In a nutshell: Performance reviews can be agonizing, for both reviewer and reviewee, but here are three tips to make the process easier and more meaningful.
It’s that time of year again — you’re expected to grade and rate all your employees based on what you can remember of their performance over the past year. At the same time, you must determine if each employee deserves a salary increase — and if so, how much.
It’s not only a painful process for you, but employees report it is stressful for them, too. According to Deloitte University Press’s “Performance Management is Broken,” only 8 percent of companies believe their performance management process drives high levels of value and 58 percent believe it is not an effective use of time. So, what can we do about it?
Give Employees More
One way to improve performance reviews is moving from a yearly meeting to real-time feedback. If employees don’t have the opportunity to make changes to their behavior and performance throughout the year, how can you expect them to get better? Additionally, most managers find it challenging to keep track of what happened with each of their direct reports over the last month, never mind the last year. This approach gives employees the opportunity to continually learn and improve in their job function, and it takes the pressure off management to recall every detail regarding performance months later.
One example is GE, which conducts regular, informal “touchpoints” between managers and employees to update priorities and review performance, according to a Harvard Business Review article. Managers are able to coach with an eye toward progress and help their people focus on looking forward, not backward. With an ever-changing business landscape and shifting customer needs, individual employee goals may change throughout the year, so continual conversations around priorities meeting requirements are imperative.
Make Ratings Relevant
Ratings in some fashion – whether they’re numerical (on a scale of 1 to 5) or qualitative (meets or exceeds expectations, or needs improvement) – may still be relevant for consistent record-keeping or to determine salary increases on a fixed budget, for example. But how they’re done is what needs to change. Rather than assigning a rating to generic performance statements and tasks, the evaluation should focus on what specific contributions an employee makes to the organization.
Statements that are to be rated should be customized based on what the job allows the employee to contribute to the firm. Some companies even have employees help write the statements on which they will be rated, encouraging ownership and transparency when it comes to performance evaluations.
Have Two-Way Conversations
Instead of a formal sit-down meeting, in which you tell your employees what they’ve done well and how they need to improve, simply have an open and honest two-way conversation with them. You’ll especially want to take this approach once you’ve implemented more frequent feedback sessions. This encourages the employee to take a stake in their own performance outcomes.
Additionally, when your employee is well-prepared for the conversation, they will likely bring valuable information to the table. According to The Balance’s “Common Problems with Performance Appraisals,” the best way to conduct performance reviews is to guide the discussion so that the employee can assess his or her own performance and set his or her own future goals for improvement. Be sure to point out the similarities and differences in the reviews employees have given themselves compared to your evaluation, so they know where you stand, and help them make the connections of career aspirations to the overarching goals of the organization.
It’s time to evolve performance evaluations – and not only make them tolerable but valuable and a positive experience for all parties involved. It starts with changes you can make in your organization as a business leader.