Performance Reviews are a Batch Process
In Lean companies, we talk frequently about how batching is bad and flow is good. And yet, nearly every company batches its performance reviews into an annual evaluation.
The irony is thick. Those very evaluations—the ones containing 365 days of observations—may critique a Lean leader on how well he was able to reduce lot sizes.
The problem with an annual evaluation is that there is no chance for an employee to correct course along the way. Plus the quality can be horrible. The events of later in the year—the ones freshest in memory—carry more weight than the ones that happened right after the previous annual review. Specific data can be hard to determine after the fact. And some observations may just be downright wrong, but they happened so long ago there is no chance to clarify what was going on.
Of course, just like in a flow production system, a flow evaluation system takes work and infrastructure to set up and commitment to maintain. I challenge you to try to break this model of the annual review, and give team members feedback in smaller lots—semi-annually, quarterly, monthly, or even daily.
Now, I’m a realist. I really don’t think most managers have the clout to completely overhaul a corporate system. They are unlikely to eliminate the requirement to deliver an annual review to their employees. But they certainly have the power to change the processes they use along the way.
This is one of the chances a manager has to really ‘walk the talk’ about Lean.
7 Comments
Mark Graban · April 26, 2010 at 6:32 am
There’s more companies than you’d imagine that have scrapped the annual review to do what Dr. Deming called for — continuous leadership and education.
Take Nick’s Pizza and Pub for example:
http://www.leanblog.org/2010/04/lessons-from-a-%E2%80%9Clike-lean%E2%80%9D-millionaire/
Jeff Hajek · April 26, 2010 at 11:13 am
Mark,
Nice article.
It’s always fun to hear about people who are Lean and don’t even realize it.
It also points back to the stats that show great places to work are more profitable. The companies that show up on Fortune Magazine’s Best Places to Work significantly outperform the stock market–being good to employees is good for business.
Thanks for the comment.
Jeff
Kelley Dodd · April 23, 2010 at 12:02 pm
Great lean blog. I admire your standard work approach to daily posting!
Jeff Hajek · April 25, 2010 at 8:37 am
Kelley,
Thanks for the comment. It’s always nice to get a compliment. Even nicer when it is for doing something that you love.
Regards,
Jeff
Tim McMahon · April 23, 2010 at 10:27 am
Many business processes are batch. Accouting processes monthly, rewards and recognitoin sometimes, budgets, forecasts, goal setting, and of course performance reviews. Need change this thinking so we don’t have arbitrary timelines and agendas.
Jeff Hajek · April 25, 2010 at 8:40 am
Tim,
Absolutely correct. The challenge is always breaking down the barriers and paradigms that promote batching. A topic on a recent forum was about Lean and dishwashers. Dishwashers promote batching behavior, as does the whole concept of meal times. But design a better dishwasher or stagger lunchtime, and flow can develop.
Same is true of business processes.
Always good to hear from you, Tim.
Jeff
Il meglio della blogosfera lean #36 — Encob Blog · April 30, 2010 at 11:33 pm
[…] Performance Reviews are a Batch Process dal blog Gotta Go Lean di Jeff Hajek: I riesami annuali della direzione sono veramente utili per l’organizzazione? Raccolgono tutti i dati in tempo reale e li presentano con le soluzioni ai problemi riscontrati? Oppure sono solo uno spreco? Forse dovrebbero essere fatte semestralmente, mensilmente, settimanalmente o anche giornalmente per scoprire il vero andamento della vostra organizzazione? (traduzione automatica) […]