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Overview Performance reviews are widely despised by employees and avoided by managers, yet companies still require them. This podcast examines why traditional reviews often seem disconnected from actual work, why they endure despite shortcomings, and concrete ways to improve them. Key issues include anxiety, defensiveness, vague expectations, and conflicting incentives. The conversation stresses moving from annual judgements to ongoing, constructive discussions. Key Points Why Performance Reviews Are Dreaded • Anxiety & Defensiveness: Reviews often trigger fear due to surprise criticisms, recency bias (focusing on recent mistakes), and lack of transparency in ratings. • Unrelated Feedback: Managers sometimes critique non-job-related behaviours (e.g., taking long lunches), leaving employees feeling unfairly judged. • Year-End Ambush: Managers may postpone feedback until reviews, unloading a year’s critiques at once, which feels harsh. • Compensation Link: Tying reviews to raises/bonuses creates pressure and discourages honest dialogue. Summary: Traditional reviews focus on identifying errors rather than nurturing improvement, leading to disengagement. Modernizing Performance Reviews • Separate Compensation: Decouple feedback from pay discussions to reduce anxiety and focus on development. • Feedforward, Not Feedback: Focus on "how to excel" with actionable guidance rather than dwelling on past errors. • Frequent Check-Ins: Replace annual reviews with quarterly 10-minute conversations to align goals and address obstacles. • Continuously Clarify and Update Goals: Ensure objectives are quantifiable, adjustable, and communicated clearly to avoid moving targets. • Intrinsic Motivation: Tap into employees’ personal drivers (e.g., pride, purpose) rather than relying solely on bonuses. Summary: Ongoing, growth-oriented conversations replace punitive assessments and foster a sense of responsibility. Managerial Challenges • Avoiding Honesty: Managers often dilute feedback to sidestep conflict or prevent turnover, weakening review quality. • 360 Feedback Misuse: Multi-source feedback should aid development, not serve as a performance verdict. • Training Gaps: Managers need live training (not e-learning) to handle difficult conversations and coach effectively. Summary: Managers must emphasize candour and skill-building for meaningful assessments. Insight Performance reviews fail when they prioritize punishment over progress. By fostering regular, forward-looking conversations and decoupling feedback from compensation, organizations can transform reviews into tools for growth and engagement. The future lies in intrinsic motivation, clarity, and continuous dialogue, not annual report cards.