Friday, January 21, 2011

Case study: the annual review

Kaitlyn is a process engineer. She has worked for Jeremiah for quite some time, and feels like he understands her contributions to the team.

Several days ago, she had been looking forward to her annual performance review. She had saved the company $4 million in March of this past year, and remembered the praise Jeremiah had heaped on her in front of the company president. Shortly after this big win, the president asked Jeremiah to broaden her responsibilities. Kaitlyn expected a glowing review and a nice bonus check to cap off a stellar 2010.


Jeremiah settled into his chair, feeling great about his eight-person team. Just this past month he had yet another win, as two of his employees nailed a presentation to the president of the company and Jeremiah came out smelling like roses. The words of the president still rang in his ears: “Jeremiah, let's have lunch. You've done a great job developing the people on your team, and I'd like to talk about your own next steps.”

The lunch was tomorrow. One more review, and he'd be finished with the annual box-checking human resources required. Thankfully it was Kaitlyn, his no-nonsense employee that rarely bothered him with day-to-day minutiae.

Kaitlyn walked in.“Hi Jeremiah, long time no see! How have you been?”“Hey Kaitlyn, things have been going well. The president invited me to lunch to talk about my future – can you believe it? He was really impressed with the presentation I asked Chris and Mark to deliver. Lunch is tomorrow, and I'm going to spend the afternoon getting ready after we get through your review. You're so lucky not to have any direct reports. These reviews are such a pain.”

Kaitlyn shifted in her seat a little as she said, “Congratulations on the great news! I'm really happy for you. Hopefully my review won't be too painful.”

“I think it will be a quick hit, and we'll go right down the form. First your strengths: one of the things I really like about you is that you rarely make noise. When's the last time we had a sit down conversation, something like August, right?”

Kaitlyn noticed the cold January air seemed to seep through the closed window and drift across the back of her neck.

Jeremiah continued, “I think you're a solid performer, and appreciate that about you. Let's see, next box: weaknesses. When the pres reacted the way he did, I knew Chris and Mark really made me and the team look good. So for next year, why don't you spend some time with both of them - just let them know I said it would be good for you to learn from them – and see if you can pick up some tips. They're both Superior, so you know they're on the short list. Who knows, you might work for one of them if I get promoted!”

Abruptly the seasons changed. The air was hot, almost sticky, and Kaitlyn's palms began to sweat. Jeremiah didn't notice the changes in the weather.

“So final two boxes to check, then we're good until next year. On the three-point scale of Needs Improvement, Solid, and Superior, I gave you a Solid. Last box is development, and I think we covered that when I told you your weaknesses. So your bonus will be in the middle range and I hear we're all getting a cost of living salary increase. I still can't figure that out, since my cost of living has gone down since I got rid of the dog. Anyway, do you have any questions, or are you all set? I need you to sign here before you get back to work. All good?

Kaitlyn bit her lip, quelling the summer storm brewing inside. Jeremiah was checking his email, mumbling a bit. “What am I supposed to wear? He's always in a tie, but tomorrow's casual Friday. Maybe I'll bring a tie just in case, but skip the jacket. Need a copy of Chris and Mark's presentation so I can talk to it – maybe bring my resume, too.” He finally looked up. “So are we all good?”

Kaitlyn signed the paper, thanked Jeremiah, and hurried from the room.  The air moved briskly as she left, like the first winds of a hurricane coming in from sea.

End of story. Now for the lessons. You may have guessed them already.

Lesson 1: It's about the employee.  It's not about checking the box, and it's not about the manager.  Amazingly, Jeremiah managed to talk about himself in every part of Kaitlyn's review. Her strength was that he wasn't bothered. Her weakness was really veiled praise for two employees that elevated him. Her development need was about making him look good next year. Even the compensation was about his own cost of living. It's almost like Jeremiah forgot she was sitting there, especially as he drifted off to wonder about his next big appointment. If the employee is willing to give 12 months to the company, the manager should be willing to give appropriate time to focus on the employee during these critical conversations.

Lesson 2: An annual review is an annual review. It is not a review of recent memorable moments for the manager. Kaitlyn saved the company $4 million, well above her annual cost to the company. While the employee often knows what was accomplished during the year, it's incumbent upon managers to keep records of employee highlights and opportunities throughout the year.

Lesson 3: The annual review should be based on measurable performance as much as possible. The impact to the firm of a $4 million cost save is likely significant, much more so than a great presentation to the president. Managers must understand what types of activities are beneficial to the firm, as well as possess the ability to prioritize them for employee conversations.

Lesson 4: Recognize differentiated performance. Remember that the performance of other teammates is only relevant if linked to the individual in front of you. Jeremiah never said Kaitlyn's presentation skills were subpar – only that Chris and Mark were great. Was the presentation significantly better than others given around the company? What about that $4 million save?

Lesson 5: Feedback should be actionable. If a strength is that the manager is not bothered, how does one build on that type of strength? If the development need is stated as a testament to someone else's strength, how does one know if improvement in the area is necessary? Chris and Mark's presentation skills are outside of Kaitlyn's purview. Ideally, feedback is based on goals and behaviors. Goals are set at the beginning of the year, expected behaviors are outlined, and the annual review is based on these benchmarks.

Lesson 6: Management happens all year, not just at year end. Jeremiah couldn't remember the last time he sat with Kaitlyn. Connecting and coaching throughout the year would have generated good will with Kaitlyn, aligned the expectations of both Jeremiah and Kaitlyn, and minimized Kaitlyn's surprise. If a manager doesn't have time to manage, then the issue is either with the manager or the process – not the employee.

Lesson 7: Know your talent. The skill of the team is comprised of the individual skills of the members. If talent is measured by an inappropriate yardstick (presentation skills for this team of process engineers), then inappropriate skills will be developed and showcased.  Recognize the different skills, and show the team how to be successful together.

Lesson 8: Show the path for development. Managers must know where members of the team can go, and how they can get there.

Lesson 9: Know the path you're sharing. The path Kaitlyn was shown is actually fairly clear in the story. It's just not a great path. Jeremiah communicated that Kaitlyn had no chance of promotion this next year, was at least third in line for her manager's job, and he believes her to be an ineffectual communicator.

Lesson 10: Know why things happen. Jeremiah is so excited about his opportunity that he is forgetting the role Kaitlyn's work played in priming the president to invite him to lunch in the first place. The president is already developing Kaitlyn, thanks to her $4 million win in March.

Best,

Bryan

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