Replace Your Broken Annual Review with “Ongoing Performance Management”

Replace Your Broken Annual Review with “Ongoing Performance Management”

In my last LinkedIn article, “Despite the flaws, don’t just stop your annual review”, I shared 5 articles and 3 books that explain why “everyone” hates the annual review process, BUT I cautioned just dropping this all together.

When companies stopped their performance review process, managers gave less feedback and employee performance dropped 10%!  (Wharton article)

So how can you give your team feedback in a positive way, that they enjoy, and that will ultimately achieve the intended goal to improve performance and engagement?

I am glad you asked!

Let me introduce you to “ongoing performance management.”

This process takes the best aspects of the annual review (yes there are some beneficial aspects), and combines it with weekly coaching and feedback, with a dose of training and development planning thrown in for good measure.

Such a hot topic – as I was writing this I received an email quoting a study by the Brandon Hall Group that showed that “organizations that made ongoing performance management a collaborative, strategic priority had better business results than those who didn’t.”

Companies who adopted ongoing performance management saw these improvements:

  • 70% reported an increase in revenue
  • 72% noticed a decrease in voluntary turnover
  • 54% experienced an increase in customer satisfaction

How did they do it?

Organizations are adoping three new methods:

  • ongoing feedback- usually weekly or monthly “one on ones” between managers and each employee individually
  • “ratingless reviews” – without the focus on employee rating on a scale from 1 to 5
  • “crowd-sourced feedback”- input and feedback from peers and direct reports (if a manager) are included, not just an employee’s boss

Companies who saw the best results didn’t stop the annual performance discussion, they shifted the focus to more of an overview of key learnings and jointly created development goals for the next year.

This is what employees want to know– “how can I learn, grow, and perform better next year?”

When companies ADDED these three methods (together) to the annual discussion between an employee and manager, they saw improvements in strategic alignment, developing a performance culture, support of company values and strategy, and yes, increased company performance.

This combination of “cutting edge” practices provided more focused and useful feedback, while increasing both manager and employee experience with the performance management process. [See graph]

Said another way, people like this process better and feel it is more effective on the things that matter– improving employee and company performance.

For more information on how this process works, visit our website page for more resources:

Employee’s want feedback – really!

Employee’s want feedback – really!

Doing performance coaching right means 42% higher productivity.” (Bersin report: High-Impact Performance Management: Using Goals to Focus the 21st-Century Workforce)

The jury is not still out, the key to the care and feeding of great employees is coaching them clearly, positively and often.

In fact, based on a recent survey, the Zenger Folkman group (authors of the Exceptional Leadership book) that employees had a preference for receiving corrective feedback 3 times the level of their preference for receiving positive feedback!

Are you avoiding that corrective feedback? You are actually doing more harm ignoring your staff than just being honest and coaching them where they need it.

Some Zenger Folkman statistics- based on the best and worst leaders (as givers of feedback):

Engagement measure

Worst leaders
(10th percentile)

Top leaders
(90th percentile)

Intent to quit



Perceived opportunities



Feel fairly treated



If you avoid giving feedback (corrective or positive) then this has a dramatic negative impact on the performance of your team.

What should they prioritize? How can they know how to improve? How can they feel challenged?

You can evaluate your own preferences for giving and receiving feedback with this short assessment.

If you find that you are avoiding giving feedback, you may want to develop these skills to enhance your team’s performance and ultimately your job performance, too.

12 No Cost Ways to Reward Your Employees

12 No Cost Ways to Reward Your Employees

The beginning of a new year and also that time of year when employee thoughts turn to… (well on the East Coast everyone is thinking wistfully of spring) “When am I going to get a pay increase?”

Thanks to 50 years of prosperity and a small dose of influence from union contracts, the American worker has been conditioned into thinking (expecting) that they will get a regularly schedule raise in pay in January. The legacy of 20 years of consistent pay practices lives on.

I don’t need to rehash the economic news of the last 6 years, but pay increases since 2008 have been well below the former 3% standard set by the prosperous years, and wage freezes and 18-24 spans between increases are fairly common.

If you are smaller employer or one who has limited profits to continually raise your payroll budget 3% every year, how will you possibly attract great people and retain your top performers?

The good news is that you actually have 12 non-financial ways to reward your employees. Here is a list with some possible solutions.

1. Voluntary (employee paid) benefits—many employers now offer the option for employees to purchase additional benefits at their own cost. The employee typically receives a lower cost for the coverage and it may have tax advantages.

