MR. FRANK SESNOAnd good day to you. Thanks for joining us. I'm Frank Sesno from the School of Media and Public Affairs at the George Washington University, sitting in for Diane Rehm, who's on vacation this week. Well, apparently, few things are as universally disliked as the annual performance review. And in recent years, some high profile companies have scrapped theirs, saying the traditional approach just isn't good for employers or employees.

MR. FRANK SESNOWell, joining me for what should be a fascinating conversation about the pros and cons of this often annual ritual of performance review are three people who know it very well, from a studio at KERA in Dallas. Dick Grote of Grote Consulting Corporation. From a studio at Stanford University, Donna Morris of Adobe. And here in the studio with me is Brian Kropp of CEB. CEB is a business advisory company serving more than 16,000 leaders around the world, more than 6,000 organizations. Brian, is that right?

MR. BRIAN KROPPThat's absolutely right.

SESNOSo, you have done a great deal of research about these wonderful things we call performance reviews. And we all know them. We get them, we give them, we participate in them, whether we like it or not. How many people actually go through a performance review process in the American workforce? How predominant is this and how many people really don't like them?

KROPPAlmost everybody is the answer to pretty much all those questions. When you look at the data, there's about 96 percent of companies that have some sort of defined performance review process that occurs either twice a year, once a year, whatever it might be, but an ongoing process across almost every organization. And it's something that's been in place at most companies for decades. Now, the other part of that is that almost every organization's not done very well. If you're to trust what employees say, and we serve, across our organization, about a million people per year.

KROPPOne of the things that we consistently find from them is that their appreciation or enjoyment of the performance review is quite low.

SESNOEnjoyment of the performance review.

KROPPYeah.

SESNOIt's kind of like enjoying a root canal.

KROPPYou know, more than 90 percent of the employees that we've surveyed have said that the performance review itself is just a waste of time, the way it's currently conducted at most organizations. It tends to be long, painful, you get to spend an hour, whatever it might be, with your manager, where they point out all the things that you didn't do well across the last year.

SESNOSo, it's mostly negative?

KROPPMost of the time, it's backward looking and negative. So, it tends to be, here's all the things that you did across the last year. Here's what you could have done better. And one of the things about the backward looking and negative part of it is that you're usually getting performance feedback about things that you did three months ago, six months ago, nine months ago, twelve months ago. And the applicability of that backward looking information to your performance today is actually pretty low.

SESNOAnd you also found -- I find this fascinating, that a lot of the employees who were receiving highest scores are not the highest performers.

KROPPAbsolutely right. One of the things that's really different about today's work environment is that it's no longer enough for you to just do your job well, to do your job tasks well. It's really about how you work with and through other people to have a bigger impact on the performance of your organization. So, how do you be more collaborative, more connected, share information, work across silos, things that almost every company wants. The problem, though, is that the performance review, the way that it's done at most organizations now, really just looks narrowly at your job tasks.

KROPPAnd so what we find is that two thirds of the people that are actually having the biggest impact on the performance of the organization don't get the highest performance score. And conversely, two thirds of the people that do get the highest performance score are not having the biggest impact on the organization.

SESNODick Grote, you are author of six books, if I've got that right, on performance management. You've got another one coming out later this year.

MR. DICK GROTEAnother one coming out with McGraw and Hill at the end of the year.

SESNOYeah, so, tell us, are performance appraisals just being done wrong across the board? I mean, what's your take on this big issue?

GROTEWell, Frank, I will admit right from the start that I am probably the last of the true believers about the importance of doing performance appraisal. And as Brian said, this is a process that goes back decades. General Electric, in the 1950s, was the first company that really started doing what we know today as performance appraisal. And I'm one who believes that with all the problems, and Brian's talked about many, and there are many others. Donna's gonna talk about some more. There still is a need for what we know as the conventional performance appraisal. There are many reasons for it. There is business necessity.

GROTEBut at bedrock, I believe that, ultimately, the reason we do performance appraisal is because it's an ethical obligation of leadership. Every person who works for a company, whether that organization is Adobe or CEB or Grote Consulting Corporation, NPR, or Joe's Bar and Grill. It doesn't matter. Every person who works for an organization wants the answer to two questions. And the two questions are, first, what do you expect of me? And second, how am I doing at meeting your expectations? And the conventional performance appraisal, with all the problems we're familiar with, does the best job of answering those two questions on the sure basis.

SESNOLet me move to Donna Morris. Donna Morris is a Senior Vice President of People and Places at Adobe.

MS. DONNA MORRISThank you.

SESNOAnd in 2012, you led an effort to scrap performance reviews. What is being Vice President of People and Places mean? Is that another way to refer to HR? Human Resources?

MORRISIt is. It's really -- at Adobe, our people truly are the best asset that we have, being an IP based company. And so, People and Places is really about the employees that we have and where we work.

