Beacon Communities Says Death to the Performance Review

Sharlyn Lauby, President, ITM Group
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(Editors Note: Today’s post comes from Sharlyn Lauby of HR Bartender and ITM Group.)

Scores and numbers are the downfalls of the performance review process according to Jess Molson and Chris Salamanis from Beacon Communities. Their solution? “HR needs to let go of the scores.”

Boston-based Beacon Communities is a privately owned real estate firm that develops, acquires, invests in, and manages a wide range of multi-family housing. Glassdoor has recognized their CEO, Pam Goodman, as a “Top CEO” for the past two years. In business since 1946, the company employs over 1000 employees nationwide.

Performance reviews have long been on the proverbial death watch in organizations. High profile organizations like Accenture and General Electric have ditched the annual review in favor of more frequent feedback sessions. But saying that you’re getting rid of performance reviews and actually replacing them with something valuable is easier said than done. Molson and Salamanis said, when they decided to transition their existing process, they set three goals:

  • Develop a process that would actually improve employee performance
  • Create a process that would be more enjoyable for stakeholders
  • Make the process less administrative for human resources

Revamping the organization’s performance review process isn’t a one-size-fits-all solution. They realized their company culture and values were different from other organizations that have made the transition. More importantly, they realized that the performance within their organization was different.

  • High performance in one region wasn’t the same as in another.
  • Low performance in one region wasn’t the same as in another.

The organization knew that they needed to shift their performance review philosophy from “an event linked to pay increases” to a true development process.

A compensation-based event A development-focused process
·         One-way communication

·         Centered around performance counseling

·         About past performance

·         Two-way conversations

·         Centered on development and growth

·         About the future

Because employees are often at one of their construction or residential sites, they knew the process needed to have some flexibility. Ultimately, they created a quarterly process that allows employees and managers to connect with the organization in different ways. The conversations are themed to work preferences, job fit, stay interviews, and goal setting. To ensure that managers and employees enjoyed the process, Beacon’s HR department designed activities that engaged auditory, visual, and kinesthetic learning styles.

While Molson and Salamanis say their new system works because it’s not focused on scores and numbers, they did admit that the process does occasionally surface challenges. When managers and employees express negative feedback, Beacon’s HR team conducts a site visit to understand the root cause of the negativity and based on their assessment, suggests possible OD interventions such as team development, team building, or communication skills training.

Oh, and in case you’re wondering, Beacon still gives out regular merit increases. They use a quadrant approach similar to a 9-box that combines performance solutions and outcomes with pay increase guidelines. The HR department says it holds managers accountable for being able to justify their logic when it comes to pay increases.

If you want to learn more details about how Beacon transformed their performance review process, be sure to sign up for their webinar on How to Transform Performance Management to Fit the Modern Workforce on Thursday, May 31st at 2P EST / 1P CST / 11A CST.

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