Why The Money Bit Doesn’t Belong In Your Performance Reviews

We are coming to the end of the year so this means only one thing: that the annual performance appraisal is being completed (yep, it still is - in 2021!). The 'big meeting' that we've prepared for, psyched ourselves up for, the one people will ask me about afterwards and the interaction that will determine what happens in a number of areas of my work-life...and particularly when it comes to pay.

Although we at Lightbulb spend a lot of time with organisations looking to go in a more powerful, painless day-to-day route with performance review it always surprises me that decision-makers also say something like 'but can there be a end of year element that captures everything in writing' (and on multiple pieces of paper with a degree of formality). But why is this? Why when you have chosen an approach that is much more progressive, real-life, current and productive would you still then want to harp back to elements of 'how we have always done it' ?

Well, the main thing is the obsession with wanting to link the review to my pay increase and/or bonus. It is still common that organisations want to rate people's performance across a year so it can be handily converted on an excel spreadsheet into a % or £ award. It just feels very fair doesn't it: but it isn't!

  • Often the rating I get is subjectively applied with all sorts of bias (particularly the 'recency' effect) and most people will think they deserved a rating one higher than the one they were awarded in any event.
  • Things I did 10 months ago are forgotten, my manager may have moved on mid-year, objectives we agreed are no longer relevant and so on.
  • Its even worse when reward is tied only to 'objectives' even though I may have had several 'surprise' retrospective achievements this year that weren't related to any of these proactively agreed objectives.
  • It's done to the employee - they have little influence around what they will be 'awarded'

The answer is to divorce reward from the performance review process. Think about how to manage performance day-to-day and then separately consider how to pay people. Stop tying it all into one neat process because neatness doesn't exist in real-life when it comes to this subject.

Check out CHINWAG: Flexible, ‘admin-lite’ performance review on an if needed, when needed basis for overnight results.