SESNOOkay, so you administered the performance review process for Adobe in that capacity. And just a couple of years ago, you decided to scrap it. How come?

MORRISRight. Well, let me build on some of the comment that both Brian and Dick have made. You know, fundamentally, when we bring people into Adobe, we view them as a core asset. And to the point that Brian was making, our former process was really very much like a dreaded dental appointment. I agree with that comment completely. And it was in the rear view mirror. We fundamentally believe that employees need to know real time, how they're performing. And it's not to say that performance management isn't important. In fact, in our opinion, performance management is an ongoing process, that is just part of how we do business at Adobe.

SESNOHow much time was Adobe spending on performance management? And how did your employees feel about it?

MORRISRight. Well, let me start with our employees. It really was a despised process by our employees.

SESNODespised?

MORRISAnd I would as far as saying despised. I mean, we would see that, concluding, after our annual review process, our voluntary attrition, so people leaving on their own, would go up by almost 50 percent. So, really, they were getting their once a year feedback, and often, they disagreed with that feedback. And that would result in them being disheartened about their opportunity to make a business impact, and they would leave. And frankly, the process would take over nine months. We calculated that within a 12,000 person company, we were spending approximately 80,000 hours on a process that we didn't see the return on that enough.

SESNO80,000 hours, nine months, and people hated it. So you scrapped it.

MORRISWe scrapped it.

SESNOWhat did you put in its place?

MORRISRight. So, let me underscore that we scrapped it, and what we've adopted is called the check in. And it provides a disciplined framework for establishing expectations, which is really fundamental. You know, at the end of the day, we're in business to build exceptional products and solutions for our customers. And we want to make sure that all of our employees have set expectations, that they're provided with continuous, ongoing, genuine feedback, so that they can really make an impact, back to those business priorities.

SESNOBrian, is Adobe a trend setter here? Are other companies dumping the traditional job review process?

KROPPAdobe is certainly at the forefront here. And without a doubt, a very progressive organization, in terms of this direction. We see there's a couple of different categories out there. There's a couple of companies like Adobe, like Juniper Networks, a variety of others, that are really rethinking the impact of the performance management system and process as it's historically been done. But that still is only going to be about the three to four percent of leading organizations out there.

KROPPThere's another big tranche of companies that are trying to figure out, how do we change what the performance process looks like? And one of the big things that has influenced a lot of the thinking, recently, is a lot of the neuroscience around understanding the brain and how the typical performance review actually impacts peoples' brains.

SESNOThere's actually research on the performance review and the brain?

KROPPYeah, there's research that's being done today, where people are imaging someone's brain as they're getting the equivalent of a performance review. And they can tell what parts of the brain are actually lighting up when they're getting this feedback.

SESNODoes any part of the brain light up?

KROPPWell, it's interesting. When you look at the imaging of the brain here, during a typical performance review process, the backward looking evaluative part, the surface area of the brain can actually contract to absorb less information.

SESNOSo, I'm shutting down.

KROPPAnd one way -- you're shutting down. And, you know, the typical performance review, when it's done that way, can actually make people dumber by decreasing the size of the brain and the ability of it to absorb information. Cause it puts people in a fear state. They're afraid for it, they dread the anticipation of it, a lot of the things that Donna was talking about. So, we're seeing leading organizations change their performance management system to not just be so backward looking, but to say, how does your job align with the future of the company? Where are you going?

SESNODick Grote, there's another part of the performance review process called the forced ranking process, and I think a lot of people who've been through this will know it. They get a label. They're a high performer, or a middle performer, or a low performer, or they're a role model or what have you. That's another thing that is being examined and reexamined.

GROTEYes, it is. And what forced ranking is is a pejorative term, and actually, organizations have almost abandoned the use of the term, forced ranking, because it carries so much negative baggage. But the fact is, what forced ranking involves is relative comparison. When we look at evaluating how well a person on a job is done, there are basically two ways we can do it. One is, absolute comparison. How good a job did George do against his goals and objectives and expectations? The other way we can evaluate the performance is through relative comparison.

GROTEHow well did George do compared with how well Mary and Sam and Bill did? And I think both of those are important spectacles to have in the lens, to understand just how well someone has performed.

SESNOBrian, briefly, last year, Microsoft got a lot of attention when they dumped these rating systems.

KROPPAbsolutely. And at the same time, you saw Yahoo put in a system that has some of these components to it. In fact, what we see is about 60 percent, 56 percent or so of companies, do not use forced rankings at all. About 25 percent use them, almost across the entire workforce. And the remaining percent, they do it for some parts of their workforce, but not all.

SESNOOkay. We're talking about performance reviews, annual performance reviews, forced rankings and other rankings. And what actually benefits the employer and the employee. We welcome your comments and your calls at 1-800-433-8850 or drshow@wamu.org for an email. I'm Frank Sesno, and you're listening to "The Diane Rehm Show."

