3 Alternatives to Performance Reviews

Calibration. A word that immediately spikes a dose of cortisol into the brain of managers all over the world who are forced to rank employees against other employees at annual performance review time.

I remember the last time I worked as an employee in an organization. The first thing my manager said to me at the start of my performance review was:

Well, you’re already near the top of your salary range for this band of job so you won’t get more money and we can only rank so many people as ‘excellent’ so…well, there you go. Let’s start the review.  Looking at Maslow’s hierarchy of needs, describe where…

Yeah, it really did start out like that.

Employee engagement is a hot topic nowadays as employers look for ways to remain competitive by lowering turnover rates through increasing engagement.

But is it working?

Gallop suggests that 70% of the workforce in the United States is not engaged and 18% of them are actively disengaged. Through a large-scale study, they estimate this costs the US economy between $450 and $550 billion in lost productivity.

What’s interesting about that stat is that it’s largely been the same since the year 2000. Makes me think there is something flawed about their survey method.

But then again, maybe it’s not a surprise, given what they recommend to fix the problem:

  • use the “right” engagement survey
  • coach managers and hold them accountable for engagement scores
  • focus engagement on enterprise levels by ‘weaving in engagement into managers’ and workers’ performance expectations’ – now, that’s a beauty!
  • select the right managers – OK, they’re on to something with this one.

I once worked in an organization where the managers were held accountable for increasing engagement scores. Unfortunately the annual bonuses for these managers were tied to making that number go up. What do you think happened?

Perhaps even more disturbing is how proud this organization was of its ‘high, and constantly increasing, engagement score.’

Are there alternatives to traditional performance management? Yes there are! Is there a ‘best practice’ that will always work? No, there isn’t!

Here are three alternatives to traditional performance reviews I have experimented with:

1. Put the control of individual performance into the hands of the workers.

Remember the fantastic performance review meeting I opened this post with? Well, I decided to run an experiment. My manager sent out my 360⁰ feedback review, except he sent it to many people I rarely worked with. Was he thinking that I, a terrible and untrustworthy employee, would send the feedback to my friends who would give me a good review?

On my 360⁰ report, most of the positive comments were similar to:

“Jason is valued employee.”

“Outcomes have been positive, quick and effective.”

The constructive comments were few and far between. Phrased as “what are Jason’s weaknesses?” these were a couple of the responses:

“Can be abrupt when some people are sensitive to that approach.”

My experiment was to run my own survey. I sent my own survey to everyone I had worked with, even people I knew absolutely did not like working with me. The difference in feedback was astounding:

“Overall you are awesome 🙂 Like many an agile coach, you need to turn up the notch on applied emotional intelligence. There are times to tone it down, and times to tone it up. Would also like to see a little more discipline in bringing intermediate folk that you have coached to the advanced levels, and setting some objectives with some clear outcomes. Keep up all the crazy creativity, energy, and enthusiasm! Keep shaking stuff up, great job so far!”

“I value your contribution to the organization and have said as much to <the CIO> and all of the <Directors>. Keep up the good work!”

But not everyone liked me:

“I am very happy to provide feedback as you are still very insensitive to the culture and the history of the <this organization>. Feels like you walked in here and told us that everything we have ever done is shit and your way is better. “

“Jason, you seem to have good intentions but you have a sort of arrogance behind you that is not pleasant.”

The quality of the feedback was substantially better for me. After I received my feedback, I then sent all the feedback, including the raw comments to everyone I originally sent the survey to along with a list of actions I wanted to improve on.

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This doesn’t solve the annual raise and bonus problem, but it’s a start!

2. Reverse the appraisal process from top-down to bottom-up

Executives hand down the law to middle-management, who then enforce the direction with the worker bees. This is outdated and backwards thinking. Instead of having “managers ensure productivity and high performance,” survey all of the employees (including managers) along two dimensions and ask them these questions:

Dimension One – System level: Feedback about the whole organization

  • How well supported to you feel by the organization to do the best work you can?
  • How likely would you recommend a job at our organization to a friend?
  • If you woke up tomorrow and the biggest impediment to getting work done was gone, what would that look like? (This is the Solution-Focused Brief Therapy miracle question. Some love it, others hate it!)

The objective of this is to get feedback about the overall system of work. This feedback is used to make system-level changes that provide a better workplace for people. This feedback is not used to judge people or make changes to their compensation or bonuses.

Dimension Two – Manager level: Are the managers keeping employees engaged?

  • How likely would you recommend your manager to another team?
  • How effective is your personal relationship with your manager?

The objective of this feedback is for the manager only. This is designed for the manager to understand where he or she can improve. It is not used to enforce any policies, engagement scores, compensations, bonuses or promotions.

“But wait!” you say. How can we trust that we’re increasing engagement if we don’t enforce this? STOP IT! That’s the whole point. Having people become personally responsible for their own performance management is one of the most empowering gestures an organization can do for its employees.

3. Experiment with new practices

Happiness Index: I’ve experimented with the Happiness Index many times. It’s simple to do. Put up a big, visible board and have employees rate their level of happiness every day. Use this data as input into a team or department retrospective on a monthly basis.

Happiness Index

Happiness Index


You’ll notice how the trend of happiness increased over time. This manager was new to the team and wanted to figure out a good way to integrate into the team quickly. I recommended trying a happiness index chart and she ran with it! This allowed her to get immediate feedback about ‘how things were going’ and she could take corrective action right away.

Delivering Happiness: I experimented with this as well, although it didn’t work out in favour of the organization! Our team was having constant challenges with our manager and we didn’t know what to do so we filled out the Delivering Happiness survey. The results showed that the relationship between team members was extremely high (9 out of 10) and the relationship and level of trust between the team members and the manager was extremely low (0 out of 10). This survey is done individually, and anonymously, through a series of questions.

I drew the short straw and was designated to bring the feedback to our manager and his boss. Long story short, nothing positive happened and half the team quit within a few weeks. After that, the manager was moved elsewhere. But, sometimes, that is what’s necessary, according the HR person who did my exit interview!

Management 3.0 #Workout: There are plenty of great ideas in Jurgen Appelo’s new “#Workout book. From Feedback Wraps to Personal Maps and Beyond.” Jurgen shows many practices that are alternatives to performance reviews. He’ll be speaking at the upcoming Spark Toronto, in April, and you’ll discover, first hand, how you can start experimenting with alternatives to performance reviews.

We have an entire track of talks and workshops dedicated to Unleashing People at Spark Toronto. If you’re serious about employee engagement and pushing the boundaries of traditional HR and performance management, this is the conference for you!

Let’s see if by working together we can learn to calibrate organizations to embrace change, empower employees and best of all, reduce the stress placed on managers for engagement scores. After all, who wants a heart attack from work stress to be your final exit interview?

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