Introducing Performance Dialogue

Block made news last week for getting rid of performance reviews. Yay for them! It's newsworthy because, despite decades of calls to kill performance reviews, they persist in most companies. Change at this level is hard, so I've updated an old post from the time before LinkedIn. It builds on Addicted to Curiosity.

Part I: Feedback is dead

Long live feedback! Here's some feedback for you: feedback is a fallacy. Feedback is so twentieth century. The companies designed by the industrial barons didn't care much what people thought of them, so they gave them feedback the way an amp gives you feedback when you point a mic at it. It certainly makes you jump! Henry Ford is credited with "check your brain at the gate," because he wanted people to do as they were told and not mess up the assembly line. In that paradigm, feedback is the screech of supervisors yelling at workers who don't do the work as prescribed. That worked for consistency, scale, and efficiency (then), but it has serious downsides for organizations that depend on knowledge, creativity, and communication (now).

Fast-forward about a hundred years. We're beyond the Industrial Age and in the middle of the Idea Economy. When you depend on people, not machines, to generate value, it's a good idea to adopt better words for how humans behave when they work together.

According to Marshall Goldsmith, there are only two problems with negative feedback: people don't want to hear it, and people don't want to give it. He's right, and What Got You Here Won't Get You There is full of simple tips. But there's another (really big) problem: feedback is not a human word, it's a machine word. Even Goldsmith thinks the word should change; he coined "feed forward" (I don't think that's going to catch on).

There's only one problem with feedback: it doesn't describe what successful people do. Successful people are curious. In fact, they are addicted to curiosity. They never stop asking questions, and they use what they learn to grow in a positive cycle. It's not painful, boring, or a waste of time. It's essential.

Curious people ask: What do you think? How can we make this happen? Do you have suggestions for how I could adjust my approach? Curiosity is innate, but asking questions that elicit good advice takes practice, and it's fun, because you discover a pile of good ideas and make friends along the way.

First, curiosity runs along a time spectrum. In the moment, you ask specific questions about immediate next steps. Periodically, you step back and ask about patterns in your experience and progress toward a longer-term goal.

Second, when you ask, state your intent. It cues your collaborators to narrow their suggestions and keeps the advice aligned with where you're headed. As the saying goes, "if you don't know where you are going, any road will take you there."

Finally, people are often shy about sharing critical opinions. What if you're offended and the relationship suffers? Maybe they haven't noticed anything worth saying. Reflecting on someone else's behavior is a cognitive drain. Make it easier with an invitation that reassures and narrows the focus, and you'll get more than "Looks good!" when you ask how you're doing:

1. Express intent (I'm trying to…)
2. Disclose a concern (but I'm concerned that…)
3. Invite input (can you help with this?)
4. Explore with curiosity (what could I adjust?)

Do this with several people and you'll have the perspectives you need to make good decisions and reach your goals.

Part II: Let's kill performance reviews

Research on performance appraisals shows satisfaction well below what we'd accept for any other business process. Would you accept a 65% CSAT score in your customer contact center? We seem stuck on "something is better than nothing," absorbing the cost and negative energy to avoid feeling blind and out of control. As a business-driven HR executive, I think anything under 90% participant satisfaction is unacceptable for such an expensive investment.

I've renovated performance review systems at more than a handful of companies, including Citibank, Levi's, and Mercury Interactive, and I don't think "best practice" is good enough. Even done with care and diligence, it's time-consuming, expensive, and unsatisfying: a dreaded, necessary evil people suffer through to be considered for a raise.

The real problem is more fundamental than bias, pay transparency, or administrative drag. Fixing workflows, simplifying forms, changing cycles, and training managers all assume a paradigm about people and work that is out of date and misaligned with what high performers do (see Part I).

Fixing reviews isn't about delivering them better; it's about asking, "What's the best way to help people perform at their best?" Some warm-up questions:

• How do we know people are doing good work? The right work?
• Why do entrepreneurs achieve so much without a performance review, or a boss?
• Why do some sports teams overachieve while others don't?
• What motivates people to do good work? Do bonuses?
• How do you measure human output, and who should?
• What information do people need to perform at their best?
• When have you done your best work? What makes it "your best work"?
• What conditions, and what relationships, exist in high-performance situations?
• How does the brain react to threats? To challenges, rewards, and compliments?
• What is the language of high performance? Where did the term feedback originate?

My design work led me to a simple recognition: the person who benefits most from a review is the person receiving it. That reverses the dynamic from giving to gathering. Most performance systems are designed from the perspective of the manager or the company, to allocate limited money. The goal is to differentiate people, which corrupts the value of any feedback from the start.

Start with the individual instead, and the problem becomes "How can I find out if I'm doing my work well?", with a separate question, "Am I paid fairly for the work I produce?" I've clarified this into two conversations, each with two driving questions. I call it Performance Dialogue.

Conversation 1: Evaluating my performance

• Is this the right work for me to do?
• Is the work I'm doing good enough?

Conversation 2: Navigating my career

• Do I have the capabilities to succeed in this job?
• What capabilities do I need to progress in my career?

Divided this way, the process, system, or tool looks very different from the performance review we all know and hate. The design questions become:

• Who can help me answer this question? (managers, peers, clients)
• What are good ways to gather their input? (based on how people actually behave with each other)
• How can I make giving input easy? (the burden is mine, not theirs)
• How do I make sense of the answers? (tools like a short survey)
• How often should I ask? (depends on the nature of my work)

So yes, let's kill performance reviews and replace them with performance dialogue!

Part III: Okay, so how do I get a raise?

Compensation is an agreement between an organization and a person to pay a certain amount for a certain type and scope of work. Performance Dialogue has no direct connection to compensation. Zero. Zilch. Nada.

Performance Dialogue is about the work, not an economic evaluation. High performance, creativity, and innovation require people to take risks. Tie performance conversations to pay and they get corrupted: nobody shares a mistake or a struggle for fear of being dinged in their rating.

Compensation means evaluating capabilities against the market, once or twice a year, much as you would when hiring. What does their experience show they can do? What responsibilities can they reliably carry? What's the evidence? People with more capabilities generally earn more, so as someone grows, their pay should follow what the market would pay them. The switch is from evaluating performance against goals to evaluating growth in capabilities against a market.

How do you get a raise? Get curious, and adjust your behavior based on the input you gather from the people you work with (see Part I).

What about poor performers?

Basic performance is binary: either someone is putting in the effort and making progress, or they're not. If someone is no longer willing, or is substantially unable, to do the work, it's time to part ways. Performance Dialogue should surface that long before any compensation or career conversation. Keeping someone on the team who can't do the work is a disservice to everyone. Act with care and compassion, but follow through.

First published on LinkedIn.