The Dreaded Annual Review
Is it management or manipulation?
Despite Aristotle's notion that a metaphor is the one thing that cannot be learnt for others (Poetics 1459a 8,) I will traverse that crocodile infested pond with one to make a point about leadership and the annual review.
Imagine your favorite CEO of some Fortune 500 company. If you are one that thinks climate change is an existential threat to our world and the DEI policies, well fashioned into the corporate ethos and monitored under the watchful eye of an ESG financial guru like Larry Fink of BlackRock is the cat’s meow, select any number of tech or banking CEOs. If anti-woke is your thing, pick a CEO from any of Peter Thiel's back companies. For this story, the company doesn’t matter, only the title, CEO.
Mr. CEO is invited to be the keynote speaker at an industry specific conference. The conference flies him and his spouse first class to their destination. Upon his arrival at the airport, a well-dressed man holding an iPad with Mr. Bigshot CEO’s name on it greets the couple at the airport. The chauffeur grabs his special guests’ luggage and quickly whisks them off to a private exit and into a polished black Cadillac Escalade. Bottles of water are on ice and the Wall Street Journal lies neatly folded and untouched on the back seat. The driver weaves through snarled traffic and delivers our executive to the Ritz Carlton Hotel.
After the chauffeur talks to the bell captain, bags are silently loaded onto a cart and hauled away. Our hero enters the hotel lobby where a professionally dressed young associate immediately stands to greet the CEO and his wife by name. Small pleasantries are exchanged, the young associate explains that they are already checked into their room and the bell men is delivering their belongings straight away. Handing the room keys to the CEO, the associate informs him that the bell hop tip has been covered. The associate then wishes them a pleasant stay and reminds Mr. Keynote and wife that the car will return at 7:00 pm to pick them up for dinner. They will be dining with a cadre of other industry ambassadors this evening at Chez Foo Foo where celebrity chef Foo Foo himself will personally greet the table and magically bounce Himalayan salt off his elbow on to a perfectly cooked tomahawk ribeye.
The next morning, breakfast is prepared and delivered to the CEO’s rooftop suite. Mrs. CEO has a four-hour Ritz Carlton spa day arranged for her replete with champagne, chocolate dipped strawberries and balcony seating overlooking the city for lunch. At 8 AM sharp the chauffeur returns to the hotel for Mr. Keynote. Despite the rain the previous evening, the Cadillac arrives polished and water-spot free. While awaiting his keynote address in the green room, the young associate hands the CEO a cup of coffee in a ceramic mug.
The talk kicks off at 9 AM without a hitch and concludes 45 minutes later. The CEO shakes many hands and then prepares to attend the lunch where he holds court with the dignitaries not worthy enough for last night’s ambassador dinner. After lunch, the car returns to deliver the exhausted CEO back to his room and to his spa subdued wife. The two rest for the afternoon before heading out on the town for dinner and a show.
The following morning, the chauffeur arrives at exactly 9 AM to drive Mr. and Mrs. CEO to the airport and to their first class return flight.
Five years have passed. Mr. CEO has since retired, but not after making sure his hand-picked protégé continued the award winning maneuvers he put in place. In fact, our retired CEO was so innovative, he has written a book about how he led Company XZY to great prosperity. He has been invited back to the same industry conference to speak, not as the keynote this time, but as a speaker in one of the filler segments of the conference. This time, he is there to talk about his book.
But now his travel is on his own dime. His airline passage was upgraded to business class using stored credit card points. No first class was available on this flight for our speaker. Mrs. CEO does not accompany him on this business trip. Alone and at his destination, he gathered his bags and a heavy box of personality signed copies of his book. Mr. Ex-CEO waits his turn at the taxi stand and pays $50.00 for the half hour ride to his non-descript mid-town hotel. After waiting in a long line of other business travelers to check into his two-bed room, he lugs his own bags to the room overlooking the all-night blinking neon light for Joe’s Original Fabulous Pizza House. The hour is late, and he has yet had dinner. Exhausted, our Ex-CEO turn author, crosses the street check out Joe’s Pizza. He finds a spot at the bar, orders a deep dish and a beer. Joe’s is crowded, noisy and smells of stale beer and oregano.
