057 – Performance Reviews For Insurance Agencies: Instruments Of Operational Excellence

PERFORMANCE REVIEWS FOR INSURANCE AGENCIES: INSTRUMENTS OF OPERATIONAL EXCELLENCE – EPISODE 057

In this episode of The Digital Broker, Ryan Deeds and Melissa Wilder examine performance reviews and how they are administered at insurance agencies. By listening to this episode, you will learn:

  • Why so many performance reviews are terrible, and how they came to be that way
  • How performance reviews done wrong aren’t just inefficient but hurt your agency
  • What a performance review is supposed to do and how you can do it down to the questions that you should ask
  • Whether you’re better off administering several performance reviews throughout the year instead of a single annual one

“Ulcer.” “Root canal.” “Some of the worst days I’ve ever had.”

Those are only some of the immediate reactions to the mere mention of the term “performance review” on this episode. Our hosts aren’t being overly cynical: performance reviews have a terrible reputation among countless employees who see them as something to fear and dread—confrontations with the agency better run away from than into.

You probably think you know where we’re going with this: let’s abolish performance reviews and turn the workplace into some sort of commune where employees get to do whatever they want, free from supervision. Wrong. We like performance reviews, and we wish they were done more often. Performance reviews are a critical instrument of operational excellence. When performance reviews are done right, employees who are crushing are motivated to keep doing so, employees who are struggling get the help they need, and employees who are hurting the agency are, well, let go.

When performance reviews are done wrong, none of those things happen. Adversarial performance reviews dissuade good employees from being awesome, infrequent performance reviews don’t help out anybody when they need it, and complex performance reviews enable problem employees to get away with their behavior undetected.

To retool the performance review into an instrument of operational excellence, we need to take a closer look at what is wrong with so many performance reviews in the first place. Bad performance reviews tend to be:

Rare. Performance reviews require time, and managers are frequently pressed for it—so they put them off until they become a yearly thing, if that. At many agencies, this is considered acceptable. At the same time, we tell producers not to check in with clients only once a year. Something is wrong with this picture.

Once-a-year performance reviews reek of mere formality, making employees feel undervalued and forgotten; good luck trying to get the best out of them. When the performance review does come around, the pressure to make up for a year of estrangement stresses out employee and manager alike. The worst of it is that once-a-year reviews bias the manager in favor of what happened recently because that’s easiest to remember when there’s nothing else to go on. An employee might have had a great six months and then slumped for the remaining six due to any number of reasons, including managerial noninvolvement. But a manager who wasn’t paying attention is going to miss all of that and reduce an employee’s worth to just what happened in the last three months.

Antagonistic. This is a holdover from a time when employees were thought to be bitter and unhappy by default, secretly conspiring to get over on the company. Heading into a performance review with this attitude of suspicion is a self-fulfilling prophecy. Manager and employee will confront each other adversarially as if they’re on opposing teams instead of members of the same team with a shared interest in each other’s success.

This approach is terrible for both the agency and the employee, but generally, it is the employee who suffers the worst of it. Only the lowlights will be discussed: why haven’t you done this, why aren’t you doing that, etc. Single data points are judged in isolation and in the most negative light available: a person who’s behind on work can only be lazy and unaccountable—never mind that the most enthusiastic and dependable employees often fall behind because they take on or inherit so many projects. The employee leaves the performance review feeling shamed, attacked, and miserable. The result is tension, bitterness, and drama—toxic ingredients of operational friction.

Complex. To make up for their infrequency, rare performance reviews are padded with a surplus of content, ending in a review that wears out employee and manager alike, achieving nothing except to take employees away from more important work. Remember: a key function of performance reviews is to help you identify and deal with problem employees. Every employee is capable of doing something disagreeable once in a while, but when someone is repeatedly getting into the way of your agency, certain behaviors become apparent. Punching the clock without giving a damn, avoiding work in an almost conspicuous manner, producing lame excuses when confronted about it, being nowhere to be found when the agency needs everyone, promising to help and then disappearing, taking credit for things not achieved or even worked on… A long-winded and verbose performance review hides these behaviors from management, allowing problem employees to quietly keep hurting the company.

If rareness, antagonism, and complexity destroy a performance review, their opposites must revitalize it. This is exactly the case. Performance reviews work best when they are:

Frequent. Progress is incremental, but employees aren’t snails who inch forward only once a year. People require motivation, stimulation, and validation on a monthly, sometimes a weekly basis. When you check in on the regular, you hold employees accountable, show them you care, and keep them from forgetting what they’re supposed to do. This becomes a two-way street: employees will keep things in mind to bring to your attention when they know they get to talk to you in a week or two. This expands your insight into operations and allows you to make adjustments where and when needed.

Careful, though: you don’t want to smother your employees. Nor do you want to drive your managers mad by making them do performance reviews all the time; they’re having enough trouble making time for their work as it is. You will find, however, that even weekly performance reviews don’t have to bother anyone as long as you keep them…

Simple. What’s the point of complicating your employees’ lives? Get the information you need—what did you do, what do you need to do, what is in your way—and get back to work, you and employee both. If there’s something that you need to work out with an employee in greater depth, keep it out of the performance review and move it to a separate meeting. Deal with problem employees promptly—don’t give them endless excuses to talk their way out of issues. Once-a-year performance reviews can still be useful in a comprehensive way, but if you keep up with your employees throughout the year, you’ll be surprised at what a breeze the “big” annual review becomes.

Collaborative. We’re sorry if you miss the days when you could intimidate your employees into submission. Today’s employees will only suffer so much of it before looking for a job at another agency. We can’t say this often enough: finding and keeping good employees has never been tougher, especially in insurance. Principals have wised up to this and begun developing employees accordingly. Coaching and mentoring, not abuse and intimidation, are the way of the 21st century, and employees, it turns out, are grateful for it. Far from being the selfish little creatures you’ve heard about, ready to screw the company at the next available opportunity, most employees would rather do right by the company, even those who have long since checked out. Try giving them inspiration with a different line of questioning: where have you had trouble with this company, and where have you found success? What would you like some help with, where would you like to go, and how can we help you get there?

That does not mean doting on your employees to the point that you forget operational excellence. Hold everybody to their best standards. Try asking some of these questions: what are you doing for the agency? What do you think you’ve brought to the team? What about you makes us better? The goal isn’t to put employees on the spot, but to get them to think about their role inside the agency and how they could grow within it.

Still, don’t expect every single person to conform to the same standard of excellence. Different people work differently—some are reactive, some are proactive, most are a blend of the two depending on the job they’re expected to do. Don’t judge an account manager the same way you would judge a producer and vice versa. As long as everybody is doing their part for the team, you should be okay.

How about it? Are you ready to retool your performance review into an instrument of operational excellence? Let us know how it goes and whether we can help. We’re in the Digital Broker LinkedIn group taking your questions, listening to your stories, and sharing the wisdom we hear. Come say hello!


Indio Technologies

Indio simplifies the insurance application process for brokers and their clients. We make it fast, easy, and E&O free, saving your agency time and money. The white-labeled platform comes pre-loaded with a library of 5,000+ digitally enhanced "smart" insurance forms and applications, a full e-signature solution, and secures document sharing. To date, thousands of brokers, big and small, use Indio to service more than 300,000 business clients. In total, Indio has raised over $30M in funding from Menlo Ventures, 8VC, NFP Ventures, 500 Startups, Merus Capital, and Compound.

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