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3 Questions to Re-Examine Your Employee Performance Review Process

March 12, 2020

We’re all familiar with the old adage, “People don’t leave jobs, they leave managers.” A critical function of the manager role is to be able to motivate employees, encourage their development, and foster an environment for open performance discussions. A lot of this happens during the employee performance review process, so it’s crucial that the conversations you’re having with individuals throughout the year are meaningful and productive. This is a great time to reflect on the previous year’s process to better understand how to structure reviews for the year ahead.

I recently hosted a webinar on exactly what makes an effective employee performance review. There are ways to examine your current processes to evaluate where and how to make your reviews as valuable and powerful as possible.

Here are three ways to take charge of your people management and get both employees and managers engaged and invested in employee performance reviews:

Should You Switch From Annual Performance Reviews?

employee review

It’s difficult for employees to have a full understanding of how they’re performing if they’re only hearing about it once or twice a year. Interestingly, 30% of millennials have reported quitting a job after a performance review — not because they can’t handle the criticism, but because they aren’t getting valuable feedback that helps them understand their own performance and what they need to do to be effective. Then, ultimately, they feel blindsided with a poor review at the end of the year. 

In the webinar, I also discuss “Growth Divide,” noting that leadership and employees don’t always agree on what constitutes growth. Executive leaders consider things like market share, revenue, and other measurable indicators of company growth and competitive strength, while employees consider the things that are necessary for them to contribute and thrive within their organization. According to the study used in the webinar: 

  • 50% of employees want performance conversations on a monthly basis, but 69% of managers still only conduct employee performance reviews once or twice a year.
  • 50% of employees don’t feel comfortable raising issues with their manager in between reviews, but 75% say they’d be more proactive if they received more frequent feedback.
  • More than 90% of employees would like mistakes and opportunities addressed in real-time, but 67% of managers admit they remove mistakes from reviews because too much time has passed since the event to be relevant.

So, what can we do to correct those issues? Make it agile. Many companies have eliminated the appraisal aspect of performance appraisals, and instead replace them with real-time feedback in the form of one-to-one conversations. Terms like “appraisal” have taken on negative connotations for both managers and employees, and as such, those conversations tend to begin from a space of negativity rather than one of growth. Instead of rehashing the past year, leverage that data to drive the conversation into the future — how can information be used to set up an individual for success in the year ahead?

We should change the way we see performance reviews. It’s a cycle, not an event. Managers and employees should work together to plan their goals and development, manage the process closely throughout the year to ensure there are no surprises, review the progress, then repeat the process over and over. It’s not a singular event, it’s a cycle of planning, check-ins, and review.

Are Your Conversations Valuable?

You might have already implemented regular one-to-ones, but are you making the most of your time together? A live poll taken during my webinar gathered the responses of HR managers and revealed that their gravest concerns with employee performance reviews are that they’re too long, too outdated, and too generic.

The goal of performance review conversations is to create a closed feedback loop — no gaps, stalls, or misconnections. A good conversation is one that is accurate, effective, and relevant to the employee — that is, feedback that’s useful to them, that they can accept as a tool to use in their development. Instead of using your reviews to think about what happened over the past year, reframe them as a way to look forward. Use this time as a way to examine future needs, future desires, and what you can do together to make it happen. 

How do you facilitate a more powerful conversation?

  1. Provide feedback in real-time. By addressing issues and opportunities in-the-moment, managers and employees don’t miss opportunities to grow, correct, or discuss behaviors at a time that is relevant.

  2. Understand the individual’s motivation. Not every employee is driven by financial compensation, and a manager’s motivations might not match that of an individual. Consider who is part of the conversation, and what drives their behavior. Seek to understand their motivation before you attempt to have a conversation so you can come from a place of empathy.

  3. Include individual development goals. Ensure that the individual can be confident that the conversation is of benefit to them, not just the company. Expectations can be set to meet company goals or standards, but take into account the needs and wants of employees, too.

  4. Make it honest and meaningful. Be sure that the feedback you provide comes from a place of honesty, meant to provide real value to the individual, rather than reciting from a programmed, formulaic one-size-fits-all routine. Holding meaningful conversations is a great way to reinforce great behavior and propel performance forward continually.

By following the four tips above, organizations can create more productive and meaningful performance review processes that motivate and encourage employees, and in turn, create a happier, more productive, and motivated workforce.

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Melinda Kennedy Melinda Kennedy is a Senior Organizational Development Consultant with Caliper/PSI. Her areas of focus include executive coaching, leadership development, and team effectiveness. Melinda holds two Master of Arts degrees in Psychology, the most recent focusing on Industry and Organization.