Thinking Outside the Box:  Replacing Performance Appraisals

I had a fascinating interview today with Ken Barry, SVP Human Resources of Homestore Inc.   Homestore has replaced performance appraisals with Five Conversations.  As a result of the move to a conversational organization, Homestore has created a focus on performance improvement, ongoing open communication and accountability and self-responsibility for performance.  This process has resulted in an increased focus on performance, with mention of the Five Conversations often being woven into all related conversations.  An important element of the success at Homestore is the training given to all employees to prepare them to participate in all of these conversations, including learning how to give and receive feedback effectively.  When a manager and employee discuss performance, they not only address the ways an employee can improve performance, but also how the manager can help the employee do so.  In turn, the conversation is then reversed with the employee providing the manager with similar feedback. 

Sometimes, we get so used to our existing processes; we focus too much on improving what exists.  In this case, Homestore began with a conversation about what the business needs related to performance were.  Building upon this need, Homestore created a system that addresses those needs, without needing to be limited by the constraints of systems that existed in the past.  I encourage you to access this Reality HR Interview either through the archived webcast, or through the written transcript.  It is a story that definitely got me thinking outside the box, for after all, it is the outcome that we are aiming for, regardless of the process.