Make performance reviews more effective

By Guy Gage

Firm leaders around the nation use annual performance reviews as a central element in their people-management programs. This familiar practice has been institutionalized in firms for decades. The belief behind these reviews seems to be that letting people know where they stand will motivate them to do better. But does that really happen? Do people leave their performance reviews inspired and committed to do better?

Not surprisingly, the answer is not really. Research has shown that employers and employees both agree that annual performance meetings are less effective than expected. The current practice of focusing on past performance fails to engage employees and often leaves them feeling discouraged, having heard of all their failings, missteps, and should-have-dones from the past year. Still, the practice continues.

Imagine what an ineffective performance review might sound like:

Manager: [after small talk] John, last year, when we discussed your goals, you agreed to working 1,650 charge hours. I see on this report that you are likely to be about 100 hours short by year end. What happened?

John: [Explanations offered].

Manager: In addition, you were going to improve your realization by 5%. It looks like it's about the same as last year. I guess you didn't do too well on that goal either.

John: [Explanations offered].

Manager: OK. Let's talk about this coming year. What should your goals be?

John: [Silence].

It would surprise no one if John left that meeting less than motivated.

Rather than focus on performance, perhaps a better way to energize employees is to consider what is important to them. We know that people do things for their reasons, not someone else's. If the individual doesn't have an internal desire to accomplish something, don't expect much effort, commitment, or perseverance. There must be a better way.

What if the conversation centered around reviewing the progress the staff member made since the last meeting? And then, together, the manager and staff member could chart a course, including what they plan to learn and accomplish for the next period. By tapping into their internal career aspirations, employees will be motivated and committed to grow and succeed — because it's what they want.

To make these reviews more motivational, it is important to ask the recipients about their aspirations and career path, what they enjoy and dislike, and the opportunities in the firm going forward. By understanding their ambitions, partners can commit to helping them achieve their goals and advocate for their success.

Managers could ask a series of questions that would be focused on what is most important to their staff. For example, "What part of your work do you really like?" Don't be surprised if there is little substantive response at first. After all, most have never been asked the question that directly. While this question may not initially be the big motivator some firm leaders hope for, it does let the employee know that the firm is committed to their career ambitions. After being asked the question a few times, people will begin to ponder and articulate their aspirations.

Partners can help by asking additional questions to clarify their thinking, such as:

  • What energizes you?
  • Are you satisfied with the amount of opportunities you get to do what you really enjoy?

In addition, if partners ask, "What part of your work do you dislike?", follow-up questions might include:

  • What is it that deenergizes you?
  • How much of your work is this part?

Here's an example of how this type of performance review might go:

Manager: In our last meeting, you said you really enjoyed working on the construction team because you have enough experience to give clients insights about their business. Can you give me an example of a recent project that allowed you to do so?

John: Yes. Two months ago, [gives example] ….

Manager: Nice work. I know they appreciated your contributions. Do you have any thoughts about what you would like to learn for this next year?

John: Well, I haven't had much experience with [area staff member would like to learn] …

Manager: We should be able to schedule your assignments so that you have the opportunity to do more of what you like. I encourage you to look for some CPE that will help. We can review your progress in our next meeting.

John: That would be great.

While this vignette may seem a bit idealistic, it represents the tone and spirit of a very different approach.

By shifting the conversation from performance reporting to career trajectory, people will apply renewed effort to succeed because it is what they want.  

Guy Gage is founder of the consulting firm PartnersCoach, a national practice located in West Virginia. To comment on this article or to suggest an idea for another article, contact Rocky Rosen at Rocky.Rosen@aicpa-cima.com.

Guy Gage will be speaking at two sessions at ENGAGE 2023. ENGAGE will be held June 5–8, 2023, at the ARIA in Las Vegas and live online. Learn more or register here.

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