William Martinez will never forget the anxiety he used to feel before his quarterly performance reviews. The customer-service manager recalls sitting in a conference room with his general manager and an HR rep as they would comb through his phone logs, calling out the 28-year-old for making few outbound calls, and reference spreadsheets showing the number of new vendors who were contacted each day. (The goal was to hit 100.)
But to Martinez, quality superseded quantity. "What was way more important to me was working one important vendor and that you got that vendor — that's a big-time account," he says.
And because he viewed these reviews as stuffy and awkward, the employee for the Brooklyn-based Car Part Kings was thrilled when his employer ditched it completely two years ago.
But Martinez isn't alone in loathing the process. According to a 2012 survey conducted by the consulting firm Achievers, employers and employees alike think old-school annual reviews are a waste of time. Just 2 percent of surveyed professionals think they're helpful and necessary. As a result, many companies are trending toward less formal, more relevant procedures to measure performance and provide meaningful feedback.
Martinez's boss, Michael Dash, agrees — which is precisely why the president of the Flatiron-based online auto-parts business tossed the reviews altogether in favor of Web-based tools that measure time and project management, including minutes or hours spent on individual tasks and phone calls. Employees have access to all results, which are graphically displayed on a moment's notice to track performance, workload and quality. All these factors, plus overall sales increase and one's interest in the job, come into play when annual salary increases are discussed in January.
Just 2 percent of surveyed professionals think reviews are helpful and necessary.Photo: Shutterstock.com
"Our employees are happier and feel more efficient when they don't feel judged," Dash says. The old process created anxiety, which was counterproductive to boosting his team's performance.
Although Martinez says transitioning to the Web-based model at first felt a little "Big Brother-ish," now he completely forgets it's there. "There's no reason for me to think about the system," he explains.
Aside from measurement tools, performance-related conversations occur through short daily discussions between managers and employees, as well as biweekly group meetings. The startup has an intimate, informal culture, so conversations about performance occur regularly, not on a time frame of every 180 or 360 days.
This open dialogue, says positive psychology expert Michelle McQuaid, is key to success regardless of the tool to measure performance. "Managers who focus on having strengths-focused conversations with their employees are more likely to see an improvement in job performance, while those who focus on weaknesses are more likely to see a decline," she says. According to the 2015 Strengths @ Work Survey she conducted in conjunction with the VIA Institute, a Cincinnati-based nonprofit, 37 percent of managers pat people on the back saying they're doing OK, 21 percent say nothing and 8 percent focus on weaknesses — "all of which leaves employees feeling less engaged and energized about their work."
Managers who focus on strengths-focused conversations with employees are more likely to see an improvement in job performance, while those who focus on weaknesses are more likely to see a decline.Photo: Shutterstock.com
One way to boost engagement and dialogue is constant interaction. Andrew Royce Bauer, CEO of Royce Leather, got rid of performance reviews five years ago when his Secaucus-based company started performing better post-recession, and provides constant communication and feedback. "Performance is reviewed every single day," says Royce.
Because he built up the family business from a mom-and-pop luggage and leather goods shop, he flexes a day-to-day startup mentality. He tries to give at least every employee a 2-to-3 percent salary increase each year and determines annual bonuses by "how much profit we make each day."
So while processes differ from company to company, Steve Albrecht, HR consultant and co-author of "The Timeless Leader," says the value is in the actual interaction.
"Some employees really hate the whole process, argue during the meetings, and write strong rebuttals," Albrecht says. "Truly successful [employees] listen, agree to make changes, and actually grow."
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