Steps to Revitalize Your Performance Review Process
When your company relies solely on a formal annual performance review process to gauge progress and accomplishments, many valuable opportunities fall through the cracks.
According to Gallup, 26 percent of employees in a recent survey stated that their performance was being evaluated less than once a year, while 48 percent were being reviewed annually. The majority of workers, at least in the United States, are still being graded on their achievements once a year or less.
Spacing these reviews so far apart creates stress and anxiety for all parties. Often, they focus on the negative, failing to build close functional relationships between employers and their hires. Too much time passes between crucial conversations. This has a direct impact on morale and work production.
In that same survey from Gallup, only 29 percent of employees strongly agreed that their employee performance review was a fair assessment. Even fewer (26 percent) strongly agreed that it was accurate. Misjudged and misunderstood, these meetings become both highly stressful and a waste of time.
Crafting a successful performance management system means going back to the basics. For example, even the phrase “performance review” is outdated. Managers are now trying to foster more frequent conversations that have less at stake. They are changing the name, their approach, and seeing positive results. Switching up your employee review strategy can revitalize your business and inspire your staff.
Rethinking the performance review process marks a growing trend. According to a recent survey by the Institute for Corporate Productivity, 67 percent of the heads of companies surveyed said that they are rethinking their current performance management practices—and 59 percent of these company leaders are doing so because of employee feedback.
The Performance Review Mindset
Tell us if this sounds familiar:
You’ve been notified that it’s time for your yearly performance review. You find out that this discussion with your boss is scheduled for next week, and you are eligible for a small raise. There are also some open positions above yours in the company. Finally, you’ve been asked to prepare a document summarizing your biggest accomplishments of the year without any clear parameters of success. This paperwork is due tomorrow.
The phrase “employee evaluation” or similar terms conjure up these frightening scenarios. Closed-door meetings, the staffer’s entire career future at stake (including pay and advancement), and 30 minutes to parse and quantify 12 months of work. Anxiety, fear, and stress are common—and understandable—reactions.
Revamping the Performance Review System
Rename the Process
Renaming the process is a great first step. Perhaps naming your meetings as “Check-ins” or “Connect Sessions” will suit your business better. Perhaps these talks don’t need a name—they simply need to happen.
However, it’s important to note that renaming your meeting with your employee is not enough. “Some companies just rename it, and they say, ‘We’re getting rid of reviews.’ And then they do something equally stupid,” says Samuel Culbert, a management professor at UCLA. His popular book calls for throwing out the process entirely.
Schedule a Conversation
These talks should be happening every few months, or every quarter. This helps shorten the amount of time a manager needs to spend on putting together the review. Your connections to your workers are strengthened, and they are given a clear signal that what they are doing on a day-to-day basis is important to the enterprise.
Base Evaluations on Data
In scrapping the traditional yearly review, some companies are opting for new performance management systems driven by data. This data can include time and attendance records, incident reports, and customized KPIs related to both individual and team goals. For example, a salesperson can be evaluated based on metrics including quota attainment and pipeline coverage.
Data-driven evaluations require two things from a manager: 1) Clear and achievable goal-setting, and 2) recognition when those goals are met or exceeded. When reviews include performance data, there should also be a prize of some kind for accomplishments. Some people love the competition, while others enjoy the thrill of reward. Either way, the positivity is infectious.
Be Fair and Accurate
Having more frequent discussions with the people who work for you is an immediate way to improve the fairness and accuracy of any pending evaluations. When you increase both communication and connection, people begin to open up, sharing struggles and challenges in real time instead of attempting to recall and discuss them six to 12 months down the road.
This is true whether your business is built upon a traditional or nontraditional model. Startups, small companies, even an entrepreneur working remotely can benefit from a regular video chat with the people he or she pays for their services. Speaking to an employee only once a year is deeply unfair (to both you and your employees) because so much can change in that time.
There is a misconception that the purpose of a performance review is to reprimand or take someone to task for their mistakes. Instead, the plan should be to walk away from a meeting with positive attributes reinforced and a plan filed for improvement. Consider using phrases that communicate this tone, such as: “We are looking to help you perform at your best.”
These evaluations should demonstrate that an employee is highly valued, and their work and opinion is respected. At this point, you have already committed to meeting with them more often, which has made both of you more relaxed and the discussions more pleasant.
Of course, there still may be things you wish to improve. If someone is showing up late to work, or has a bad attitude, they can still be made aware and encouraged to do better. If there is a way to quantify those shortcomings with data as noted above, it is good idea to do so.
Use an Automated System
All of these changes can be made easily with the help of an automated system. It provides reminders for everyone involved, including management, HR, and the staffer in question. Customized alerts can be sent well in advance of scheduled meetings, along with forms or questionnaires associated with that talk.
Automation also means processes are fully transparent. Notes and processes from previous meetings can be reviewed by both parties (and HR personnel) to determine if expectations are being met. There are points systems available, so that workers can receive points for attending a meeting or hitting a business goal. The HR admin also gets a copy of all reports filed and points earned, allowing them to rate employees with accuracy.
Focus on Success
From the moment you onboard a new employee, you’ve dedicated yourself and your business to investing significant capital in that person. Regular reviews, conversations, or check-ins are a great way to leverage that investment. They foster ambition and drive, helping your team to build toward promotions and financial success, and identifying natural leaders in the process.
You have faith in your staff—that’s why you hired them in the first place. Allow them to rate themselves as part of the evaluation process. You will be surprised at how insightful they are when it comes to their own strengths and faults. Allowing them to weigh in without judgement also prompts important discussions.
The new performance review methods are ready for modernization. Consider using an automated system to help ensure that the entire process (and everyone involved) stays accountable, on track, and transparent. Click here to get started.