SESNOWelcome back to "The Diane Rehm Show." I'm Frank Sesno sitting in for Diane this week. Our guests this hour, Donna Morris, senior vice-president of people and places at Adobe. Dick Grote, president of Grote Consulting Corporation. He's written a book on annual performance reviews and performance management. And Brian Kropp, managing director at CEB's human resources practice. They're a business advisory company serving lots of leaders and businesses around the world.

SESNOWe're talking about the annual performance review process. You've probably administered it or been a part of it or been subject to it. And we're starting to get some very interesting emails and calls. And I want to go right to some of the emails, folks, and just read these to you. And then let you jump in because I think what a lot of people feel is that this process is too subjective and that it doesn't help them.

SESNOHere is an email from Dan in Sacramento. He says, "I've served in just about every sector, military, civilian and now federal government. In each setting my performance reviews were inextricably linked to my reviewers' opinions, their likes and dislikes about me. The military was one place where my appraisals were used against me in the harshest manner surprisingly by two African American supervisors. Important, since I'm African American. Too many factors come into play," he says, "fairly or not and it makes appraisals basically worthless."

SESNOFrom Tom on Twitter he says, "Employees need to review the boss's performance, and that's about all you need to say," and all he says. And from Tom, "I like performance reviews. I'm a hard-working conscientious employee and that's been reflected in all my performance reviews. Maybe those who complain are simply not being told the truth about their job performance and they don't like it."

SESNOAnd finally from Stephanie on Facebook, "Any good supervisor will give feedback throughout the year and not save it up for a review. I had a couple of supervisors many years ago who stored up everything I did wrong over the past year and dumped it on me at the review." Brian.

KROPPYou know, the question about the accuracy I think is a really important one. A couple of things for you. The way that people work today, as I mentioned, it's more collaborative, more interconnected. You know, within some of the research I'm getting at CEB, what we found compared to three years ago, there's more than a 50 percent increase in the amount of time that the average employee actually spends working with other people. And one of the implications of that is that your manager doesn't see what you do as much anymore.

KROPPYou can get more feedback from the people that you work with, your peers, your colleagues, your direct reports, people in other parts of the business. And most companies don't do a good job of capturing all that information.

SESNODonna, how do you handle that fact, if that in fact is -- because I assume it's very collaborative at Adobe...

MORRISRight, right.

SESNO...within your environment.

MORRISExactly. Well, as I said again, our approach is really making sure everybody has expectations. So back to some of the individuals that are emailing or, you know, posting comments on Facebook, et cetera, it all starts with knowing what's expected of you. And based on those expectation, we're really approaching this such that feedback comes across the board, meaning we're highly matrix.

MORRISTo the point that Brian is making, it's just as likely that a peer, a colleague in another department or business unit might have rich valuable feedback for you or...

SESNOSo how do you actually do that on a practical level? Do you sit everybody down in a room and people hold hands and drink hot tea...

MORRISNo.

SESNO...and talk about one another in group therapy or how do you do it?

MORRISYeah -- no. It's really real times. So just think of it as a regular operating mechanism. So the way we approach things at Adobe is we're highly collaborative. As you can imagine being in a technology and a growing technology company, a lot of our demographics have really evolved in the last five years. And we have -- you know, a high percentage of our employees that are used to the 140 characters in Tweet. And that's the means by which they want to get real times, fast, actionable feedback. And so...

SESNOSo are they Tweeting one another's evaluation?

MORRISYeah, exactly.

SESNONo really, take us -- I want to know how this actually works because I still do these very long forms.

MORRISRight, right. So there are no forms. There is no stack ranking. What really we expect people to do is in the course of a manager's working relationship with their employee, we're expecting that at least on a regular cadence -- when we say a regular cadence, we say we want to see it monthly. And it shouldn't go as far as quarterly. You're sitting down with your employee and it's reciprocal. The employee is sharing their expectations. The manager is speaking about their expectations. They're respectively sharing feedback.

MORRISAnd that feedback is coming not only between the employee and the manager, but frankly other individuals that employee works with. Let me give you a very specific example from our leadership team. So I report to our chief executive officer together with my peers who run the respective functions. We just wrapped up our quarter -- you might've seen our earnings route yesterday. We actually, on Monday, spent time talking about each of our respective priorities, our expectations and collectively giving feedback on the performance of each of our respective functions, organizations and our own individual performance. So it's how we do business here at Adobe. It's real time.

MORRISWhen you talk about force ranking, our view is you should never be surprised in terms of the alignment between your rewards and your performance is (unintelligible) regular dialogue.

SESNODo you do that? Do you rank people...

MORRIS...dialogue.

SESNO...do you rank people?

MORRISWe do not. We do not.

SESNOYou do not. So...

MORRISAnd we eliminated that with our process. And we did feel that in an environment that was very team-based and collaborative, that was not in our best interest to actually have stack ranking.

SESNODick Grote, how do you think they're doing from what you hear?

