We're probably all a bit too familiar with the annual performance review. It's essentially a monitoring exercise focused on individuals. How much have you produced? What did you achieve? How can you do better next time?
But performance is about more than the individual. It's really about how well teams meet their objectives; how well teams produce and what teams achieve. Individuals play their roles within their team, but organisation success hinges on team success more than anything any one person can do.
So how do we move beyond monitoring individual output to enabling teams to successfully achieve their objectives?
Enabling team performance
Take a look at objective-focused frameworks, like Management by Objectives (MBO) or more recently Objectives and Key Results (OKR).
These frameworks involve defining objectives and success indicators that carry through the organisation: strategic objectives translate into team and individual goals.
Objectives are revisited and re-defined regularly and will (ideally) involve input from the entire organisation. This ensures that everyone's aligned with an objective, knows what they need to do to help achieve it, and has the skills and resources necessary to do so.
Performance management then becomes a continuous process, as regular check-ins are necessary to make sure objectives stay on track.
What does that look like?
To significantly oversimplify the process:
Set objectives collaboratively: For the organisation and for the teams within it
Talk - continuously - about the objectives: Are they still realistic and achievable? Are there any blockers? Have priorities shifted?
Review the objectives: Were they achieved? Were the results as expected? What have you learned for next time?
Do it all again.
If you’re using performance reviews to determine compensation, then OKR (for instance) isn’t a direct replacement. Objectives are supposed to stretch teams and drive innovation, and by their very nature some may be too ambitious to achieve fully. If you use that as an excuse for lower compensation, you may have some very unhappy people on the team.
People will also be doing things in the course of their work that doesn’t directly feed into one of your three-to-five objectives, so that work won't be captured when you discuss objective achievement.
Does that mean individual performance reviews still have a place?
We'd argue that this means you need to talk to your team about more than just their progress towards objectives. Talk about their learning and development. Talk about their wellbeing, the things that excite them about their work, and the things that get in the way.
In short, help them do the work that will enable the organisation to achieve its objectives. Put far less energy into evaluating their performance after the fact.