By Steve Moran

They do the job, but very poorly.

James Lee, the CEO and co-founder of Bella Groves, recently posted on LinkedIn a powerful learning lesson story about his first-ever performance review with a team member. You should go read the entire post, but here are a couple of quotes that will set the stage for this article:

My first time I did a performance review, I was honestly pretty excited. I prepped, wrote detailed notes, and I gave her my best effort. …

It was also the worst performance review I’ve ever given.

The Problem With Performance Reviews

You should only do formal performance reviews if you want to demoralize your team. (If you want to argue they can be done differently, I am open to an article challenging my thinking.) This is from a 2021 article titled “Get Rid of Performance Reviews”:

  • 18% of women reported crying.
  • 25% of men also reported crying. (I have been there on this one.)
  • 34% of millennials said the annual review had driven them to tears.
  • 57% reported annual reviews made them feel like they were in competition with co-workers.

“Can You Give Me a Call When You Get a Chance?”

I am pretty sure my team would say we have a great work environment (the boss is always the last to know, so I want to be careful here), and that is my goal. But I know that when I call a team member or send them a message that goes, “Can you give me a call when you get a chance?” there is this instinctive emotion of “Something is wrong” or “What did I do?”

This is true even if I am calling to deliver great news. I can hear it in their voice when the call comes in.

So when there is a performance review that is scheduled weeks or days in advance, that time period is, for most team members, filled with anxiety.

In the Moment

In the moment is always the right way (with one exception, sort of):

  • If someone needs some coaching, coach while it is fresh, because that will be the most helpful thing you can do.
  • If someone deserves praise, do it at the moment. It will be more powerful for that person and for the team.
  • If someone is underperforming, why wait weeks or months to address the problem? The potential for it to get worse is monumentally higher than that for it to get better.
  • If someone needs firing, do it now, not later. This is the one exception. Sometimes, for various reasons, firing needs to be done strategically, to protect the organization and the individuals. This does not mean you cannot or should not suspend immediately, even if it means with pay.

Pay Raises

Pay should be a separate conversation from performance reviews, even if you insist on doing performance reviews. If you do it as part of the review process, you send messages with pay that you deserve or you don’t depend on what you do. It will almost always disappoint.

I would love to hear from you.