Employee performance has been deemed ineffective by bi-annual and annual performance reviews. Gallup found that only 14% of employees believe that performance reviews motivate them to improve, which shows that they are more harmful than beneficial. They are costly for organizations in lost work hours and have little value. Performance reviews are something that employees fear because they focus solely on past failures, behaviors, or results. This is not only demotivating and disempowering but also harms employees’ productivity as their past mistakes are being held against them. Sometimes, employees are made aware of past mistakes during a performance review.
It’s time to move performance reviews from a once-a-year conversation. Companies should instead focus on more frequent, quality conversations and continuous feedback. Problems can be solved more quickly and efficiently by providing immediate feedback, coaching and helping employees correct their mistakes.
These are three ways companies could reinvent performance reviews.
Establish clear, measurable and achievable performance goals
Managers have a responsibility to coach and set goals. Employees will be motivated if they have clear, measurable and achievable performance goals. Employees are more motivated and engaged when they know what to do and how they can achieve it.
Managers and employees need to work together to establish short-term and longer-term goals. Michelle Enjoli is a TEDx speaker and Career Coach. She stated that when performance goals are mutually agreed upon, a routine review of these goals should take place at least once a month in order to determine if there’s any room for improvement, realignment, or pivot.
To track progress and ensure that they are aligned with their goals and expectations, managers should create a shared document with employees. This shared and easily accessible document can be used to capture actions, drive one-on one meetings, set goals, define deadlines, metrics, or anything else that is discussed in one-on one meetings. Managers can also see what an employee needs, where they are struggling, their strengths, and whether they are meeting their goals. This document can also be used to determine salary increases, bonuses and prove an employee qualifies for a promotion.
Adopt A Continuous Feedback Approach
The annual performance review process is fundamentally flawed. Most performance reviews are rushed, as managers don’t have the time to prepare. This results in a review that is incomplete, subjective, or lacking quality feedback, which is not effective and doesn’t accomplish its purpose.
Continuous feedback can help reduce anxiety about performance reviews. It also helps managers identify and correct any barriers quickly and provides the resources and support employees need to achieve their goals. Stefan Wissenbach, CEO of Engagement Multiplier said that continuous feedback provides “a clear snapshot” in real time of the employee’s progress towards achieving their goals and performance. This allows managers to provide immediate feedback, help employees with their work, correct any mistakes, and build better relationships between them and the employee.
Keenan Beavis is the founder of Longhouse Media. He shared that “at my company we incorporate a quarterly one on one lunch or dinner where the employee talks about their life goals, job performance and interests, as well as other aspects.” This will allow for a more meaningful employee evaluation that’s not only focused on the organization, but on the individual employees. It also helps to focus on the areas that need improvement and creates more noteworthy development.
Transform Annual Reviews into Career Planning Meetings
The development of current talent is crucial to the success and growth of the business in many ways. It is not the intention to abolish the performance review, but to improve how it is being used to meet current workplace dynamics. Kate Palmer, HR Advice & Consulting Director at Peninsula believes that performance reviews should be used as an opportunity for goal setting, learning, development plans, career aspirations, rather than focusing solely on past performance or failures. She said, “it’s an opportunity to revitalize an employee’s motivations and engagement for next year.”
A performance management system that is effective can bring many benefits beyond just basic evaluations. These benefits include:
- Productivity, retention, engagement, and satisfaction are all increased
- Personalization that enhances the relationship between employee and manager
- Performance improvements in the business overall
- Focus on driving results increases
- Clear expectations
- This guide helps to identify (non-traditional, traditional) career paths
- Empowers more autonomy
- Increases accountability
Mark Pierce, CEO at Cloud Peak Law Group explained that a good performance management strategy involves a mixture of formal and informal reviews. This allows companies to provide feedback and still have a way of measuring their progress. Pierce stated that frequent reviews lead to better performance management and measurement. For goal setting and reporting on progress, formal reviews can be held quarterly or twice per annum. They can also be used to determine if an employee is eligible for promotion and/or raise. For companies to be able truly measure performance, formal reviews should be combined with regular check-ins and goal-setting sessions.