Businesses abandoning traditional year end evaluation - preferring continual feedback and coaching


Many businesses are turning their back on the traditional year end performance review with staff, in favour of "continual feedback and coaching." (see Ewenstein, Hancock and Komm, McKinsey Quarterly).

Many managers and staff have viewed performance management as time consuming, overly subjective and potentially de-motivating. Linking, what may be viewed by staff, as arbitrary and subjective performance ratings with compensation risks producing negative outcomes - as suggested by recent findings in cognitive sciences and behavioural economics (such as the research of Nobel laureate Daniel Kahneman and others).  

What really motivates people - the emerging evidence increasingly shows - is not compensation (or at least not just compensation), but autonomy, mastery and purpose. For professional services firms this can mean providing greater access to clients. Empowering managers to run their own teams like mini-firms - with their own marketing budget and control - might be just the ticket to inspire your professional staff to greater levels of achievement. 

When combined with regular client feedback linked to the staff that provide their service, a firm not only manages its increased leverage risk, but is able to give staff direct feedback. In many cases your staff will receive morale boosting comments that might not otherwise have been received. 

And receiving a rich fact base of observations about staff from the client perspective enables firms to move beyond the arbitrary once a year performance review to a a continuous feedback and coaching model. As the Managing Partner of a law firm client of Client Culture recently told us, using regular client feedback; "has allowed us to use the comments in our own staff feedback sessions and they love it as it directly relates to how they see the clients."

Greg Tilse