The Dreaded Annual Review

I recently got pointed to an article in the New York Times on annual reviews. And, probably because my office AC isn’t functioning at top capacity, I got a little annoyed at yet another management article that forces another important personnel concept through some black-and-white filter and oversimplifies things.

Everyone will likely agree that that giving or receiving a well-received annual review is difficult. The article reinforces our fears by tying some horrible-sounding-and-dubiously-linked statistics on heart attacks, workplace stress, and by tossing around weighty organization names like the American Psychological Association, as if to drive home a point not with a hammer, but rather with a particle collider.

My current opinion is that there’s nothing wrong with having a good annual review. There’s obviously lots wrong with badly-formatted annual reviews. The trick to getting them right is to think about your approach to the reviews and how you treat them and the “secret sauce” is to frame them properly. Given that most people reading this blog are likely techies, let me rephrase it to say that the fundamental problem I’ve seen in annual reviews comes down to something akin to a “proper scoping” problem.

In IT, and more precisely in software development, scoping is a process whereby a “universe of discourse” is sized appropriately to the context. What is relevant to a small block of computer code, like a method on a class, is often not relevant to a larger scope, like the whole application. Not only is it not relevant, it should be hidden so as to not confound the whole system. But, sometimes, other pieces of information gets shared or pushed upwards from a small scope into a larger context and there are often guarded ways of doing this so as to keep things running smoothly.

The same concepts, I think, apply to performance reviews.

If you have a yearly review, hopefully not your only review process, your proper scope is the summary and trending from the year backwards through the year (or 1-3 years) forward. I treat it not like a micromanaged review of every day of the last year, whereby one nitpicks on the instances of failure.

career growth over time

Visualizing career-related growth

Instead, I imagine it like a projection of the data we (the reviewee and reviewer) have from the last year or so forward. Most managers fall into the trap of rehashing the one costly thing you did 11 months ago. That’s wrong, awful, and should have been taken care of on the spot, or at least through smaller-scoped meetings like daily huddles or weekly one-on-ones. By analogy, if you plot a line graph in your mind where the x-axis is time, and the y-axis is the effect on your career, and where each decision you made in the workplace either moved you up or down the y-axis by some subjective amount, I don’t want to talk about each stepwise movement one-by-one. What I want to cover, in a servant-leader-ish way, is the fact that it’s heading generally up, flat or down. Furthermore, what I really want to cover what we can do to affect that rate so that it is the most upward-looking rate the reviewee can achieve.

The annual review should be like a form of one-on-one strategic planning: strengths, weaknesses and long-term action plans that help the individual align themselves with the company and their team, and reach their goals. Done properly, they can be highly motivational. I use them, in a sense, to review each of my teammates’ BHAG, not the minutiae of individual actions I may or may not remember.

The annual review does not replace the smaller-scoped meetings, just like the daily huddle cannot serve the need for larger-scoped guidance (esp. in juniors). You have a collection of tools available to you as a manager. Why not use them?

Now, the common criticisms of annual reviews are:

  • Managers playing favorites: One common complaint is that pet employees never get dinged as badly as the less favored one. And, what’s worse, it’s not an extremely rare occurrence. However, I’d argue that this is not a reason to avoid annual reviews. Any such favoritism is/would be an issue in an annual, a quarterly, a weekly or any daily reviews. If the manager lacks the ability to bring as much objectivity as possible into this process and to work for the team and the company, then the fault lies with the manager, not the review.
  • One-Sidedness: Another common complaint is the one-sidedness of the review. The reviewee sits down and is forced to listen to how he or she fared, with limited viewpoints. Again, this is a problem if one approached the yearly as an “itemized recap”, or ” event-based debriefing”. Taking more of a trend-like, aggregated approach, mixed in with more forward-looking goal-seeking would negate this problem.
  • Compensation Tie-In: Simple. Don’t tie compensation (or termination of compensation) to these types of reviews that are more akin to brainstorming on 10K-foot career growth plans. Personally, I prefer to look at a) growth in responsibility and skills in operation in the team, and b) trends infrequently evaluated perfomance metrics.

It should not be “banished”. It should be done… right.

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