After a somewhat unrestful night, Mr. Ex-CEO gets dressed, loads the boxes of books on a cart and heads to the lobby for a quick breakfast and a cab to the conference. Another $40 cab ride 15 minutes to the conference center and schlepping a 50 pound box of books later he arrives to the green room. He sees the familiar associate who assisted five years ago and asks for a cup of coffee. The busy, not as young and perky, conference manager shrugs and without saying a word points to the coffee station against the wall. As our newly minted author awaits his turn to take the stage, he pours coffee into a paper cup and takes a seat to review his notes for his upcoming talk about innovation and leadership.
Now, if this leader had any intuition at all, he would scrap his opening salvo and walk on stage with his paper cup of coffee in hand and explain that respect for leadership is inherent in a title but earned by the individual. The deference shown to a president, a CEO or a manager is owed the authority of the title and often has very little to do with the individual’s character or merit. How does a leader transcend the moniker to manage his team truly and effectively? How does he earn the trust of those he manages so that he can facilitate the annual rite of passage, the dreaded annual review with honesty and integrity?
This has long been a sticky subject for me. In our open, "touchy-feely," hypersensitive, new-age work environment, managers are encouraged to delve into the personal space of their employees, especially during the annual review. The innocuous version of these talks helps the managers understand what really makes the employee tick and what their short-term and long-term goals are so that they may help map out how career trajectory that benefits both company and employee. However, there is a far more sinister application of personal information if the manager allowed into the private desires of an employee has ill intent.
This brings to mind what I have read about cults. The first thing these sinister organizations do is get their victims to confess their moral shortcomings and discuss their deepest desires. Armed with that information, they now have the perfect blueprint for manipulating that individual. If the employee is working for moral company with a management staff that is well trained and understands how to utilize company resources and career paths to fulfill its employees, sharing of the personal information during an annual review can have benefit to both the individual employee and the company because it can create mutual "win-win" scenarios. However, if neither manager nor corporation has moral intent, the reviewing of personal information that an annual review can serve as tremendous fodder for manipulation. “Oh,” says the manager, “you don't want to work extra hours this weekend. Remember, you said you had your eye on buying a lake home someday. Maybe you should keep your eye on the big picture.” Preforming a meaningful annual review is all about creating safety between an employee and manager.
The new buzzword in the corporate world for creating this environment is “psychological safety.” How does an organization and its management craft a safe environment where the sharing of personal information with a superior stay within the bounds of trust? Fear can stymie an organization; fear is the enemy of flourishing. How does leadership create “the fearless organization?”
Amy C. Edmondson's 2019 book, The Fearless Organization, tackles this very institutional problem. As reported in Ms. Edmondson’s book:
…a 2017 Gallup poll found that only 3 in 10 employees strongly agree with the statement that their opinions count at work. Gallop calculated that by “moving that ratio to six in 10 employees, organizations could realize a 27 percent reduction in turnover, a 40 percent reduction in safety incidents and a 12 percent increase in productivity.” That’s why it is not enough for organizations to simply hire talent. If leaders want to unleash individual and collective talent, they must foster a psychologically safe climate where employees feel free to contribute ideas, share information and report mistakes. Imagine what could be accomplished if the norm became one where employees felt their opinions counted in the workplace.
Nowhere does the concept of creating a psychologically safe work environment become more important than when preforming the annual review. For it is in this personal, one on one exchange, that any missteps in trust between manager and employee can be devastating. Critical review of employee performance is crucial, however if there is no trust in the individual delivering the report, the news will have a deleterious effect. The employee, if such an untrusted exchange does not get them to polish their resume, will retreat to the safety of their core job. They will study the handbook, the job description and the directives and stay precisely within the lines of compliance. They will spend their time documenting their work and impact on the company, preparing for some future and inevitable inquisition instead of spending energy and skill advancing company objectives. And nothing kills innovation and job satisfaction more than these walls built out of fear brought on by the power a supervisor has over one’s livelihood and job satisfaction.
If the fictional CEO you imagined in my opening metaphor was truly a leader, he would have talked about how Company XYZ fostered an open and trustworthy organization. He would have proven how creating and psychologically safe work environment propelled his company past the competition. He would have explained how he built a fearless organization that created a win-win-win scenario for the company, employees, and customers. Finally, he would have humbly understood that all the comfort and special attention lavished upon him as the keynote speaker was out of respect for his title and not a reflection of him as an individual.
Because, in the 21st century, no other fearful type of organization will long endure…