Common performance reviews are mostly ineffective: they stress employees, overload managers and yield questionable results. Many companies are abandoning the annual performance review altogether. If you’re not ready to abolish annual reviews, enhance your process by remodeling your performance management practices.
How to build an effective performance review process:
Introduce useful employee evaluation techniques
Managers often evaluate their team members using numeric rating scales or their own overall impressions. These approaches can give way to biases and may not provide enough detailed feedback to help employees develop. Introduce useful techniques that can make giving feedback easier:
- Critical incidents: With critical incidents reviews, managers keep logs with instances when employees did exceptional work or made serious mistakes. This technique helps managers remember significant events so they can justify their employee performance evaluations with detailed examples.
- Performance measurements: Measurements are useful in quantifying an employee’s work. Discuss what metrics make sense for each team. For example, sales teams may use the number of successful sales calls per week as a possible metric in an employee performance review.
- Detailed rating scales: Consider using behaviorally anchored rating scales (BARS) where every point of the scale is accurately defined to avoid inconsistent employee evaluations (e.g. a score of five on a five-point scale can mean a customer support representative “answers all customer questions quickly and accurately, with minimum supervision.”) Also, behavioral observation scales (BOS) help track how often employees exhibit a certain behavior (e.g. resolving customer complaints in a timely manner on a daily basis.)
Complement formal performance reviews with frequent feedback
Building your performance review process around employee development (e.g. regular feedback and constant coaching) can be better for employee morale and productivity. This way, employee performance reviews shift focus: instead of being dreaded end-of-year processes, they become a non-threatening tool to help employees improve. In frequent 1:1 meetings, managers and team members can address issues immediately, instead of waiting to air them at an annual review.
With constant feedback, consider:
- Too many meetings can be impractical. Opt for short, weekly or bi-weekly meetings.
Take advantage of technology
Performance reviews can be time-consuming for managers. Technology can save time and streamline the process:
- Performance review software, like Small Improvements and Spidergap, can help you keep all assessments in one place and review them more easily.
Encourage management by performance objectives
Managers who lead by objectives work with their team members to help them set clear goals, whether abstract (e.g. improve presentation skills) or quantifiable (e.g. deliver X presentations in the first quarter.) Performance appraisals revolve around which objectives were or weren’t accomplished, and how they can be met in the future. Managers who want to employ this method:
- Ask for their team members’ input. Employees feel like they don’t have a say in their work if managers set their goals for them.
- Align an individual employee’s goals with team and organizational goals. Employees should know how their work adds value to their company’s business.
- Set high but attainable goals. Setting unrealistic goals can demoralize employees, while setting the bar too low can make their job feel purposeless. Use the SMART method (Specific, Measurable, Appropriate, Realistic, Time-bound) when setting goals.
Teach managers to give meaningful employee feedback
Most employees dislike negative feedback – even those who want to learn and grow. But, delivering a negative review can have positive results, if done correctly. Managers can arrange a meeting with their team members to discuss performance, and they can make the most of those discussions if they:
- Open with positive feedback to set the tone of their meeting and help their employees relax.
- Avoid inflating or downplaying problems and focus on corrective actions.
- Back their reviews up with evidence. If they have given a low rating to an employee for a specific skill, they should explain why.
- Ask team members for their suggestions on how to improve their own performance, and use their input to create a development plan.
- Discuss plans to enhance team members’ strengths.
A performance appraisal process shouldn’t be one-sided. Show your employees you want to invest in their success by focusing the performance review process on improvement and growth. Making employees feel valued strengthens morale and engagement, and boosts your company’s success in the long term.