GROTEWell, I don't have a lot of information on how Adobe is doing but I certainly want to go back to the very first comment, Frank, that you read where the listener raised the question as comes up so often about subjectivity and the supervisor's opinion. And I think what that raises is a fundamental question...

SESNORight. He or she just doesn't like me, right. It's a personal thing.

GROTEYeah, well, let's take a look at the fundamental question, what is a performance appraisal? And the answer to that question is, a performance appraisal is a formal record of a supervisor's opinion of the quality of an employee's work. And right away that word opinion seems to vibrate in neon lights because people believe that if it's someone's opinion, then it's necessarily subjective.

GROTEAnd, Frank, every time I hear someone say that, I feel sad because what that says is that the person doesn't know what the word objective means, what it means to be objective. What it means to be objective is to be uninfluenced by emotions or personal prejudices. It means to base your opinion on facts and present those facts -- present the examples factually. It means to be fair. And so of course what we want our supervisors to be is to be fair in rendering their opinions.

SESNOBrian, what is the best way you have seen, as you look at how different companies do this, to be fair?

KROPPYou know, the -- a lot of interesting things are occurring. So Gore, for example, W. L. Gore the maker of Gore-Tex, what they actually do is really base their system on peer feedback. So in many cases they've almost taken the manager completely out of the evaluation. And it's a lot of feedback from all of the people that you work with. And what they do to help on the fairness question is they look for consistency of feedback from a variety of different people. So if you're getting feedback from 15, 20 other people, is it consistently positive, consistently negative, consistently in the middle?

KROPPAnd so some of their test of fairness is consistency...

SESNOMay I just stop and interrupt you for a minute?

KROPPYeah.

SESNOBecause I'm thinking at a level of practicality here because I'm thinking too of what Donna was saying about how many hours this consumed. Really, you're going to go out and get 15 or 20 people to weigh in on every single person in an organization? You're talking about a gigantic time-consuming task here that when people are so time crunched anyway because of what the workplace is now like, how does this get done?

KROPPWell, it gets back to the question of how much feedback are you getting from them, how frequently? So when you're getting quick bursts of feedback from them on an ongoing basis, the time investment is not going to be as much. And it's not going to feel as much. Where it feels like a big time investment is during performance review season you sit down and you spend an hour filling out this form, an hour filling out the next form.

KROPPAnd one of the things that's interesting that, I think, both Donna and Dick are alluding to is that the key to the feedback is how to make it as close to real time and in the moment as you can and not waiting. And when you wait it all piles up and becomes a huge mountain at that point.

SESNODonna, without a formal process, how do you decide in your company on things like a raise, promotions?

MORRISRight. so we've really spent time enabling our managers to be responsible for their team. So going to the point that Dick was making, you know, ultimately our managers are responsible for running their business, their business unit, their team. And we've invested in managerial training frankly as well as a support team, which we call the employee resource center, to make sure that they can understand how do they link pay for performance.

MORRISSo to net it out, managers are responsible for determining pay. In the past, a forced ranking process linked to a certain percentage depending upon where the person was in the pay range. And one could say that human resources, in many ways, was determining what people's pay was across the business. Because it was done in a very fashion that if I was ranked a certain level and I was paid in a certain category, then I was going to receive X percent.

MORRISToday in our approach what we say is, you're going to give feedback throughout the year. Your employee is tied to a position that is paid in the market --how is that being paid in the market? And that's one consideration. And the other is, how is that employee performing against their expectations, which you've been giving them feedback throughout the year. Once again, it shouldn't be a surprise. And, in fact, what we've seen is we've seen that voluntary attrition once again, people leaving on their own go down. And we've seen active performance management, people who might want to stay but frankly aren't performing trend upwards because of the discussions they're having.

SESNODick, a lot of what Donna is talking about here is training managers to be better managers.

MORRISRight.

GROTERight.

SESNOSo how does...

GROTEAnd that is one of the great needs that we have. And unfortunately too often the training that managers get about how to do a good job of managing people and how to manage performance and use the performance management tool is really counterproductive. For example, probably the most common piece of advice managers are given about how to structure a performance appraisal conversation is to use the feedback sandwich approach, to start with talking about a couple...

SESNOThe feedback sandwich.

GROTEFeedback sandwich, yes. To start by talking about a couple of good things and then segue over into needs for improvement. And then wrap up with a little plastic applause for some more good things the employee has done. Now that is a terrible way to structure a performance appraisal discussion. And I know from what Brian has said about the neuroscience research, what we need to teach managers is with a great majority of solid, good, excellent employees, focus exclusively on the positives. Build on strength. Ask how those strengths are going to be showing up in the future.

SESNOAnd don't even mention the negatives? Don't even mention the weaknesses?

GROTELet the employee bring it up. Don't you, as a supervisor, bring it up.

SESNOWhat if the employee doesn't...

