They are about as popular as root canals and overseas flights in coach, yet the traditional job performance review, which typically goes a long way towards determining an employee’s salary and career prospects, remains a standard component of talent management.

The suggestion that this tool, which virtually all companies use—despite the fact that a vast majority of managers, HR heads and CEOs share the disdain employees have for reviews— should be jettisoned is the subject of a recent article in strategy + business, which draws heavily on neuroscience in its critique of standard performance management systems.

“If you want a high-performance organization, you have to reverse the destructive effects of conventional performance management [KP1]. You need to find ways to evaluate people that recognize the unique role each person has played in moving the organization forward,” write the authors. “These evaluations must be based on a growth mind-set: They must recognize that with the right context and conditions, anyone’s abilities can be improved, especially given the expansive, flexible nature of the human brain.”

Rethinking how to approach the performance review, then, is an important part of solid talent management.

Room and Encouragement to Grow

Before discussing a better way to handle performance evaluations, it is helpful to understand at least a bit of the science against reviews that include a numeric rating and future goal setting. The strategy + business piece notes that this approach triggers a “brain hijack” akin to the elemental fight-or-flight response humans have when faced with a physical threat.

Clearly, that amped up brain activity is not exactly conducive to a thoughtful give-and-take about how an employee performed in the past and what he or she can do to improve.

Instead, during a review, commit yourself to an actual dialogue about what an employee’s strengths and talents are and where in the company those skills can be best utilized. Think of it as an opportunity for managers and employees to dream big together.

That said, a review should not simply be an casual conversation without specifics. At the end of the review, managers and direct reports should identify tangible goals and realistic avenues for pursuing them.

For instance, if an employee expresses interest in a different position in the company, facilitate a meeting between the employee and a manager in that department or allow the employee to shadow someone who already holds a job they desire. This will show a real commitment to the employee’s interests and career growth—something that even a positive traditional performance review is unlikely to accomplish.

Reap the Rewards

Using a performance review as a way for employees to chart their own course within your company has a lot of benefits. There is plenty of evidence that workers who feel trusted are more motivated and loyal to their employers—and what demonstrates more trust than giving an employee independence? Allowing employees to pursue opportunities in different areas of the company and encouraging internal mobility can also result in much needed innovation and fresh thinking. This can be a great antidote to the silo mentality that can form within divisions of a company.

This open dialogue can also help when it comes time to have difficult conversations about layoffs. When the discussion of downsizing or restructuring starts, many companies will take steps to move their key performers to other areas of the company. Having a complete understanding of the knowledge base and skill sets of all employees can help management redeploy individuals into open positions where their skills and interests are a match. Having a strong internal mobility program in place leads to strong redeployment decisions and can result in fewer layoffs than would have been necessary otherwise, saving not only the expense of severance but also reducing some of the inevitable drop in morale.

We all know that the current approach to performance reviews is deeply flawed. And if, as the famous saying goes, the definition of insanity is doing the same thing over and over again and expecting different results, then now is the time to try something new.

16 October 2014

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