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Yahoo’s decision to abandon twice-yearly traditional performance reviews in favor of ongoing, manager-led check-ins is paying off, Chief People Officer Lisa Moore has said.
Speaking to Fortune, the HR executive discussed the decision to move away from biannual evaluations in 2022, citing their tendency to frustrate employees, managers, and HR alike.
The business has instead moved toward “continuous check-ins,” which Moore described as a more ‘adult approach’ to performance reviews.
“At the end of the day, we’re grownups. We should be able to operate like grownups, without being told and spoon-fed exactly what to do,” she stated.
Why did Yahoo ditch traditional performance reviews?
According to Moore, the formal biannual performance reviews were causing employee frustration and disengagement—particularly when workers asked for things during the meetings that managers couldn’t deliver, or when managers delivered bad news during the “big emotive moments.”
“There’s this huge sense of anticipation that ends in deflation,” Moore said. “Most folks are not getting what they want. They’re not getting a leading rating; they’re not getting a super stretch bonus or pay increase.”
The CPO also noted that the traditional approach often meant key behavioral or performance issues were left unaddressed until the two meetings. In some cases, this allowed bad conduct to go unchecked; in others, it meant employees were unaware their performance wasn’t up to scratch and weren’t allowed the opportunity to improve.
“Nobody should have a surprise at the end of the year,” she added. “It’s troublesome when somebody’s being told they’re not performing at the end of the year, and they haven’t heard that throughout the year.”
Yahoo encourages people managers to run “continuous check-ins”
To address these issues through more “regular” conversations, the web services company has shifted to a model Moore dubbed “continuous check-ins.”
Yahoo’s 1,029 people managers are now allowed to establish their own cadence of check-ins with employees, an approach which means they can “highlight where things are going off track” in a more casual way.
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Moore said Yahoo is trying to encourage shared ownership over performance management and development between employees and their managers, with transparency over both employee career goals and business needs.
Technically, there are no minimum meetings required, but there are some basic unwritten rules in place. “We do expect people to be accountable for the role they play, including as a manager. It’s not okay to never meet with your folks,” Moore clarified. “We don’t want that. We want people to be taking that responsibility seriously.”
To keep people managers accountable, Yahoo has also implemented an HR bot that sends out surveys twice a year to employees. The survey asks whether employees have recently had a check-in with their manager and if it was useful in helping them do their job better.
The responses are fed into a tool that determines whether there is a potential misalignment between employee and manager. If a disconnect exists, it will inform Yahoo’s HR team, who can then monitor the situation directly and intervene if necessary.
Yahoo has also set up twice-yearly “roundtable” meetings between managers to discuss their employees, ongoing workforce issues, and any possible promotions within their teams.
Moore told Fortune that the new approach to performance management has been “a hit” with employees, who value flexibility and transparency alongside a platform to highlight concerns about work and career goals.
Employers shift away from traditional performance management
Like Yahoo, other employers have made concerted attempts to move away from traditional performance management models in recent years.
Pharmaceutical giant AstraZeneca is one such business, who shifted away from performance management toward performance development in 2020.
Four years on, the new and improved performance development approach has improved the abilities of its managers to successful mentor and support their direct reports, while employees report better relationships with their managers.
According to figures shared with HR Grapevine earlier this year, 85% of employees now receive regular coaching. Over four years the business has seen a 12% increase in core coaching capabilities and a 70% increase in confidence from managers in their ability to hold meaningful coaching conversations.
Rebekah Martin, SVP of Reward, Inclusion, and Talent Acquisition, said the old end-of-year review simply was not working for the business. “Employees were really dissatisfied with it. Managers didn't like it either,” she explained. “Instead of having this end-of-year review and then a goal-setting process, we wanted to have something focused on a coaching approach and looking at feedforward, not feedback.”
Martin noted that the new model, rooted in continuous coaching, has driven a change in the approach of AstraZeneca’s people managers. Like Yahoo, conversations have shifted away from one-dimensional conversations where an employee was given a performance score and told how it would (negatively or positively) impact their reward.
“In the past, managers had been relying on the number and communicating that with a little bit of flavour around it,” Martin added. “Now we have managers invested in taking the time to understand what employees found difficult and what they want to build on in the following quarter or year.”
The SVP said AstraZeneca’s investment in coaching was key to making this new approach to performance successful.
