Need to Solve Manager Burnout? Rethink Performance Management.

If you're a manager, you are all too familiar with the painful dance and political theater of the traditional performance review system.  

As a manager, you could have as many as 25 direct reports for whom you need to gather, synthesize, translate, and deliver critical feedback. Your reviews are expected to help each employee with their growth and development, assess each employee’s promotion readiness and bonus participation, and last but not least, serve as your company's get out of jail card "in case of wrongful termination suit." 

That puts a lot of pressure on managers, creates an uncomfortable situation for employees, and provides limited value to the company. Consider these damning statistics:

+ 90% of HR leaders think that current performance management systems are not an accurate representation of employee performance. (Mercer, 2017)

+ Nearly ⅔’s of employees think that traditional performance reviews have “no impact” on their personal performance. (Gartner, 2019)

+ Half of all managers do not see value in the review systems used. (Willis Towers Watson, 2016)

In the interest of forging a new path, let’s take a closer look at the underlying issues: 

First, conflicts of interest turn performance reviews into political theater. Obviously, the ideal way to deliver feedback is to be 100% honest, unbiased, and focused solely on a truthful representation of behavior and performance that serves the employee and the company equally. In reality, this is easier said than done. 

Co-workers have favorites. You have favorites. Competing priorities abound. The person you want to retain because of their soft skills or knowledge may also have some major growth areas holding them back from promotion. Knowing that someone's promotion, bonus, or layoff hinges on their annual review, may make you hold back on being 100% truthful. Should bonuses be based on value-to-company now or an employee's future potential? To what extent do managers, especially newer ones, hold back on truthful feedback for fear of how their employees will react?

The conflicts of interest are many, complicated, and unavoidable when permanent record data, compensation, and layoff decisions hinge on the same mechanism meant for honest feedback about growth. Forcing growth and judgment meant for legal protection into the same ritual is a recipe for system failure.

It’s no surprise that most HR leaders, managers, and employees do not believe annual reviews provide value, which further erodes participation and honesty. In other words, people rarely get the candid feedback they need to grow.

Second, there's the volume of work created by current performance management systems. If you have ten reports, and they each get six peer reviews plus a self-review,  your initial review, and the peer reviews you're asked to write, we're talking 80 to 90 reviews for a manager to read or write. This is a huge time drain for managers. If you give your full attention to each review, your regular work suffers. If you phone it in, you're risking people's livelihoods and careers. It's enough to drive a manager to burn out. In fact, research shows that in 2023, over half of all managers reported feeling burned out. (HBR, 2023)

Given the conflicting interest inherent in traditional performance management, relying on those systems for feedback will never deliver needed retention benefits because employees are not getting the developmental feedback they consider so valuable. Basically, managers are putting a ton of work into processes that don’t provide value. It tends to be demoralizing all around.

So, when it comes to performance development, what does provide value to employees and organizations?

One of the highest value drivers of retention in today’s workplace is development opportunities. Of the 50.5 million Americans who quit their jobs in 2022, a full 41% cited lack of development as the main driver–more than any other driver, including compensation. As Scott Galloway said on the Pivot podcast: “The highest ROI retention vehicle for young people, hands down, and people don’t do it…is really robust, disciplined, thoughtful, long reviews. Young people crave feedback…that’s worth 10, 20, 50 thousand dollars a year to them. Really robust, fluid, thoughtful feedback is the greatest ROI in terms of retention.”

Are you ready for the solution? Implement a new type of feedback system that allows managers to serve as coach and mentor, while employees are empowered to drive their feedback and development process. The keys to a successful system may be groundbreaking, but they are not hard. 

1. Separate evaluation from growth. Create a distinct and more frequent mechanism for growth-oriented feedback that is not used for bonuses, promotions, and layoffs.

2. Create and celebrate the practice of asking for feedback and empower employees to drive the process. Our research shows that soliciting feedback improves engagement, reduces fear, and leads to more actionable insights for people. When someone asks for feedback of their own volition, instead of as part of a mandatory process, it fosters real connections, honesty, and better outcomes.

3. Make it private and direct. Let people receive feedback directly from the people they've reached out to for feedback without outside interference. 

4. Lean on AI to do the hard work for you. Leverage tools that synthesize qualitative feedback into actionable insights on next steps.  Advances in natural language processing mean we no longer have to rely on quantitative measures to make sense of our feedback. A quality AI tool will create reports that are higher quality and more personalized than most managers would create, even if they had the time!

So here’s the good news: implementing these principles to redesign your talent strategy is a win-win-win—it will better serve your employees and organization, and address one of the biggest pain points managers face in an often overwhelmingly demanding workplace.