Overhauling the Performance Review Process

When Ellum Leadership Advisors CEO Tem Lawal, Ph.D learned that, in a recent Gallup study, 95% of managers said they are unsatisfied with their company’s performance evaluation systems, he said “I’m surprised it’s not 100%.” 

Dr. Lawal is an HR expert: he’s helped industry giants like FedEx and Gartner redesign their leadership development processes, and he’s currently spearheading new talent strategy approaches in the Deep Tech industry with companies like Mesa Quantum. To him, the standard performance evaluation is clunky and unsuccessful:

“The [usual] process of feedback doesn’t necessarily lead to the goals of feedback. Months of reviews, alignments, and calibrations, but people still don’t know where they stand or where to go in their careers.”

It’s clear that we have a widespread performance review problem. According to a WTW 2022 survey, only one in three employees feel their performance is evaluated fairly, and according to Gallup, disengaged employees collectively cost U.S. companies $1.6 trillion a year. Employees find the process dehumanizing, and managers feel that it is not a productive platform to offer feedback.

Dr. Lawal is part of a movement of people leaders looking to unlock a better workplace by revolutionizing the way companies evaluate their talent. 

How can we do away with the tense and ineffective performance review processes for something that feels holistic, straightforward, and supportive? For Dr. Lawal, the answer revolves around frequent feedback conversations. 

Normalizing Feedback Conversations

“Having the performance conversations that actually drive performance is the goal of feedback processes. It’s all about having the right conversations.” Dr. Lawal says.

While at a previous company, he posed two simple questions to managers:“What is going well? And what needs to be improved?”. He then asked the managers to document their answers and discuss them with their direct reports quarterly. 

After a year, each manager had three or four performance-based conversations to reference when conducting their annual review. This allowed the managers to accurately track performance over time, understand the employee’s personal experiences, and provide truly actionable feedback. It also helped both parties get into the habit of having these conversations regularly.

“[Employees] just want more information on how they can grow. And so no surprise, if you’re having feedback conversations more consistently, you’re going to see employees more satisfied because they’re armed with the information and tools they need to continue to grow and add value to the organization.”

When asked if continuous feedback check-ins could lead to increased burnout, Dr. Lawal said it was actually quite the opposite. 

“If you’re having more regular performance and quality feedback conversations, you actually see more engaged employees because they know where they stand and where they need to grow. Managers are able to course correct more quickly and not have to wait for long stretches before they’re able to pivot. You see better trust, better transparency. 

If you’re not having frequent performance conversations, it becomes about managing a process that’s not delivering quality feedback, and that’s when you get system fatigue. It’s like, ‘oh, we have to go through this whole thing again.’

But if you’re able to deliver feedback in a way that feels intuitive and informative, not cumbersome and convoluted, you actually see less burnout, more buy-in, more enhanced performance, and better manager satisfaction.

A lot of times managers want to give feedback to their employees, but they aren’t in the regular practice of doing so. Having a mechanism that helps to facilitate them stepping into that space makes it easier for everybody involved.”

While the standard performance review involves a tense and stilted annual check-in, Dr. Lawal’s process relies on continuous dialogue. When these honest feedback conversations are happening regularly, an authentic, nuanced story about the employee’s professional experience reveals itself. What if we could capture this story and use it to develop a more effective and holistic performance feedback process? Dr. Lawal calls this the narrative-based evaluation. 

This type of performance evaluation, if done correctly, has the potential to realign the employee-manager relationship with trust and transparency as the building blocks and  growth as the ultimate goal. Feedback becomes an integral and welcomed part of work culture, rather than an annual exercise in anxiety.

Giving Quality Feedback

As Dr. Lawal points out, this evaluation model is only effective if the feedback is “delivered in a way that feels intuitive and informative”. The manager must be proactive in creating an environment that allows for constructive performance conversations. To Dr. Lawal, there are three core objectives to focus on to effectively conduct those conversations:

Scaling Narrative Feedback Through AI

Narrative feedback has one glaring disadvantage: from an HR perspective, it is very hard to aggregate. Collecting and processing each employee’s unique professional story may be doable at a smaller firm, but with large companies it becomes near impossible. Because of this, larger companies tend to rely heavily on quantitative metrics.

Dr. Lawal notes that “Quantitative feedback is extremely valuable, but it in itself doesn’t drive performance. People are still people, and if you turn people into numbers, you lose sight of the goal.”

Enter AI, the tool that Dr. Lawal calls “the Great Equalizer”. Instead of using AI to put employees to restrictive boxes, we can use it to do away with those boxes altogether. By aggregating the many feedback conversations that an employee and manager have, “We now have a tool that can provide narrative feedback at scale. This is phenomenal.” 

This may be the most revolutionary thing that AI can bring to the Human Resources field. Instead of using this technology to further dehumanize the evaluation process, what if we used it to document the uniqueness and depth of human experience at scale? This would truly unlock the possibilities of the narrative-based performance evaluation and provide an avenue for it to reshape the way we manage performance across industries. 

However, Dr. Lawal warns that our current AI models have a tendency to “sanitize and flatten narratives. So knowing how to set guardrails and have quality checks in the tool itself is important. You need to have very intentional mechanisms that’s built with the AI to ensure that it’s accurate, that it contextualizes correctly.”

He leaves us with one central question:

“How do we leverage AI responsibly and take advantage of  its capability, but in a way that’s responsible, accurate, and ethical? That’s the linchpin of the next frontier of AI+Performance.”