Performance Reviews Are Dying. Should You Bring Them Back to Life?

This just in! People hate performance reviews.

Managers hate how much time they suck up, employees hate the awkward self-evaluations, and everyone hates the annual dump of repressed criticism, praise, and feedback. Throw in the added pressure of compensation adjustments, and you’ve got a regular recipe for despair.

In recent years, performance management backlash has resulted in many businesses deciding to ditch them all together. But is that really the best solution? Does the criticism and feedback just get repressed permanently? How will employees know where to improve? Will anyone ever get a raise?

Performance management processes are getting poor reviews

And the statistics are out there to prove it. According to one study, over half of employers surveyed said they don’t measure improved productivity. But that’s just the beginning.

• 45% of HR leaders do not think annual performance reviews are an accurate appraisal for an employee’s work.
• 58% of organizations rated their performance management system as a “C grade or below.”
• Only 14% of organizations are happy with their performance management system.
• A mere 8% of companies report that their performance management process drives high levels of value. Nearly 60% said it is not an effective use of time.

Performance reviews either aren’t being done well or aren’t happening at all.

Did We Throw Out the Baby with the Bath Water?

There are some benefits to the traditional performance review. Having a defined process in place encourages the development of standardized practices and objective criteria for rating performance. It also helps with documenting employee performance issues, which may help prevent discrimination and unlawful termination claims.

When done right, performance management can also help build relationships, increase employee engagement, assist with talent development and succession planning, and create staff loyalty and trust.

The best of both worlds

Perhaps formal performance reviews don’t need to disappear. Maybe they just need to change with the times. A new version of the old review that aligns with your company goals and emerging best practices might just be the answer you need.

Here are some key ways you can put a new twist on employee reviews, and make everybody happier in the process.

Scrap the formal, annual review

The ineffectiveness of annual reviews doesn’t just come from the amount of pressure that builds up over the course of 12 months. Or the awkwardness of talking to your boss about performance issues while trying to eat sushi.

If you’re only assessing progress once a year, it’s going to be hard to remember key details for each of your employees. And even if your memory is a steel trap, the feedback you provide is often too little, too late. Employees don’t want critiques about how they handled something six months ago. They want real time feedback and support that can help them do their jobs better and more efficiently.

Tip: Schedule short meetings on a regular basis (quarterly, monthly or even weekly) and focus on and how you can help your employees succeed.

Take notes and summarize

The human memory is a funny thing. Sometimes it works, sometimes it doesn’t. And sometimes two people remember the same event two completely different ways.

Take notes during or right after your meetings, and send them along to summarize what was covered and any specific takeaways. Make sure both of you are in consensus, and that it’s captured in writing.

Once feedback becomes more frequent and notes are being kept on a regular basis, performance review meetings become more of a summary and discussion of feedback the employee has already been given. This conversation can set the tone and trajectory for the time period until the next review.

Give constructive criticism

It should go without saying that the point of performance management should be to review progress and make suggestions for improved performance— not to nitpick or wield power.

Addressing performance issues can be tricky, and requires some finesse. It’s natural for people to get defensive, but these conversations get easier when your employees know you’re primarily interested in helping them move forward and do their best.

Instead of showing up with a laundry list of complaints or demands, ask some open-ended questions so employees can address their own performance successes and concerns. Did you get the results you wanted? How does this work fit in with company goals? Would you have done anything differently? Are there ways management can help make these processes better or more efficient?

Address the elephant in the room

If you’re going through organizational change, a staffing issue, serious morale issues, or some other major challenge, don’t dance around the topic or make people drag information out of you. Be honest and open about what’s happening and how it could affect the company and the team.

The same goes for compensation. Companies who talk about compensation early and often can remove the taboo and the stress involved with bringing it up. Make sure your compensation policies are fair, documented, and consistent.

Schedule reviews in advance

Dropping by for an unexpected performance meeting is more likely to raise heart rates than performance levels.

The last thing you want to do is cause anxiety and draw attention away from the real work of developing your team.

If regularly scheduled meeting times don’t work for your company culture, that’s okay. Just be sure to approach performance meetings in a constructive way. Request a meeting ahead of time and let your employees know what you’d like to discuss.

Make it a two way street

Evaluating employees isn’t just about checking off boxes and letting them know what they did right and wrong.

Of course you’ll want to check in on things like schedules, workloads, projects, processes, and results. But also make it clear that as a manager, your main purpose isn’t just to grade performance. You’re also there to answer questions, listen to ideas, and provide support.

Your employees will never meet their goals if you don’t give them the tools they need to be successful. Make sure you’re holding up your end of the deal.

 

Running into challenges with employee performance, engagement, and retention? At Sonus Benefits, we’ve got ideas to help you address these issues and more. Get in touch with Sonus to find out what working with a true employee benefits consultant feels like.