m talking about the ongoing need for proportionality between a person’s contribution to the org and their compensation, from the extremes (termination, promotion) to the mundane (merit increases).
Obviously paying lip service doesn’t solve anything, but so does the alternatives. Eliminating the program creates a vacuum that’ll most likely lead to a less-fair emergent solution. And a development program will do a terrible job driving fair compensation, just like an evaluation program will do a terrible job driving development.
BOTH performance management AND professional development are critical organizational needs. But they need to be addressed separately using two different programs with some key design differences.
Performance Management Program/Process
- Purpose: procedural justice in compensation allocation
- Driven by the evaluator(s)
- Feedback is absolute: comparison against an existing bar/benchmark. Ideally, binary (yes/no rather than ratings) evaluation against job level rubrics that span domain mastery, collaborative ability, and company values
- Evaluates work in the context of the current role
Professional Development Program/Process
- Purpose: overcoming our human “present bias” (by creating the space for reflecting on the past and envisioning the future)
- Driven by the individual motivated to develop
- Feedback is relative: ideally stack-ranking the dimensions/components of performance from the one to focus the most on to the one to focus the least on
- Considers whether the current role is the best container for development (vs. taking on add’l responsibilities / new role / different company / etc.)
The two programs are mostly decoupled from one another with one caveat: some outcomes of the performance management process constrain the possible pathways for development.
While we should keep looking for better designs to manifest the purpose of each program, we need to keep in mind that both are critical.