A number of real estate management companies are looking at their performance reviews through a different lens.
The first two months of 2019 are now past, which means that for many companies, performance reviews have now been completed for the year. Often dreaded by managers and employees alike, the performance review process typically involves the resurrection and review of goals that were set 12 months ago and often found to no longer be meaningful or relevant. Employees are held accountable for how they performed based on an arbitrary numerical scale or forced ranking, and the allocation of rewards in the form of salary increases and bonuses are based on this rating.
More and more, companies are questioning the wisdom of this cumbersome, time-consuming process and are making, or already have made, a change. They no longer believe that traditional performance reviews are relevant to the way work is done in an era where jobs are increasingly complex, teamwork and collaboration take precedence over individual achievement, and businesses are moving so quickly. They’ve responded by changing their processes dramatically. Structured annual reviews have given way to more frequent and less formal one-on-one conversations that focus on feedback and coaching rather than rankings and compensation.
As Peter Cappelli and Ann Tavis wrote in Harvard Business Review in 2016, “With their heavy emphasis on financial rewards and punishments and their end-of-year structure, [formal performance reviews] hold people accountable for past behavior at the expense of improving current performance and grooming talent for the future, both of which are critical for organizations’ long-term survival. In contrast, regular conversations about performance and development change the focus to building the workforce your organization needs to be competitive both today and years from now.”
In Search of a Fresh Approach
A number of real estate management companies are taking these observations to heart and looking at their performance reviews through a different lens. The residential division of Lincoln Property Company is one such company that is in the midst of making a dramatic change.
|“The objective is to provide more transparency, more shared setting of goals and more acknowledgment of results, all through coaching conversations and questions.”|
-Krista Washbourne, Vice President of Learning and Talent Development at Lincoln property company, AMO
For most of its history, Lincoln has used a very traditional performance review system, according to Krista Washbourne, vice president of learning and talent development at Lincoln, with all associates expected to rate themselves according to a one-to-five scale and their supervisors rating them as well. Lincoln, an AMO Firm, is headquartered in Dallas with satellite regional offices throughout the United States. With such a large presence and regionalized offices, some regions diligently adhered to the annual performance review process, while others did not. Lincoln’s polling indicated that some of Lincoln’s associates didn’t receive a formal review, and most were cursory in nature and centered around a discussion of the raise. Those who did conduct and participate in the reviews found them valuable but insufficient. The conversations, held only once a year, weren’t enough for associates intent on growing with the company. They wanted more feedback, much more often.
In addition, the reviews looked back in time, without looking forward enough. Washbourne says, “Many associates couldn’t remember their goals from a year ago. Managers and supervisors overlooked follow-up meetings with their associates when objectives changed or positions grew and morphed based on owner demands or community needs.”
She adds, “And finally, the numbering system was perceived differently by almost everyone. Was a score of a ‘3’ good? Or just meeting expectations? Or was it actually equivalent to receiving a ‘C’ in school? No one was sure.”
Over the past few years, Lincoln has been transitioning with intention to an overall corporate culture based on coaching as a meaningful way to improve performance, and this transition called into question the rigid review process that had been in place. As it sought a better way of improving performance, the company looked at what other innovative companies were doing, from Google to GE to Adobe.
Interestingly, Adobe was a vanguard in changing performance review thinking. Adobe had used a traditional annual performance review process until 2012, when Donna Morris, a company executive charged with customer and employee experience, became frustrated with the taxing, stagnant process that was in place. This frustration laid the groundwork for what became known as the check-in, held several times throughout the year with minimal structure and no tracking or paperwork. “Individuals want to drive their own success,” Morris was quoted as saying of check-ins in Measure What Matters, by John Doerr. “They don’t want to wait till the end of the year to be graded. They want to know how they’re doing while they’re doing it and also what they need to do differently.”
Simple Questions Drive a Process Overhaul
This was the kind of thinking that propelled Lincoln on a nine-month-long information-gathering journey. According to Washbourne, the journey involved 53 roundtable discussions with associates throughout the country, including everyone from corporate executives to housekeepers and groundskeepers. The question asked of everyone: If you could design a review process, what would it look like?
The result is a new approach that will be rolled out at Lincoln starting in April. It will encompass informal quarterly check-ins and a more formal annual feedback session, all within a user-friendly, intuitive software platform accessible to all associates. The check-in and feedback sessions will center on forward-focused questions that propel associate growth and foster associate accountability. Says Washbourne, the objective is to provide “more transparency, more shared setting of goals and more acknowledgment of results, all through coaching conversations and questions.”
