This post is contributed by Xavier Shay, who teaches our Engineering Leadership course. He was most recently Director of Payment Engineering and Analytics at Square, where he coached managers and senior leaders across the company.

What is the best career advice you’ve ever received? Odds are it wasn’t from an annual performance review.

Formalized performance reviews are at best an overly costly way to get marginal benefit, and at worst actively harmful to development and morale. They are a relic from a time when it was the only meaningful interaction between a manager and their team.

A performance review is supposed to be a tool for learning and career development. Yet, I’ve worked on and with many teams filled with growth-mindset people, and universally the response to HR-driven reviews has been a collective groan. People on the team find it awkward, uncomfortable, and a distraction from their work. Managers lose hours — often 4+ per report— both at work and in lost sleep fretting over the exact wording of sentences.

We have teams of creative people who crave feedback, of people who want to learn and grow. Let’s not stifle them with bureaucracy.

Better Ways

If done well, formal performance reviews can result in valuable coaching. However, there are many more effective means of achieving the same ends. Here is one process I’ve had success with (adapted from Catalytic Coaching, a great resource on the topic): write a self-evaluation and present it to your manager. Try answering three questions:

What have I done for the company lately? What have I done for myself? What do I want to be when I grow up? (And what do I need to get there?)

I typically encourage people to do this every six to twelve months; nothing too formal, hand-written notes in a notebook is fine. These notes are used as a guide for presenting it verbally to you, their manager. You have a single job: listen! This is a mistake common to most formal systems: managers speak first, rather than listen.

As you listen you’ll notice things. They forget to credit themselves with a big project they led earlier in the year. They don’t seem aware that everyone thought a different project was a failure. They are asking for guidance towards a promotion. Using this information, you can respond. Either in the moment, or in a follow up session if you want more time to prepare.

Sometimes, you’ll want to write something down for them — for example if they’re asking for more structured feedback or help on a specific topic. At this point your next step looks more like a typical formal review, but with a huge difference: you’ve been asked for specific guidance. You can prepare something much more targeted which is more likely to be acted on. You listened first, and you haven’t applied a blanket approach to everyone on your team. This is far more effective use of your time, particularly if people on your team are already using 1:1s effectively.

Much of the time, a person’s self-evaluation will be a recap of 1:1s, an honest assessment of their situation, and a declaration that they are feeling good about their progress. Given that, what more value would you add with five pages of evaluation? Your time is better spent on the people who actually need and want that type of guidance.

What about peer feedback?

Formal reviews are often the only time where feedback is solicited from peers and reports. Isn’t that valuable? Not how it is typically done.

Writing good peer feedback is hard, particularly if you haven’t worked that closely with someone. People procrastinate, waste time on it, and ultimately don’t give you (the manager collecting it) particularly actionable feedback anyway.

Worse, it sets up an expectation that giving feedback is solely the manager’s job. Most peer feedback I’ve collected as a manager this way (good and bad) has really been an opportunity for coaching on how to deliver feedback effectively. Avoid the temptation to synthesize and anonymize feedback that really should be given directly. This applies just as much, if not more so, for positive feedback: robbing people of the chance to experience giving praise directly is a squandered opportunity.

It is still important to have an outlet for people to give feedback without needing a direct confrontation. But writing a couple of sentences for a permanent HR record is a poor one. Instead, as someone’s manager, try talking to people about them instead. You’ll get higher quality information because you can pick up on non-verbal cues and draw out “partial” opinions that people are uncomfortable putting into cohesive written sentences. These are often the most critical opinions to discover, and they are completely lost when people are typing text into boxes.

That said, this can be particularly tricky due to the imbalance of power between you and the people your are asking for feedback. Always get permission from someone before asking for feedback on their behalf. Kim Scott’s template for Speak Truth To Power meetings (#6) is a great example of a way to work through this in the case of collecting team feedback for managers.

A Performance Review in Disguise?

[ed: this section was added post-publication on 6/12/2018]

As I’ve commonly encountered the term, a performance review is driven by management, with a primary purpose of evaluation. Emphasis on review. What I’m proposing is a process driven by employees, with a primary purpose of coaching and development. Any backwards-looking review that happens is only in service of forward-looking coaching.

If employees don’t want to participate, that’s fine. As a manager if I feel that someone needs more unsolicited structured feedback to succeed, I don’t wait for a regular process to provide it.

Principles

Any corporate process needs to be evaluated critically:

What is the goal? What are the problems or opportunities it is addressing?

What is the cost?

Is the process achieving that goal, for an acceptable cost?

Formal performance reviews often fail twice: they don’t meet their stated goals, at a high cost. I’ve found self-evaluation and direct peer feedback to be more effective. With a tighter feedback loop through early validation and an emphasis on listening, these processes save considerable time and energy.

As managers, we shape the processes and culture of our company. It’s our job to push back against burdensome and ineffective performance reviews. Find a growth process that you and your team can be excited about!

I’m teaching an in-person, small group, engineering management class Monday and Thursday evenings in San Francisco July 9 to August 2. Would love to have you join us!