So You Want to Ditch Your Annual Performance Review?

You'd have to be an HR pro hiding out in an underground cubicle with no Wi-Fi to avoid hearing headline after headline of some of the world's most highly recognized companies announcing that they're ditching the annual performance review.

And, chances are, your C-suite is now asking you to consider tossing them to the wind as well. Who can blame them ... who doesn't want to be "leading edge" and "modern"?

If and when this happens to you, I've got two things to recommend for your response:

Nod your head vigorously and note that ongoing performance management is something you've been advocating for some time now.

Then ask: "What kind of time and budget can we commit to training and developing our managers to be effective coaches?"

Why the focus on coaching? Well, we know that a once-a-year conversation about performance between a manager and an employee has little (or even a negative) effect on business outcomes and productivity.

We also know that informal, in-the-moment feedback on performance is not only desired by employees but is also more effective. But to be able to provide this kind of feedback, managers need to have proficient coaching skills.

However, a Brandon Hall Group research report noted that only:

8% of respondents strongly agreed that managers are skilled at giving timely, actionable feedback

9% of respondents strongly agreed that managers are skilled at defining actionable development

11% of respondents strongly agreed that managers clearly communicate performance expectations

In total, 64% of organizations indicated that "training managers to be effective coaches was their greatest performance management opportunity and challenge."

So, I guess the question is: where to start?

It's too easy to blame the manager for a lack of coaching and feedback skills. If your organization assigned them into these roles, then your organization better help "upskill" them.

Here are some options that organizations can choose from:

Establish a mentoring program

Offer one-on-one training with an expert

Provide classroom-based training

Enable access to web-based training courses

Likely, you may want to offer a mix of the above, depending on the type and preferences of your workforce. For many organizations, web-based training is appealing because it is generally less expensive, works for remote and regional staff, allows the employee to select a time that works best for them, and can be completed in "chunks" rather than all at once.

Management 101 tells you that effective feedback is timely, specific, and actionable. But this begs the question: Are your managers equipped to define specific actions for development? And are these actions aligned with the rest of your organization?

This is where a competency framework comes in.

Wait. Did you just roll your eyes? Okay, I know ... I know ... the term "competencies" has been bandied about so much these days that it's practically lost its meaning.

To get us all on the same page, here's how the Human Resources Professional Association (HRPA) defines competencies:

A competency is a cluster of related knowledge, skills, abilities, and characteristics that are related to the performance of a significant aspect of the practice of a profession.

A competency model is a collection of competencies that are relevant to the performance in a particular job, job family, or functional area.

A competency framework is a broad framework for integrating, organizing, and aligning various competency models.

And here's the thing: a competency framework is the "secret sauce" to effective performance management.

The framework aligns your organization -- how it attracts, retains, develops and promotes its people - and gives everyone a common language. Getting it right is important.

One of the most common challenges that HR professionals face when it comes to competencies is poor design. You can have a beautifully written competency that rolls off the tongue but is meaningless to both employees and managers because it's just not usable.

For a competency to be usable, people need to understand what "competence" actually looks like in action. According to our partner Development Dimensions International (DDI), you'll want to ideally implement a competency framework that provides a roadmap of expected behaviors, delineates how goals should be accomplished, and illuminates development needs in current or future-planned roles.

For managers, this is critically helpful. Not only can they clearly identify what competencies and gaps exist on their own teams, but how to develop and enhance their own coaching and leadership skills.

A best practice step is to integrate coaching into managers' development plans through your company's LMS.

So, is the decision then: performance review or ongoing coaching? No. You don't need to choose between the two.

Successful, high-performing organizations continue to ask managers to collaboratively complete a year-end wrap-up that summarizes an employee's achievements and aspirations for the future.

And why wouldn't they? The difference is that these high-performing orgs also ensure their managers check-in regularly with employees to provide coaching and feedback.

Like most things involving people, it's not a zero-sum game. And just like an individual learning how to be a better coach, it will take an organization's culture, time, and practice to get better at ongoing, agile performance management.