Hello.
My topic today is the annual performance review.
Recently, there have been quite heated discussions about it,
criticism is ranging from it being ineffective
and thus a waste of time to even worse:
that it is demotivating and thus counterproductive.
A UCLA professor recently, a couple of years ago,
wrote a book titled "Get rid of the performance review,"
meaning that we have to eliminate it all together.
Well, I have a different view.
I think we should keep it, but we should at the same time change it radically.
I'm an economist.
Economics is known as the dismal science.
Thus, you will probably not be surprised by my choice of analogy here.
It is that of a funeral.
I recently attended a funeral.
It was the funeral of a former university professor
who passed away having lived a long life, aged about 80.
It's not that much that I want to talk about the funeral,
but rather about what happened after it.
So after the funeral we gathered in the nearby restaurant
and started reflecting on his life.
What happened there, you could say, was
the ultimate performance review of his life.
Quite many people stood up, one by one, sometimes a couple,
and they had something to say.
You could say in corporate terminology,
it was something like a 360 degree feedback loop.
Surprisingly, - no, not surprisingly -
actually it was all positive;
negative comments were consistently avoided
although maybe there were some,
but they were avoided at that commemorative event.
What was interesting as well,
most people, maybe not all of them, but most people were very specific.
They told quite specific stories.
Somebody remembered how he had shared his apartment
while he was a young student and was looking for a place in the dorms.
Another one talked about how he made her passionate about ice hockey,
of which he was also a big fan.
Of course, there were also stories about them having fun together,
but they were all, most of them, were specific stories.
There was a pity though, so to say, in the air, a feeling
that [it is] a pity actually that we save all those good stories
for the moment when the person is not able to hear them anymore.
His chair at the table was empty.
At that moment I thought:
"How can we use it, how can we learn from it?"
Maybe we can indeed transplant
some of what happened during that commemorative event
to what we call the annual performance review
in our companies and organizations.
What would we do?
Well, for one day in a year,
we would make our employees, our people, our teammates
feel like dead celebrities
like Elvis, like a star,
make them feel like they have a fan base in our company or in our organization.
How would we go about it?
Well, one thing, we should stick just to the positive,
eliminate the negative feedback, say,
negative feedback on that particular day of the annual performance review is tabu.
And we should also be specific.
We should tell, looking in retrospective of that year,
how that person contributed to our company and tell specific stories,
say, how that person, for example, made a great presentation,
having had just half an hour to prepare;
that presentation helped us to win an important customer.
Maybe another story how she decided
to get another cash register to eliminate
the hated lunchtime queues at the cantine.
Specific stories like those
instead of some high-level corporate success story
that would give the person something
to identify with, be proud of and replicate.
At this point, I feel a question in the air,
a question about: "What do we do then with the negative feedback?"
And fair enough.
Well, I think that negative feedback should arrive throughout the year
as an ambulance.
Or maybe for those in the US,
the pizza delivery van is an even better analogy.
So negative comments should be instant, as well as positive comments, of course,
but for the annual feedback, for the annual performance review,
we should stick just to the positive, in form of specific stories
that the person can identify with and be proud of.
Thus, my suggestion is not to bury the annual performance review,
but to learn from the ultimate performance review.
Thank you very much.
(Applause)