A New Trend in Performance Reviews

The other day I came across an interesting article in the Wall Street Journal.

The author, Rachel Feintzeig describes a new development where companies tend to move from the big (and often dreaded) annual or semi-annual performance review to a series of smaller and more informal discussions about goals and performance that are uncoupled from compensation reviews and rely on input from managers, peers and direct reports. She calls it the “never-ending performance review” and it’s being taken up by companies who have been at the forefront of new developments in HR for many years, such as Adobe Systems Inc., General Electric Co. or Deloitte LLP.

The article is up-front about some of the People Change challenges this poses as people are asked to rate and be rated by their colleagues on a regular basis, which of course includes giving and being able to receive constructive criticism. Uncomfortable as this may be for some people I think for project managers and project team members this is a positive and exciting development.

When I first worked on projects as a project coordinator I can think back to a few performance reviews that left me baffled and frustrated. My functional manager had seen and was able to evaluate only a fraction of the work I had done, since I had been assigned to several projects he did not manage or supervise, and my contributions never factored into his review. A lot of hard work I had done had no bearing on what ended up in my personnel file (and impacted my compensation or promotion). On the other hand, unless one of my project managers took the time to sit down with me and talk to me about areas of improvement it was also hard to know where I could do better, learn and grow.

Later, when I managed project teams myself I found it equally discouraging that many of my team members who did exceptional work on my projects never saw their dedication pay off in a consistent manner. If I had the time and the opportunity arose I would thank them and give them feedback on their contribution and I would also try to communicate with their functional managers, but there was no formal and common practice in place across the company.

Overall I consider the old system broken in matrix organizations for several reasons:

  • Project work doesn’t always count when it comes to the way your functional manager evaluates you
  • Responsibility for providing feedback is on functional managers and some project managers do not care as long as you don’t cause actual problems on the project
  • Nobody is around to tell or even remembers what you did on a project that finished 6 months before the annual review

On the other hand I can see a number of advantages when a matrix organization adopts the new approach:

  • Project managers are encouraged to provide regular feedback to their project teams, to receive feedback from them and to enable peer-to-peer feedback allowing the entire team to learn and grow. This is now a matter of policy, not just of good leadership style
  • Information travels between project managers and functional managers giving functional managers a more complete picture of the achievements and growth opportunities of their direct reports
  • For organizations that run short projects that would normally fall through the cracks of an annual review cycle performance on these projects now becomes relevant to managers and team members

Read Rachel Feintzeig’s WSJ article here