GROTELet the...

SESNO...what if the employee doesn't want to bring it up or doesn't know it -- or doesn't know it?

GROTEIf he doesn't want to bring it up -- I don't think there's much loss because we're dealing with people who are excellent journeymen performers.

SESNOOkay.

GROTEBut with a few who are not meeting expectations -- just as Donna said, the go-- there are people who don't meet expectations. Don't use the feedback sandwich approach of a little good, some bad then wrap up with some good. Focus all of your attention in the performance review with letting the person know that immediate change must happen.

SESNOOkay. I'm Frank Sesno and you're listening to "The Diane Rehm Show." If you'd like to join this conversation about your annual performance review or observations you have about the process, please call us at 1-800-433-8850 or send us an email to drshow@wamu.org. We're quite anxious to get you involved in this conversation, and we'll do so in just a moment.

SESNOBrian, back to you for just a minute. You said earlier about setting expectations. We've heard a lot of different thoughts about that and this process in this conversation. Most people though are in a system that exists. And, from what you say from your research, they don't like it. What should they do? What can an employee do?

KROPPYou know, from the -- in the performance review process itself there's a variety of things that they can do. One, they can invest a lot of time in helping educate their managers about what they're actually doing. In today's world where managers -- after the financial crisis and all those sorts of things, the average manager is actually managing more people and spending less time with each direct report independently. So they have less insight into what the employee's doing.

KROPPSo one of the things employees must do is educate their managers about how they're spending their time, the impact that they're having, the benefit that they're creating for their organization, how they've helped other people to build that sort of awareness.

KROPPThe second part of it is if we think about the performance review not just as the evaluation of the employee, but have it be more of a career conversation than the performance review conversation. And it's a way to help with some of the positive and negative feedback to be able to say, because you're good at these things this is how we see the next year playing out for you. Or because you're not as good at these things, this is how we see the next year playing out for you.

SESNOI want to go to the phones. John joins us now from Charlottesville, Va. Hi, John.

JOHNHi. How are you?

SESNOVery well. Thanks for the call.

JOHNYes. I just want to make a couple comments on -- back to I think how the old performance reviews had been done. And one of the problems with the performance review is that you could write this beautiful performance review about yourself, send it to your manager, your manager agrees with it. But when that manager had to then talk about your year in front of the executive team, it all depends on how well they spoke of your year, how much knowledge they had.

JOHNAnd secondly, if they were able to defend their position very well. You could take two people who had equal performance and depending on how their manager was able to convey what that person had done, you could end up with two different performances for an equal type of performance. But...

SESNOAll right. Go ahead, you have a question quickly and I want to ask Brian to pick up on it. Otherwise I'll have him comment on your comment. Go ahead, Brian.

KROPPYeah, the manager calibration sessions -- so some companies will call them a talent review, variety of different names that go along with it, but just the time when the managers of all the employees get together and calibrate who's a higher performer or not -- it happens. There's some times that some managers are better advocates for their employees than others. They're more vocal, they're loud or whatever it might be. But this is where it comes down to having a great HR professional.

KROPPIf you think that, you now, ten years ago the role of the HR person was largely transactional, their job was to make sure that forms got filled out, those types of things. Today's modern HR professional has to be on equal footing with the line leaders and be able to say, these things don't square up. And it becomes dependent upon that high quality HR person to manage through those conversations.

SESNOWhat the role of the HR person, Donna? You're one, though not by that name anymore.

MORRISI agree with Brian. I mean, I look at our function and say ultimately we're responsible for the impact that people can make to the organization. And our role should really be helping to drive the alignment of the organization based on the strategy, the selection of the right talent, the development of the talent, the rewards. And then the mechanisms that really enable the business to succeed. And, you know, I would underscore in some of this discussion that every company needs to approach it with the lens of how do they really attract and retain and develop the talent that's going to drive their business needs.

MORRISIn our business, because we are so focused on intellectual property, and it's really the hearts and minds of our people that innovate great software, we need to provide an environment that really brings out the very best. And we've talked about strengths in this call. I think it's very, very important that the HR profession really takes a lens of what processes will really bring out the best in the people that work for a company.

SESNODick, very quickly, if I could, there are some who say the review process is merely to create a record so that if somebody needs to be fired they can be fired without legal action.

GROTEI have to say no, that really isn't true. It does have that function but it's a very, very minor function.

SESNOWhen we come back from break we're going to go back to your calls, more comments and questions to our panel on the annual performance review process. You're listening to "The Diane Rehm Show." I'm Frank Sesno. We'll be right back.

SESNOWelcome back to "The Diane Rehm Show." Diane's on vacation this week. I'm Frank Sesno sitting in for Diane. We're talking about the annual performance review process, sometimes more than once a year, with Donna Morris, she's senior vice president of people and places at Adobe, Dick Grote, president of Grote Consulting Corporation, and Brian Kropp, managing director at CEB's human resources practice. Lots of emails. Let me, again, throw some of these out and then we'll go back to the phones. You can call us 1-800-433-8850.

