How good coaching can replace bad performance reviews
I originally wrote this article for TrainingZone back in 2023, but it appears the issue hasn’t gone away.
There seems to be increasing chatter in the HR and L&D worlds that it’s time to abandon performance reviews and annual appraisals. The claim is that these processes are a tired relic of 20th century manual work with little relevance to today’s knowledge work environments.
Performance reviews can be a pain
There are certainly some obvious problems.
For example, how do we ensure managers’ views of subjective qualities such as “excellent” or “average” are aligned? When I was working on a major performance management implementation some years ago, the answer was to produce vast booklets that drilled down into detailed behavioural indicators.
Unsurprisingly, these competency frameworks didn’t survive the reality of busy managers needing something practical and easy to use.
In review systems with a direct link to pay, there is also the question of how to prevent perceptions of unfairness from destroying motivation, and how to stop leaders and managers bending the system to suit themselves.
I even worked with a company where staff pooled their forced ranking bonuses and redistributed them evenly amongst themselves.
So organisations are abandoning them
A few years back, research firm Bersin by Deloitte reported that around 70% of companies were reconsidering their performance management strategy, including some major organisations. Accenture, IBM and Adobe all claimed formal performance reviews to be expensive, time-consuming and ultimately ineffective.
Even General Electric, long seen as a pioneer of these systems, abandoned its formal annual reviews and replaced them with an app providing more frequent feedback.
But this may be a mistake
According to a Forbes article, 35 out of 37 line managers said they would happily give up performance reviews. That makes me nervous, because I wonder what they’ll do instead.
Probably nothing.
Managers are busy. If you remove something structured without replacing it, other priorities will quickly fill the space.
I agree that formal annual appraisal systems are largely outdated and often ineffective. But I cannot agree that reviewing performance itself is no longer useful. Understanding what’s going well and what isn’t remains a fundamental business need.
And in reality, most organisations are not abandoning performance review altogether. They are replacing formal, bureaucratic processes with more immediate, ongoing conversations.
What if we coached instead?
So it seems that what we need is less process and more dialogue, but with enough consistency that managers know what they’re doing, employees get a fair experience, and the organisation retains some oversight of performance.
We already have such an approach. If we coach our people properly, we can hold them accountable for performance and develop them at the same time.
Take the well-known GROW framework. It contains the four elements we would want to address in a good performance conversation anyway.
Goals
Exploring goals allows us to combine organisational targets and KPIs with the individual’s own sense of contribution.
Importantly, we are no longer tied to goals set in January and reviewed in December, by which point they may be irrelevant.
Reality
A good coaching conversation explores current reality as the individual sees it.
The aim is to raise awareness in a non-judgemental way, helping people learn from their own experience. It is not about apportioning blame.
Notice we are talking about “reality”, not “past”. One of the main criticisms of traditional performance management is the amount of time spent raking over history, when the real challenges lie in the present and future.
Options
This stage looks ahead.
Rather than defaulting to sending someone on a course, we can explore a range of development options, including on-the-job experiences, secondments or shadowing opportunities.
We are no longer limited to formal training as the primary route to improvement.
Will
The “will” or “way forward” stage turns thinking into action.
Here we can agree next steps, timelines, milestones and accountability. This is where intent becomes commitment.
It is worth remembering that GROW is not a rigid process. Conversations may start with reality and end with goals, depending on what is most useful in the moment.
Will that do the job?
In my experience, people need five key questions answered as they consider their work performance:
What is my job?
How well do I have to do it?
How am I doing?
How have I done?
What’s next?
Answering these questions does not require endless forms.
Nor does it require the digital equivalent of endless forms. There are many sophisticated performance management systems available, but busy managers will only use them if they genuinely help.
Otherwise, they will find ways around them or do the minimum necessary, much like salespeople have done with CRM systems for years.
Nor is there any need for hours in meeting rooms or complex consistency checks.
Next steps
Do more of what you are probably doing already. Play up coaching and play down performance review.
Communicate this clearly to your managers. A good coaching conversation, often taking place in the flow of daily work rather than as a separate event, will answer the five key questions and leave people clearer, more focused and more motivated.
Of course, line managers may need to build or refresh their coaching skills. But if we are saving time and money by reducing outdated appraisal processes, that seems like a sensible place to invest.
First published on TrainingZone