Solution- insurance plans- dental insurance, long term disability or life insurance

2. Work itself– the number one factor in job satisfaction is a sense of achievement. Ask employees how you can improve their work with more variety, sense of purpose or meaning, and challenging assignments

Solution- give your high potential employee a project to manage

3. Autonomy— show of hands- who likes to be micromanaged? Anyone? If you train someone and give appropriate guidelines you can trust the work will be done as needed.

Solution: consider the last 5 questions that someone “ran by you” – is there nugget of wisdom you can share so that you do not have to be consulted or are you just being the chief problem solver?

4. Work load— are you overloading your best performer because she will always take on more and get it done? Does this sound like a recipe for burnout?

Solution: ask your busiest person what you can take off their plate, and then create a plan to do this immediately

5. Resources one of the top reasons people leave their job is because they do not have the tools to do the job properly

Solution: have a meeting to list out hassles and pick the biggest time waster to that inexpensive resources or tools will improve

6. Reliable coworkers– If you have ever worked with someone is who not pulling their weight, then you know how this can make you hopping mad. People have one of three responses: work harder and put up with the slacker, work less so that you don’t feel taken advantage of, or look for another job. If you allow lower contributions you are actually driving out the good performers. And then you are left with the lowest ones.

Solution: If you know who is your weakest link do not wait to have a crucial conversation (see feedback below). Sometimes you have a sense someone is not doing their best but others cover for that person so you don’t know the full extent of the gap. Also allow confidential opportunities to get this feedback from your team.

7. Performance discussions- Yes everyone hates the “performance review,” but on the flip side employees want the opportunity to talk about their role, aspirations and to be appreciated for all their hard work.

Solution: change up your process- stop focusing so much on putting a numerical rating on last year, and more about how the last year provided insights for how to reach goals for this year. I when I say goals I mean how the employee can reach his/her goals within the job.

8. Feedback- Employees expect you to tell them right away if they are not meeting expectations. And they should expect that you deliver this feedback in a positive and constructive manner.

Solution: If you are not comfortable delivering constructive feedback then I suggest reading a few books (101 Tough Conversations is a good start) and then starting small. Trust me, your other employees will thank you for finally have those crucial conversations.

9. Recognition- Timely and targeted public praise is only the cheapest and most powerful reward tool a manager has. If you don’t know what to recognize then you need to sit down and make a list of what behaviors will reach your organization’s goals this year.

Solution: Be on the lookout for a person that did something terrific that is on your list of things to recognize, and publicly praise in your weekly team meeting (you have one, right?)

10. Training and development– Most people want to feel that we are “good” at our job and will be frustrated or demoralized if something is too difficult. A lack of challenging work is also a main reason people look for another job, so you may want to continually upgrade the knowledge and skills so that people don’t get bored. It’s a win-win- employees feel valued and broaden their knowledge and capability, and now you have an employee who can contribute and perform more.

Solution: employees may not be open about their so you want to ask find out what training would dramatically improve performance or if they want a new challenge.

11. Opportunity for Advancement– Surveys show that about half of employees feel there is not a chance for promotion at their employer. For the generation Y who will comprise almost half the workers in the US, a clear career path and opportunities to advance is the top reason for job engagement.

Solutions: If you want people to be loyal, committed and willing to go above and beyond (aka engaged), identify and share the “next” job (not necessarily in management), the change in duties and responsibility, and a training plan to develop into that role.

12. A great boss (I mean coach)- as the saying goes, people leave supervisors, not companies. If you feel unappreciated, criticized, or just plain frustrated by your direct manager you will consider looking for a new one. Coaches are clear about the goals, deliver feedback and train in a positive supportive and appreciative way, and focus on improvement.

Solution: There are so many books and training on how to be a coach and not a boss, but it might help to ask some of the employees you trust where you should work first. We all have blind spots and perhaps a few key changes will dramatically change how you are perceived and the impact you make.

Want to learn more about how to use Total Rewards to attract, engage and retain your best teammates?

Image courtesy of

The “Y” knows how to recognize! The “Story of the Black Bead”

The “Y” knows how to recognize! The “Story of the Black Bead”

Are you recognizing like YMCA? Let me tell you the “Story of the Black Bead.”

And I challenge you to create your own simple and effective recognition program at your work!

Caring, honestly, respect, responsibility—these are the 4 core values of the YMCA and this organization does a terrific job focusing their program and participants on cultivating this values.

My kids and niece attend a YMCA day camp this summer. Every day, there is a “bead ceremony” where the counselors stand up in front of all the campers and publicly recognize a few who exemplified one of the values, and the camper receives a colored bead (each value has its own color—see below for the list).