SESNOHere's one from Chris in Fort Worth, "I'm a police officer," he writes, "And our performance reviews are consistently graded by widgets, how many community contacts did one make, how many traffic stops. Our job goes well beyond widgets. How does one push from the lower rungs to get the intangibles rated with more value?" Here's another one from Kathleen in Alexandria, Va., "Do your guests have comments on teacher performance reviews? Present turbulent education environment," she writes, "Makes a stressful occupation more so."

SESNOAnd from Al in Indianapolis, "I personally look forward to receiving my reviews. Why? Because I get feedback both positive and negative." So a very mixed. Dick, you want to lead off?

GROTESure. There is a mixed bag, and let me take the first comment about evaluating in terms of widgets. There is such a thing as the myth of quantifiability. The myth that says that human performance can be quantified, and that's what we need to look at. We need find quantitative metrics to evaluate human performance. And that simply is not true. Human performance is a function of behavior and results. And we need to find ways of measuring both behavior and results. And if we limit ourselves just to those few things that are quantifiable, we're going to miss the great majority of the contributions an employee makes.

SESNODonna, how you do that at Adobe?

MORRISYeah, so we really believe that people -- they're overall success is shaped by feedback. And so once again, you know, ongoing, real-time feedback relative to performance is key. When I think of back to the teacher and the police officer, you know, really admirable roles that we need, ultimately the question for these individuals is if you're not going to get it from your manager, can you get it from the key individuals for which you interact. So if I'm a teacher, feedback from my students, feedback from the parents who are highly involved is likely really valuable.

MORRISSure, that might not trigger my pay, and certainly that might not, you know, contribute to my tenure as a teacher, but it will give me real-time lens in terms of how I'm performing. And, you know, fundamentally I believe people go to work to make an earning, but really to make an impact. And the approaches that I think we need to look at is people make the best impact when they know reinforcements around what is going well and what they need to improve on.

SESNOBrian, we heard from Al, I look forward to my reviews because I get feedback both positive and negative, but the other two were saying, wait a minute, there are a lot of intangibles here. So we want to have it both ways?

KROPPIn many ways, yes. And to what Donna was talking about in terms of the impact that you're having on others and how you can try to wrap your arms around some of that, we're actually seeing some really interesting things being done particularly in the retail space. So when you go to a different retail establishment, you've got the receipt and there's a fill out the survey at the end of it. What some companies are starting to do is take the information that's provided during that survey and using that to help fill out the performance review from a -- to try to quantify the intangible customer experience that's there.

SESNOHow do you quantify an intangible experience?

KROPPSo what will happen is that, if you go online and fill out that survey, then what some companies are doing is taking that data and using that, so the average score that you get from your customers during that manager shift will then be one of the inputs into that person's performance review. So you can -- it's not just about the number of widgets sold. It's a way to get feedback about the customer experience as part of that as well.

SESNOOkay. Let's go to the phones. And Zuka joins us now from Dunnellon, Fla. Hi, Zuka.

ZOEKAYeah, Zoeka.

SESNOZoeka. Sorry about that.

ZOEKAThat's okay.

SESNOYou can mark me down on my performance review.

ZOEKAAll right. I've been on the giving and the receiving end of these silly forms. But question, are there any thoughts on possibly adopting or reviewing what they do in the universities? For example, you have a performance review. The employee, faculty member, is responsible for, okay, here's what I've accomplished, you know, here's so many classes, here's so many articles and the like, here's what's in the fire right now this year and her are my goals for next year. And you discuss that with your department chairman. There are no forms to fill out. And, you know, after a few years everybody knows how you're doing. And the other thing is whether you're for or against tenure, that involves your peers.

SESNOOkay. Dick Grote, let me let you take a shot at this, whether the university environment provides any model.

GROTEWell, I think it certainly does. In terms of the collegial conversation you have about goals, about accomplishments, that should be intertwined in every performance appraisal discussion. The university handles it its way because of the unique university culture. Similarly, the companies like Adobe that have said, we're going a different direction with the performance appraisal and not using formal ratings and formal performance reviews. That reflects their culture. I think this is wonderful. As long as people know what's expected of them, they know how they're doing, they have the opportunity to get feedback, I think the performance appraisal system is working well.

SESNOAll right. Let me go to the phones again. And to Michael who joins from Ft. Myers, Fla. Hi, Michael.

MICHAELHello, good morning.

SESNOGood morning.

MICHAELThank you for taking my call, and good morning to your guests. I guess basically what I wanted to address quickly and have your guests comment on is the environment of the review itself. I've been on the giving and receiving end of reviews as well. And I guess I'm curious what your guests have to say about the environment in which the review is given and...

SESNOWhen you say -- when you say environment, what exactly are you...

