I’ve not been shy about my disdain for the annual appraisal

In fact, it’s now my mission to rid the world of it.  Judging by the frequent roll of the eyes, sigh or just plain expression of grimace when they come up in conversation, I’m not alone.

But why is this stalwart of management practice so despised?

To answer that, I need to give you a very quick tour of our most primal piece of programming.  Before anything else, our brains are wired to keep us safe and alive and in the main, we’re all pretty grateful for that.  To do that though, we have each built up our own Rolodex of perceived threats that can be thumbed through at lightening speed when we think we might be looking trouble in the face.  This all happens so fast that we don’t need to stand there and think if that car is going to hit me, we will just get the hell out of the way.

Great as all that might seem, some of the definitions written on those Rolodex cards might not be quite so life-threatening, but that doesn’t stop our trigger-happy defence systems firing off.  When then happens, literally our bodies go into fight or flight and guess what?  That’s no good if you need to be objective, creative, resourceful, i.e. all the qualities you need to be high-performing.

Coming back to the annual appraisal, what David Rock found out was that even just the prospect of an impending appraisal can set off our fight or flight circuits and close down all those useful resources.  I wrote about this in my research paper “Priming for Performance” and there’s also good roundup of studies on business.com

So, why are OKRs (objectives & key results) a better brain “fit”?

There are many reasons, but I’m going to take what I think are the top three.

First, as OKRs are discussed on a weekly/fortnightly basis, this removes the vast disconnect between the setting and reviewing of annual objectives.  Business velocity is vastly accelerated in today’s enterprise and you can be certain what was needed 12 months ago, probably won’t be now.  Therefore, trying to judge someone’s performance against 12 month old objectives is both likely to be met with frustration at best and unfairness at worst.

Second, OKR best practice favours the decoupling of objectives and pay which means the chance an objectives conversation will become an emotionally charged one is much reduced.  I’m not suggesting you don’t pay for performance, but that the reward decision takes in more than just OKR achievement, i.e. factors like how well they represent your values, their future potential and market value.

Third, as OKRs (if done well) are a collaborative and inclusive process, there’s the opportunity for managers to increase the role of their people in key decisions, which will boost their sense of inclusion and leave a sense that they are valued.  This goes directly to enhancing one of the key areas David Rock argues we can positively impact to improve collaboration – status.

The bottom line is that, by moving your performance management from being an emotionally charged annual event, to a process that just happens and becomes the way teams work, will be the biggest single change you can make to transform the achievements of your business.

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