Forget Performance Reviews — Why Recognition and Perks Are Taking Over

The long-held debate of performance reviews will always be a topic of discussion at board meetings, and the current sentiment about them doesn't quite paint the prettiest picture. Most research agrees that leaders and employees loathe the concept of performance management.

Whether it’s the delivery or the approach that needs changing, or the entire notion needs eradicating, it’s no question that performance management in 2022 has a low reputation. So, what’s the alternative? How can companies and organizations assess the growth and productivity of individual members? 

Embracing the changes in the industry, especially with the incoming generation, is the first step to progression — and it begins with addressing the status quo. 

Annual structured performance reviews are a thing of the past; instead, associations should develop a culture of constant feedback, learning, and growth. In addition, leadership should include recognition and perks in the performance management toolbox. 

Timing is also critical here. These reviews should not exclusively be centered on disciplinary action or annual promotions; instead, member recognition and feedback should occur continuously to increase engagement. 

Read on to dive into EXEC’s best alternatives to the dreaded performance review and how you can provide constructive feedback while cultivating a positive environment. 

The Fall of Performance Reviews 

A 2015 Harvard Business Review took a deep dive into the outcomes that large companies discovered when they shifted away from conventional, rating-based performance. They found several significant findings: 

• Enhanced Communication — Removing the structure of annual performance reviews, without a doubt, causes an increase in year-round communication between members and leadership. In addition, conversations surrounding member performance are much laxer, and the formal meetings are more frequent, quarterly rather than annually. 
• Less Administrative Burden — Performance reviews are a manager's worst nightmare after firing someone. Not only does it require a forest of documentation, but the time investment is never justifiable and rarely profitable. For example, Adobe estimates that its annual reviews require a time equivalence of 40 full-time jobs! 
• Shift in Conversation — The conventional performance review typically assesses an entire year's worth of productivity and is tied to salary. The shifted conversation is focused on in-the-moment feedback, growth, recognition, and mentorship — this increases member engagement and performance. 
• No One Size Fits All — One of the most critical downfalls of the standard performance review is that it fails to acknowledge that members cannot be grouped under a single umbrella. Some react better to constructive feedback, while others prefer positive feedback; the difference is in the approach and delivery, but the objective is always the same. 

Member Recognition 

When people believe they will be recognized by leadership, they are 2.7X more likely to be highly engaged. Therefore, acknowledging the efforts and productivity of a member is a critical tool for performance management. It builds confidence, enhances engagement, and cultivates a positive environment. 

Not only does continuous feedback and recognition promote growth, but it also prepares members for leadership roles in the organization. Encouraging others, mentorship, and coaching are critical responsibilities of management positions. 

With recognition, however, comes limits. For example, in larger organizations, not everyone can receive a bonus or a thank-you call from the CEO. This can be stressful to mitigate when an entire association vies for a finite amount of accolades, whether verbal or material. So, while creating a peer-to-peer spotlight program is an excellent tool, recognition is preferred to come from senior leadership. 

Perks and Benefits 

Every member of an association or company embraces recognition and praise differently. Company-wide perks as a reward for a new achievement are a great way to show your members that you appreciate them. Having these benefits also increases engagement,  productivity, and overall satisfaction.

• ClassPass — Allows users access to thousands of gyms, salons, and fitness studios, no matter where they are. 
• NET-A-PORTER — What better way to recognize a member’s efforts than with a shopping spree of their favorite designers? 
• Soothe — Gives users access to in-home beauty, wellness, skincare, and hair services.
  
  EXEC members receive benefits from the above partners. 

Conclusion 

Although it doesn’t paint a pretty picture, performance management is crucial to any association. It is best accomplished via individualized recognition, praise, and perks — ensuring the highest level of engagement, productivity, and in turn, revenue.