MICHAEL...that plays on, like, the stress level of the review.

SESNOMichael, Michael?

MICHAELAnd I can take my comment or my answer off air. Thank you.

SESNOSure, sure, sure. Before you go away, Michael, if you're still there, when you say environment, what do you mean? You mean the room in which it happens? You mean the mood's that set? What exactly are you referring to? Oh, Michael's gone. Okay. So he went off-air. We'll imagine what he's talking about with environment.

MORRISYeah.

SESNOGo ahead, Brian.

KROPPThere's a sense of -- to make the performance experience as -- performance review experience as positive as possible, again, if we go back to the brain, we realize that we -- what we want to do is not put people in a fear state. When people are in a fear state, they don't react, they don't absorb, they don't take in the information.

SESNOSo should I not do this in my office anymore?

KROPPWell, you also shouldn't go to the other extreme which is, you know, at a nice cozy couch and, you know, where it's a relaxing environment to the extreme. But we need to realize is from an environment perspective, that if it's a situation where the manager is leaning back, putting his feet up on the table, sort of things, that creates a fear state in the minds of employees. And what we need to do to make it as valuable as possible is to put people in a reward state and have them mentally at least in a reward state. And that helps them absorb information more effectively.

KROPPAnd to the conversation that we had earlier about some of the manager training, it's not just manager training on how to fill out the form or what to say. But the environment does matter. The situation that you're in, the way it's built up to it and so on all matters. And it's about putting people in the right mental state to be able to absorb information.

SESNOJerry joins us now from St. Louis, Mo. Hi, Jerry.

JERRYHi. Thanks for taking my call.

SESNOThanks for calling.

JERRYIn 40 years of working in this area there are a couple of comments. One is I believe a manager's job is to do everything they can to make their employees successful. And that's a context that's often missing in this discussion. The second thing is there are other mechanisms, spot bonuses and organizational based incentives. I'm interested in what the panel has to say about that. Thank you.

SESNODonna, why don't you lead us off on that one. Thank you, Jerry.

MORRISSure. That sounds great. I agree. I mean, ultimately the manager's role is there to support the success of the individuals that work for that individual. And back to real-time feedback, real-time mechanisms, if somebody does an outstanding job, knowing what motivates that individual person is likely different than somebody else. And what we really try to do at Adobe is underscore the importance of building relationships with your respective team members.

MORRISKnowing that for one individual a day off is more important. For somebody else it might be, you know, flowers. Somebody else might really like a gift certificate. Knowing what triggers somebody's appreciation and recognition is very important. And really building relationship. The more you establish trust, the more that you're able and open to receiving feedback, both positive, but also constructive as well.

SESNOBrian Kropp.

KROPPYeah, the recognition part of it is really fascinating. When you look at it from a data perspective, the impact of -- assuming you're within a reasonable compensation range, the impact of a bonus or those sorts of things has a short-term impact on the engagement level of the employee. So they like it, but the -- how long it lasts in terms of improving people's and employees' engagement at their workforce doesn't last for years. It lasts for a couple months.

KROPPThe things that Donna's mentioning around recognition either publicly or privately from peers, those sorts of factors not only can generate the same impact on employees' engagement at their organization, but also lasts much longer. And being recognized in front of your peers can lift you for a year or more, and actually can be much more effective than some of the compensation strategies that are out there.

SESNODavid joins us no from Raleigh, N.C. Hi, David.

DAVIDGood morning.

SESNOGood morning.

DAVIDOne of the questions I had about one of your guests commented about the sandwich effect and count me among the managers that have been trained to use that. And I guess my -- I sort of hear conflicting comments, you know. Several of your guests are commenting that negative feedback or feedback itself is important to future success and to support the success. But then how do you convey negative feedback or areas for improvement if you're not going to use the sandwich effect and only highlight the things that employees are doing well?

SESNODick Grote, you want to respond to that since you talked about the sandwich effect.

GROTEWell, I sure do. I think what we know is that the sandwich effect -- the sandwich process of some good, then some bad, then some good is something that your best employees really hate because they go through the same drill every year and it's predictable. Your worst employees love that approach because as soon as they walk into the meeting, they hear some good stuff. As soon as they walk out of the meeting, they hear good stuff. And all that stuff in the middle is just noise.

GROTEBut I think one thing is genuinely important that explains why there is always such resistance to performance appraisal and why it always comes out at the bottom of every employee survey. And that is performance appraisal requires people to do something that from the time they were at mom's knee they were told not to do. And that is be judgmental. And we've all heard the mantra, don't be judgmental. But when someone takes a leadership job in an organization, that person is required to be judgmental, to say that Susie is better than Sam, but not as good as Sally. And that will always be awkward and uncomfortable.

MORRISFrank, can I actually add a perspective here?

SESNOYes, briefly if you would.