To support its coaching initiative, Lincoln assessed a number of software platforms, finally settling on a comprehensive employee management program that provides ready assistance with tracking check-ins, employee feedback that’s intuitive and easy to use, and reminders and recognition that can be efficiently sent and received.
“Having open and more frequent dialogue will keep associates focused on their long-term goals by setting and meeting short-term goals,” emphasizes Jene’ E. Cox, CPM, regional vice president in Lincoln’s southeast region. “When we reach certain goals and it’s recognized, it fuels motivation to continue to the bigger goals. It reminds us of our own capabilities of actually being able to ‘get it done.’”
What’s really exciting about all this, says Washbourne, is that “associates are being empowered, one of our core values.” The new process will open up avenues for associates to have conversations with their supervisors and discuss career paths and professional development opportunities and will “give them a voice. They will be able to direct their own learning and growth to drive their own careers, but with so much support.” With the software platform in place to support the enterprise, goals and accomplishments will be noted and a system of record will be in place.
“We also recognize that we do have underperformers,” acknowledges Washbourne. The purpose of this change is not to focus on underperformers, she explains. It’s really all about acknowledging and developing higher performers. But it also will provide a vehicle to address underperformance in a constructive way by identifying opportunities for performance coaching and performance improvement plans.
Preparing for Launch
With 4,000 associates at Lincoln who will be engaged in this program, the focus now is on the kick-off in April and the communication and training required for a successful launch, plus other future initiatives.
“Currently, Lincoln is focused on implementing a new recruiting, onboarding and succession plan to navigate the tight U.S. job market,” says Scott Wilder, CPM, executive vice president of residential management for Lincoln. “This shift to year-round performance management was an imperative one for retaining, coaching and supporting our associates’ long-term growth.”
No Bum RAP
Another company that has been in the forefront of innovation in performance reviews is RiverRock Real Estate Group, a privately owned AMO Firm that provides client-centric property and asset management services to commercial properties throughout California and Arizona.
|“RAP—Review, Analyze and Plan—sessions have been added to the review process —Two-way conversations between the employee and supervisor to discuss what went well since the last RAP session, what didn’t go as well as they would have liked and what goals are anticipated for the upcoming period.”|
-Kathy Valentine, Vice President of Human Resources, Riverrock Real Estate Group, AMO
At RiverRock, the formal annual performance review was discontinued a number of years ago, according to Kathy Valentine, vice president of human resources. In its place, the company adopted a more casual constant feedback platform. “This has worked well for most employees,” notes Valentine, “but we recently had feedback that some employees really wanted a more structured system. This feedback came mostly from our millennial workforce.”
In response, last year RiverRock made an adjustment to its approach that “hopefully isn’t too formal yet still meets the needs of those wanting something more structured.” RAP—Review, Analyze and Plan—sessions have been added to the process. Valentine describes these as “two-way conversations between the employee and supervisor to discuss what went well since the last RAP session, what didn’t go as well as they would have liked and what goals are anticipated for the upcoming period.” The RAP session is based on a one-page document that has just a few open-ended questions.
“I’ve found that typically employees who are at the beginning of their careers are those mostly looking for this type of structured feedback,” says Valentine, either because they are still unsure of what is expected of them or they don’t feel comfortable asking. More established employees find general conversations with their supervisors are sufficient.
This adjustment to the process has been generally accepted and appreciated by the RiverRock team and has improved communications throughout the organization. “Some supervisors have even commented that they had no idea about some of their employees’ future goals, so this has helped with future succession planning,” offers Valentine. “For those employees who are looking to advance their careers, it gives them a clear path to what new skills and background are required.”
This is reinforced by John Combs, CPM, founder and principal of RiverRock. “We believe that constant feedback is required in both supporting great performance as well as identifying what should be improved or strengthened,” notes Combs. “What we find is that today’s environment is supercharged, and having a RAP session is essential to quality feedback for the ‘rock star’ and the supervisor. We started this last year and everyone was so pleased with the results. I think this will be evident in our Best Company to Work For [in Orange County, named by Orange County Business Journal] survey results which we have won the past nine years we have entered.”
Opportunity as the New Currency
As for the connection of these ongoing, ratingless feedback sessions to bonuses or other financial benefits: There is none at Lincoln or RiverRock. “Coaching is separate from compensation,” notes Lincoln’s Washbourne, who sees the focus on professional development rather than monetary rewards. The same is true at RiverRock, where the RAP sessions are conducted with the goal of offering constructive feedback and discussing opportunities for advancement rather than compensation.
Ultimately, each company must discover the best approach that supports its culture and strategy, be open to modifications when warranted, and frequently and clearly communicate to everyone on the team how the system will work, how they will be impacted, and how it will advance both their individuals’ and the company’s success.