Episode Summary: "How To Do Performance Reviews That Build Trust | Ep 300"
In Episode 300 of "Build with Leila Hormozi," host Leila Hormozi delves deep into the art of conducting performance reviews that foster trust and drive growth within teams. Drawing from a decade of experience at Acquisition.com, Leila shares invaluable lessons on delivering feedback effectively, ensuring that performance evaluations become a cornerstone for personal and organizational development rather than a source of anxiety and defensiveness.
Introduction: The Power of Constructive Feedback
Leila begins the episode by emphasizing the critical role of feedback in leadership. She underscores her belief that "the number one skill that you can acquire as a leader... is to give feedback in a way that makes people feel better, not worse" (00:02). Her journey from struggling with ineffective feedback methods to mastering constructive performance reviews sets the stage for the insights she imparts throughout the episode.
Lesson 1: Ensure No Surprises in Performance Reviews
Avoiding Unexpected Feedback
Leila highlights the importance of "nothing should ever be a surprise" during performance reviews (05:30). She recounts her initial challenges where team members were blindsided by feedback they hadn't been previously informed about, leading to confusion and mistrust. By consistently communicating feedback in real-time rather than bottling it up for formal reviews, leaders can prevent negative surprises that erode trust.
Notable Quote:
"If you do performance reviews in a way that's negative... it erodes trust because they're like, 'you haven't been telling me the truth about where I stand with you or my performance for how long now.'” (05:30)
Transitioning from Event to Conversation
Instead of treating performance reviews as a daunting event, Leila advocates for "treating it as a conversation" (10:45). This approach makes the review process more personal and collaborative, allowing for a holistic discussion about both strengths and areas for improvement.
Lesson 2: Anchor Feedback to Individual Goals
Linking Feedback to Personal Ambitions
Leila introduces the concept of anchoring feedback to the employee's personal goals (15:20). By aligning feedback with what individuals aspire to achieve, critiques become perceived as supportive rather than critical.
Notable Quote:
"If you anchor it to their goals that they have shared with you, it feels like help, not criticism." (17:00)
Building Trust Through Shared Objectives
This method not only makes feedback more palatable but also strengthens the leader-employee relationship. Employees recognize that their leaders are invested in their personal success, fostering a sense of mutual respect and collaboration.
Lesson 3: Focus on One Improvement Area at a Time
Prioritizing Key Areas for Growth
Leila emphasizes the importance of "focusing on one thing at a time" during performance reviews (22:10). Overloading employees with multiple areas for improvement can lead to overwhelm and stagnation. Instead, identifying and addressing the most impactful area can lead to significant progress.
Notable Quote:
"Humans can't change 10 things at once. They can barely change one." (23:05)
Implementing the Theory of Constraints
Drawing from the Theory of Constraints, Leila advises leaders to pinpoint the most critical constraint impeding performance and address it first. This strategic focus ensures that efforts yield the highest return on investment for both the individual and the organization.
Lesson 4: Empower Employees to Craft Their Improvement Plans
Encouraging Ownership of Growth
Perhaps the most transformative lesson Leila shares is the practice of having employees articulate their own improvement strategies (28:15). By guiding them to identify solutions, leaders foster autonomy and critical thinking, essential skills for long-term success.
Notable Quote:
"You develop people by asking them questions and getting them to fucking think." (30:45)
Moving from Passive Reception to Active Engagement
This approach shifts the role of the employee from a passive recipient of feedback to an active participant in their development. It cultivates a growth mindset and ensures that improvements are tailored to individual strengths and aspirations.
Additional Insights and Nuggets
Reinforce Strengths to Foster Growth
Leila reiterates the significance of reinforcing what employees do well, stating that "people grow fastest when they feel safe, they feel appreciated" (35:10). Acknowledging strengths builds confidence and creates a positive foundation for addressing areas of improvement.
Take Time and Do Not Rush Reviews
She advises leaders to allocate sufficient time for performance reviews, recommending buffers between sessions to maintain focus and avoid feeling rushed (40:00). This ensures that each discussion is meaningful and that leaders can give their full attention to each employee.
Notable Quote:
"Don't schedule these back to back. Put them with 30 minutes in between so that you can refocus." (40:00)
End with Optimism to Reinforce Belief
Concluding performance reviews on an optimistic note reinforces the leader's belief in the employee's potential. Leila encourages ending conversations by "reminding them of why you believe in them" and highlighting their contributions and strengths (45:30).
Conclusion: Building a Trust-Based Performance Culture
Leila wraps up the episode by summarizing the four core lessons:
- Nothing should ever be a surprise: Maintain consistent, real-time feedback to build trust.
- Anchor feedback to their goals: Align critiques with personal and professional aspirations to make feedback supportive.
- Focus on one thing at a time: Prioritize key areas for improvement to avoid overwhelm and ensure progress.
- Have them tell you how they will improve: Empower employees to take ownership of their growth plans, fostering autonomy and critical thinking.
She emphasizes that "if you do this consistently, you will not only build a stronger team, you will build people who feel proud of what they're becoming and who they're becoming" (50:00). This approach transforms performance reviews from dreaded evaluations into empowering conversations that enhance both individual and organizational growth.
Leila concludes by encouraging listeners to share these insights with other leaders seeking to refine their performance review processes, reinforcing the episode's collaborative and growth-oriented spirit.
This summary encapsulates the key discussions, insights, and actionable strategies presented by Leila Hormozi in Episode 300 of "Build with Leila Hormozi." By implementing these lessons, leaders can transform their performance reviews into powerful tools for building trust and driving team success.