MORRISYou know, yeah, feedback is, you know, really a gift, and that might sound like a Hallmark advertisement, but the reality is I would contend that you improve more when you receive constructive feedback that illustrates areas with examples that you need to improve upon.

SESNOI'm Frank Sesno, and you're listening to "The Diane Rehm Show." If you have a question or a comment you'd like to contribute to our discussion about annual performance reviews, please call us in our minutes remaining at 1-800-433-8850, or send us an email at drshow@wamu.org.

SESNOBrian Kropp, I'd like you to address this. Let's get real practical here. If you're going to have a serious performance review process and it's going to be meaningful to both parties, you've got to have honesty. That's tough. You've got to have direct questioning. That's tough. You've got to be able to look somebody in the eye and say, here's what's not working and here's what is working. That's tough. If you take from all your body of work some examples of what the best evaluation process and questions and conversation is, what can you tell us?

KROPPYeah, the most important thing that we would say and CB would say is that you have to make it forward looking. You can't just have a conversation -- and it's hard to have a trust building conversation when you say, here's the things that you did bad. What you can do differently...

SESNOBut you're not going to omit that from the conversation.

KROPPYou're not going to omit it. You have to talk about it, but it's how you talk about it. So imagine...

SESNOSo give me an example.

KROPP...two scenarios.

SESNOI'm your employee. Go ahead.

KROPPYep. One example is we're sitting down. Well, here's what you did wrong in July of last year. Here's what you did wrong in September of last year. The other way -- and kind of the other way that that conversation could play out is here's what we expect out of you next July, across 2014, what do we think you're going to be able to do. And because here are the things that we've seen you demonstrate positively or negatively last year, here's where we think you're going to be successful in 2014 and here's where we think you're going to struggle.

KROPPSo let's focus on the things that we think you're going to struggle about in 2014 based upon your past experience. But it's a way to change the conversation from an evaluation of the past to using the information about the past to direct someone forward.

SESNOBut, Donna, help me with this here. If that employee that Brian's just talking about has been showing up late for work or has been turning assignments in past deadlines or has been gruff with colleagues or whatever it may be, where does that come into the conversation? Because those things actually did happen in the past.

MORRISRight.

SESNOThey have to be referenced, right?

MORRISRight. And ultimately you need to manage the expectations. So to your point that you're making, Frank, is if somebody has an ongoing pattern that they're not meeting expectations for both performance, but behavior, they need to know about it, and there needs to be a plan to improve that. Or frankly that individual might not meet the expectations of the business. And so, you know, I'll turn here and say, once again, feedback has to also be feedback that gives a very strong message to the employee around areas that they must improve to be successful. It's not just about the pattern...

SESNOAlbert joins us from Avondale, Va. Albert, go ahead with your question, please.

ALBERTThank you for taking my call. I just want to piggyback on some of the most recent comments and make one other. And that is that if a manager rates me as satisfactory, I need to know what I have to do to raise that satisfactory to very good, or to raise the very good to excellent. The manager can't tell me that there's a flaw in the procedure. And the second comment I wanted to make is that the performance review, whether it's annual or semiannual, should not -- cannot be the first time an employee hears about something that he or she has done wrong.

SESNOA very important point, an ongoing conversation, Brian.

KROPPMm-hmm. Yeah, absolutely. To the things about an employee showing up last for work, that sort of behavior shouldn't wait until the performance review to provide the feedback on. It should be provided in the moment. Because if it's not provided in the moment, it sets an expectation from that employee that that sort of behavior's okay. And then the behavior gets embedded within that employee. And then when other new employees see that, it just reinforce in the organization. The things that are just nonstarters have to be addressed when it happens and not waiting.

SESNOWe have about 90 seconds left. I'd like to ask each of you to provide a piece of advice as we wrap up here, either to an employee or an employer, as they go through whatever process they have in their organization to be more effective at getting or giving an evaluation. Donna, why don't you go first.

MORRISChecking is working at Adobe. Real-time feedback is what enables individual's success and company success.

SESNOReal-time feedback, so ongoing conversation?

MORRISOngoing dialogue.

SESNODick Grote.

GROTEThe senior leadership team of the organization has to model their expectations in excellence and performance management. It starts at the top. And when people see that the top cares about performance management, it will filter throughout the organization.

SESNOHow does the top reveal that?

GROTEThey do it in the same way that Bob Lane did the second day he was named CEO of John Deere. He got up in front of all of the employees at corporate headquarters, showed one slide that said 37,168. He said, that's the number of exempt employees we have at John Deere. By this time next year I expect every one of them to have an honest, straight between the eyes performance conversation with you.

SESNOOkay. Brian, ten seconds.

KROPPThe world is different now. It's more collaborative. It's more interconnected. It's more IP based. You need to have a performance review system that reflects what work looks like today.

SESNOTo our panel, to all who have experienced the annual performance review, thanks to you all very much. You're listening to "The Diane Rehm Show." I'm Frank Sesno. Have a great day.