One potential pandemic upside: Performance reviews are getting simpler
As the pandemic wore on this spring, Christine Carrillo, the chief executive of Butlr Health, a small online start-up that matches people with therapists, decided to postpone the remaining performance reviews scheduled for her employees this year -- and probably next year, too.
"The added pressure and unnecessary stress given to reviews right now with everything else -- it just feels like a waste of time," she said. Instead she meets with each of her seven employees biweekly for informal check-ins, Carrillo said.
Long the bane of employees and their managers, the pandemic has forced more companies to reevaluate their performance reviews, accelerating a trend toward more frequent feedback and greater focus on career development.
Some are postponing -- at least for now -- the time-consuming and cumbersome ritual of corporate America. Others are attempting to simplify the process as they weigh how to evaluate employees facing unprecedented upheaval and working from home until next summer -- or longer.
Carrillo says she's not sure she will ever bring back the formal review process. "I'm always an advocate for removing things if they don't work," she said. "If we don't have one next year and that goes well, we might not add it back."
But some experts worry employers aren't doing enough to change the way they evaluate employees at a time when many, particularly working parents -- and disproportionately mothers -- are facing mounting burdens.
"The pandemic has unleashed an enormous shock, but that's not getting reflected in the way so many companies are thinking about performance reviews," Marianne Cooper, a senior research scholar at the Stanford VMWare Women's Leadership Innovation Lab, said in an email.
Two recent surveys, while not comprehensive, provide a small snapshot into how some companies have reacted to the crisis. About 30 percent of companies said they adjusted their performance evaluations to account for challenges created by the coronavirus and 5 percent had put reviews on hold or canceled them, according to a survey of 317 employers by McKinsey & Co. and LeanIn.org. Another survey of 1,330 human resources officials, by Aon, a consulting and insurance firm, found 47 percent had made changes to their employees' performance goals or were considering them.
Several big tech companies did make changes this year to their performance evaluations.
For the first half of 2020, Facebook did not give out individual performance ratings and used a formula to calculate bonuses that were above the standard target -- but is returning to its typical process for the second half of the year. Google combined its usual two review periods into one this fall, and will rate employees against revised expectations. Box, the file-sharing service, says it is encouraging more regular feedback between employees and their managers and is also having just one formal review cycle this year, rather than two.
Companies such as Goldman Sachs, one of Wall Street's oldest and largest banks, say they are trying to make the review process more clear.
"The dynamics of today's challenges underscore the need for more transparency," CEO David Solomon wrote in a memo.
Managers will meet with employees three times a year, formalizing a process that was only encouraged before. The bank is also disclosing for the first time more about how performance ratings -- from "exceeds expectations" to "partially meets expectations" -- are distributed among employees.
In a year of Zoom meetings and work-from-home life adjustments, companies' traditional methods of observing employees' performance has been upended, and their evaluation process is laden with pandemic-era challenges.
But human resources experts also say there's a potential upside: Remote work naturally forces more scheduled check-ins between bosses and workers, which could have a lasting impact.
"If more people are working remotely, they will be checking in weekly with their managers and I think it could diminish the need for the annual performance review," said Brooke Green, who leads the employee rewards practice at Aon.
Some companies are focused on simplifying time-consuming evaluations, said Josh Bersin, a longtime human resources analyst. "The continuous refrain is the process we were doing before the pandemic was very bureaucratic. All those hours spent talking in conference rooms -- we don't have time for any of that," he said.
"For all the years I've been studying this, everyone has been trying to simplify performance management," Bersin said. "Now they're doing it because they have to."
After the coronavirus struck, human resources leaders at Anheuser-Busch InBev knew they wanted to streamline their individual reviews, a career development process that traditionally lasted six months and involved many time-consuming "calibration" meetings.
"Why are we spending so much time on a process where there's a lot of bureaucracy behind it?" said Marianela Comino, global director of talent management at AB InBev.
The company briefly considered postponing the reviews this year, Comino said, but decided not to after receiving a high response rate for its "360-degree" reviews -- in which workers are evaluated not only by their managers but peers and direct reports. It showed how much employees still wanted feedback, said Comino.
Anheuser-Busch InBev decided to focus on simplifying the process instead, which included shortening it to 2.5 months.
The changes, Comino said, will be permanent. "Everything we change will be for good," she said.
With many employees expected to continue working from home well after the pandemic ends, corporations may be left with a split workforce that will pose many unique challenges, human resource experts say.
Managers are more likely to positively acknowledge people who are in the office, while remote workers are more likely to get corrective feedback, said Brian Kropp, vice president of research at Gartner.
Companies must prevent this, he said, or "people that decide to come back and work from the office are going to be career advantaged compared to people who continue to work remote."
Twitter says it's already trying to guard against any unfair bias.
When it sent its 5,200 workers home in May, the tech giant suspended all reviews for the duration of 2020. The decision, according to human resources chief Jennifer Christie, was made after she heard from struggling parents who felt they could not keep up. Christie realized the pandemic created such divergent circumstances among employees that it would not be fair to compare their performance in a formal evaluation.
Since the company has announced a permanent work-from-home policy, Christie said Twitter is rethinking its entire performance review system so it will not be biased against people who spend more time outside the office.
"We want to create that parity with people who work from home, so that if you work from home, you're not a second-class citizen," Christie said.
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The Washington Post's Elizabeth Dwoskin contributed to this report.