Why NZ companies should ditch 'dreaded' annual performance review

A new service, Human Innovation, is calling on businesses to take up the challenge of creating a truly innovative workforce model.

Melissa Jenner, founder of Start Now, who launched Human Innovation last month, says it enables organisations to work differently with their talent base to effectively co-design the roles of the future. It promises to create new value for the organisation and enable individuals to realise their full creativity and purpose.

"New Zealand organisations are evolving quickly in response to digital disruption, and embracing new ways of working, yet much more needs to be done to ensure they stay relevant," she says. "Now is the time to have a different and progressive conversation with employees about their future."

She believes that the relationship many employers have with their employees is closed off to opportunity creation.

"Statistics tell us globally that performance reviews are still the primary way employers are assessing insights about employees goals and aspirations, and only 11% of organisations are holding frequent goal setting and performance based conversations. Most are relying on annual performance reviews which are primarily a 'grading' conversation (39%). Most organisations still hire people into roles that are based on employees current competencies vs hiring people for their capabilities and aspirations. That's why people feel 'locked in' and unable to fully explore their full creative potential within the organisation, and are seeking outside help to find ways to do so.

"If companies can have a different 'dialogue' about aspirations, creative expression, and the impact employees want to have, they can then co-create pathways that fit both the company and the employees aspiration, resulting in the cost of losing talent and lost productivity being minimised."

You say that the old model of 'restructure and redundancy' is obsolete - but that is still the way many organisations operate - how do you go about changing their outlook?

"There are always times when restructuring and redundancy is the only option. But this is a bit of a blunt instrument and generally should only be used as a last resort, when other options to find ways to unlock new value from existing talent, have been expired. For example, if an organisation is moving a functional area to automation (such as a call centre that is moving its operations to a digital help desk), how might the management engage with employees early in the transformation process to find out what value the group could contribute? This transparency around change is perfectly within the restrictions of employment law, but does require a shift of thinking from management towards "doing things with people" vs "doing things to people". There is a tendency in some organisations to take a 'parent-child' mindset towards employees, instead of viewing the relationship as a partnership.

"New Zealand organisations are evolving quickly in response to digital disruption, and embracing new ways of working, yet much more needs to be done to ensure they stay relevant. Now is the time to have a different and progressive conversation with employees about their future."

Start Now's research shows that 57% of employees don't believe their creativity is being utilised by their current employer, and 61% of people think their employers aren't helping them to find options that will make it likely they will stay."

Jenner believes that people are disillusioned by not being able to create the jobs they want, and feel unsupported by their organisations. "It's time for a new age of dialogue, creativity and alignment where we can have adult conversations between founders and their employees to unlock creativity and foster a culture that embraces uncertainty."