Now imagine how a 6-year-old feels when they receive a green bead for showing responsibility today. They feel proud, tell their mom, and do more of the recognized behaviors (pick up toys, stay with their buddy on the field trip) the next day. And then the other campers learn, “hey, if I pick up my toys, maybe I will get a bead, too!” And the culture is built one kid and one day at a time.

What about the black bead?

Last week I picked up my son and he runs over to proudly give me this handmade card (see photo below.)

It reads “to earn the black bead, a camper must display an extreme amount of courage and bravery. Plus they must have a spectacular day. Today, Lindy expresses these qualities while going to battle that he would later to be found as the victor. He battled a bee that was terrorizing the camper lunch.  Not giving any thought to his own well-being, he shooed the bee away and saved the lunch. He is forever a hero” AND there was a small dinosaur toy taped to the card.

The story continues that the one and only black bead for the summer has been sitting in the bead jar waiting for just such a brave and courageous camper.

All I can say is “WOW!”

Yes, I am proud that my son was recognized for his heroism but I am also blown away by the creativity of counselor Dominic who took the effort to make up such an award.

Can you imagine the impact if your office had a “bead” ceremony once a month? And what if someone came up with a new (creative, silly) “award” once in a while? Would everyone be tripping over themselves to get those bead by doing the 4 things your organization needs? Just because we are adults, we LIKE recognition too!

Ready to get started, for some ideas, read my blog article “Quick recognition template

black bead

4 Core Values of YMCA:

  • Caring (Red): to demonstrate a sincere concern for others, for their needs and well-being. Related values: compassion, forgiveness, generosity, and kindness.
  • Honesty (Blue): to tell the truth, to demonstrate reliability and trustworthiness through actions that are in keeping with my stated positions and beliefs. Related values: integrity and fairness.
  • Respect (Yellow): to treat others as I would want them to treat me, to value the worth of every person, including myself. Related values: acceptance, empathy, self-respect and tolerance.
  • Responsibility (Green): to do what is right–what I ought to do, to be accountable for my choices of behavior and actions and my promises. Related values: commitment, courage, good health, service and citizenship.

Image courtesy of Stuart Miles at

Quick recognition template

Quick recognition template

Our recent blog post showed that employees desire more appreciation and recognition, so here is a quick template for you to develop your own semi-formal recognition program.

(If you involve your team members in the development process, we will give you bonus points).

•List 3 ABC’s (ABC- attitudes, behaviors and contributions) that would improve your internal team work
•List 3 ABC’s that would improve your customer care
•List 3 ABC’s that support your organization’s core values
•Communicate list of 9 ABC’s to your employees (team meeting? poster on the wall?) and what you plan to do with it
•Make a list of when you can recognize at least one employee publicly for demonstrating one of these ABC’s
•Invite team members to recognize each other when they witness an ABC
•Take one minute to recognize an employee privately if you witness a great ABC
•Schedule and recognize based on your plan

Image courtesy of Maggie Smith at

Sharing the “Profits?”

Sharing the “Profits?”

Does your organization pay discretionary bonuses or “profit sharing” to employees this time of year? Year end payments have many names… bonus, incentive, profit sharing, gain sharing…

The majority of organizations make these annual payouts that typically cost 3-10% of employee pay, but are you getting any “bang for your buck?”

The plans (if you have one) range from the individual to the entire group, and from an entitlement to true pay for performance. Of sometimes managers just pick a number and add it to someone’s paycheck.

The communication ranges from a personal conversation describing the specific performance that earned this bonus, to a team bonus tied to specific profit or operation goals, or a “hey, boss, thanks for the bonus, what was it for?” Perhaps worst of all is “where is MY year end bonus?

When payroll budgets are tight and benefit costs are rising at alarming rates, perhaps your management team should take a look at your year end payments, and ask the following questions:

  1. What are the desired behaviors (performance) that we want to reward (that help us achieve our goals)
  2. Does the payout reward desired behaviors?
  3. Do recipients understand how their payment linked to organization goals? (and what they can do to earn more of this?)
  4. Does it follow our firm’s Three C rules that employee ask:

-Clear— what do I need to do to earn it?

-Control— how do I impact the results that impact the amount?

-(not) Complex— is the plan easy to understand how I earn it?

As much as everyone likes “extra” money during the holidays, perhaps the money you are spending on these could be more effective properly linked to performance or diverted to another part of your total compensation budget.

Image courtesy of David Castillo Dominici at