18/08/2015 - 06:02

Reviews offer efficiency dividend

18/08/2015 - 06:02


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When they are not a box-ticking exercise, performance reviews can deliver real benefit.

Reviews offer efficiency dividend
POSITIVE: Performance reviews can bring out the best in your team. Photo: iStockphoto

When they are not a box-ticking exercise, performance reviews can deliver real benefit.

I’ve very much enjoyed recent talk of the death of performance reviews, with several big Australian businesses following a global trend towards ending what many consider a box-ticking exercise.

However, I reserve judgment regarding this new management trend, and feel announcing the death of the performance review may be somewhat premature.

Firstly, the performance review or appraisal has been around a long time.

Some suggest its formal manifestation was in Britain in the early 1800s when progressive mill owner Robert Owen introduced an early, simple form of performance measure, with a colour-coded cube above each machinist’s workspace indicating the quality and quantity of work completed.

While the mills of the day were typically abysmal places to work, Mr Owen was an enlightened boss who had made working conditions much more tolerable, suggesting that the performance appraisal’s roots are not in some industrial hell, but as part of an attempt to curtail that.

Clearly recognising who was doing the best work, and therefore able to enjoy the benefits the mill had to offer, was an important part of improving the lot of the worker. Arguably, a mill with better workers would be more efficient and, therefore, more profitable, allowing workers to enjoy better pay and conditions; in this case at least.

These days, performance appraisals are on the nose in many places because they concentrate on the wrong things or are too infrequent to be useful.

These days, we are told, workers need a constant feedback loop that is less about appraising performance and more about aligning behaviour.

Of course whatever the trend is today will seem old hat and out of date in a decade. However, that doesn’t mean we have to dismiss everything about how things have traditionally been done.

Even though I dislike some parts of the performance appraisal process, which our business conducts twice annually, I do recognise their value and have a historical fondness for the concept.

Before I joined Business News many moons ago, I worked at The West Australian on and off for most of the 1990s. That publisher was seen as a dinosaur in so many facets of its business practices that I viewed it as something of a benchmark at the time for what not to do.

One very clear distinction between The West back then and Business News, when I joined it, was performance reviews. At The West, I had become a senior business journalist without ever having my performance officially reviewed with my participation. Pay rises and promotions were awarded somewhat secretly, with a tap on the shoulder or a quiet word. Not once was I ever told what I was doing (right or wrong) to deserve my position or improve my lot. It was very frustrating.

It was an old-fashioned way of doing business. I still see similar things in government when I get too close for comfort.

Performance reviews, done properly, are part of a functioning meritocracy. In their absence there is politics, such as the playing of favourites, and the need to comprehend special rituals and body language, which tends not to suit the efficient and productive.


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