Some business leaders view the annual employee review process with a level of optimism typically reserved for root canals. Caroline Starner, Oakley’s global head of human resources, spoke to her executives about why they pursue a process that is most commonly initiated with the word “ugh.” The answers varied from legal obligation to necessity in rewarding pay increases. “The whole system is just very antiquated,” Starner says. “Why wait an entire year before giving feedback? What are you really evaluating? What value is this process adding to the business?”
Starner decided to ditch the forms and try something new: meaningful conversations between managers and employees. Simple. Authentic. A setting that encourages real-time, meaningful discussions about performance. She set a goal for these meaningful conversations to happen once a quarter instead of filling out a form full of questions annually—a year in business is ancient history.
“Performance appraisals were started in the 1950s, when business moved a lot slower and one year of activities was the equivalent of three months,” Starner says. “Performance appraisals were also usually the driver for an employee’s annual raise. In the traditional system, managers feel like they have to complete the appraisal form in a way that will lead to that increased outcome they want.” At Oakley, the merit process still happens annually and performance is still a factor, but the bureaucracy is eliminated and managers have more discretion over whom they want to reward and how much. “After all, managers are the ones who have to deliver the message on both performance and pay, so they should own the decision,” Starner says.
“Employees are more engaged when they’re having real two-way conversations with their bosses, and they’re also learning to develop strengths by getting feedback sooner.”
Starner says that employees’ most frequent dissatisfaction with their managers is that they don’t have a personal connection. By asking managers to have one meaningful conversation with their employees every three months—positive or negative, performance-related or otherwise—the human resources department was able to increase camaraderie and trust within the company.
“Employees are more engaged when they’re having real two-way conversations with their bosses, and they’re also learning to develop strengths by getting feedback sooner,” Starner says. “Because we’ve separated pay from these evaluations, we’re able to really say what we think as it happens.”
But how does human resources know that the managers are actually having these conversations? Each quarter, the department sends out employee surveys to see whose boss has had a meaningful conversation with them in the past ninety days. In its most recent survey, 61 percent of the people reported having a meaningful conversation. This is up from 55 percent in a baseline survey. “We know it’s working,” Starner says. “In our last employee engagement survey [which had an 88 percent response rate], we saw a six-point improvement in favorable responses to the question: My immediate supervisor/manager gives me regular, on-going feedback on my performance.”
“By doing this, we’re actually helping people to talk about the topics they should be talking about,” Starner continues. “Before, many times, a manager would write out all of his or her answers in advance and they would just be reading answers off the sheet, and maybe even jerry-rigging it so the employee would get the raise they wanted to give.” As a result, managers and employees are now talking about career goals, how to develop new skills, and how to advance to the next level. This keeps employees motivated and helps them to develop skills they might not have had in the past.
As with almost all forms of communication, the evaluation process is becoming more social. Starner sees that millennials aren’t satisfied with current one-way evaluation systems and believes that one day they will want to have the ability to evaluate their bosses’ performances as well. With the increase in popularity of websites like ratemyprofessor.com, young employees are now seeking places on their company intranet to tell others about their work experiences, both good and bad. “This is moving from a one-way system to a 360-degree system where people will be evaluated by all the people around them,” Starner says. “It will no longer be ‘I’m the boss, and I’m calling this meeting now.’”
These meaningful conversations are also helping Oakley keep employees at the company. After all, it only takes a little bit of personal touch to change a person’s perspective on work; if someone is beginning to feel bored or like it’s time to make a career change, a manager now has the ability to step in with some just-in-time coaching to keep the employee challenged, satisfied, and feeling valued. “Just because these are meaningful conversations doesn’t mean they have to be difficult ones,” Starner says. “Open communication is really one of the best value-adds we can provide for the companies we work for.”