Sam Makad is a business consultant. He helps small & medium enterprises to grow their businesses and overall ROI. You can follow Sam on Twitter, Facebook, and Linkedin.
The importance of regularly scheduled performance reviews isn’t understated, but too few employers execute an appropriate performance management system. Here’s why.
Most employers agree that performance reviews are necessary to foster employee growth, but only 26% of employees think the feedback they receive helps them improve their work.
There are two possible reasons for this. For one, feedback is rarely an honest, two-way dialog that’s built on strengthening relationships. It often focuses on past mistakes that can’t be fixed. This one-way instruction and criticism-based tactic aren’t helpful for employees or employers.
For another, feedback isn’t provided on a regular basis. Only 28% receive feedback once a week, another 28% receive it a few times a year, and 19% get it once a year or less.
This may mean the other 15% don’t receive feedback at all, which is troubling considering 60% want feedback on a daily or weekly basis. Clearly, employees aren’t getting what they need.
Instead of focusing solely on user feedback, employers must stress the importance of regular performance reviews. With that said, no performance review policy should be enacted without care. Poor feedback can be just as, if not more, ineffective than a feedback-less work culture.
The State of Employee Review Programs in the Workplace
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Performance reviews are formal regulated assessments where managers and stakeholders evaluate an employee’s work performance. The purpose of performance reviews is to learn more about a person’s strengths and weaknesses while offering constructive feedback.
Unfortunately, performance reviews are often treated as a task on a manager's to-do list. 77% of HR executives don’t believe annual performance reviews accurately represent employee performance. This is because feedback is left until the end of the year, not when it’s necessary.
How Performance Management Systems Disrupt Performance
In the real world, performance management systems are hard to get right. Without a good system in place, the performance structure falls apart, leading to a low morale domino effect.
Here are some reasons why performance reviews go wrong:
- Poor Metrics
Metrics are used to promote the performance a business wants. However, targets are often siloed, leaving departments to take an “every man for themselves” approach. Once targets are met, less work is completed.
- Poor Targets
Targets are either too out of reach, which demotivated employees, or too easy to reach, which doesn’t challenge employees to improve. The best targets are attainable but stretch employees to do more than they did the week prior.
- No Transparency
The link between individual effort and company objectives isn’t present. Management may set goals to bolster their own performance or to cut out inefficiencies. Both don’t focus on the long-term or align everyone under one vision.
- No Relevance
Employees are more likely to reach company goals when they align with their own. However, it’s rare that employers ask what the employee wants out of the employer-employee relationship. This makes employees feel like an afterthought.
- No Dialogue
Performance management falls apart without frequent, honest, and effective communication. Without internal communication, employees lose sight of their goals or any feedback given. Metrics are treated like a passive measure of progress.
- No Management Engagement
Management interaction with frontline personnel is an effective management tool, as high-level executives rarely visit sister offices before the performance review. This makes any feedback received hollow and unimportant.
- Wrong Consequences
Employees either receive no consequences for behavior or the consequence is dire or frightening (i.e., loss of job). Negative reinforcement doesn’t work, and will never work, to improve employee performance in the long term.
It is difficult to motivate employees if a work culture is built on bullying, purposeful neglect, or apathy. Employers have to build their corporate culture back up if they want to provide effective feedback. What managers do and say will affect how feedback is interpreted.
How Feedback is Routinely Provided and Why it’s Ineffective
Managers aren’t often trained to provide successful performance reviews. This may make them put this responsibility off until the last minute or avoid preparing for the review appropriately.
However, management has the authority to substantially affect the employee’s career. If reviews aren’t taken seriously, productivity will fall, and morale will suffer. This is made even worse if there’s no support network in place if an employee doesn’t meet a manager’s expectations.
If workplaces don’t prioritize a culture of feedback, managers may do the following:
- Criticize Performance Without Examples
It’s okay to address shortcomings, but managers should never criticize an employee without giving them a way to improve. Simply saying, “I didn’t like this,” and moving on will make them feel defensive.
- Comparisons or False Praise
It’s inappropriate to rank employees or act as if everything is fine. Managers should praise employees when appropriate, but too much false praise could make them assume they’re doing better than they are.
- Speculation or Bad Language
Managers shouldn’t state there “maybe” a “possibility” of a raise in their future. False promises only set people up for disappointment. They should avoid using “Always” or “Never” to draw blanket statements of behaviors.
- Repetitive Commentary
Some things bear repeating (especially if the behavior hasn’t changed), but managers should change the advice they provide. Perhaps what they’re saying isn’t getting through, but repeating advice in the same way, won’t work.
- No Reward or Milestone
It’s appropriate to give out glass recognition awards, a bonus, or kind words for a job well done. If your employee receives nothing but “kudos,” they’ll feel like their hard work isn’t appreciated. This turns top earners into dejected workers.
Performance reviews should be a priority for managers and employees, but 70% of companies use annual performance review structures. So much can change in a year (the pandemic is proof of that), so it’s essential that managers speak to their employees regularly to steer them in the right direction. Otherwise, employers and employees won’t get the results they want.
How Performance Reviews Should be Conducted
It’s clear that offering performance reviews isn’t enough to benefit from regular employee feedback. If employers want to benefit from performance management systems, they must…
1. Prepare to Conduct Performance Reviews
If you’re responsible for conducting performance reviews, you’ll need an established guideline for how to approach employee-based feedback. Here’s how you create one before a meeting:
a.) Set a Date and Time
Whether managers are planning to host a feedback event remotely or in person, they should clear their schedules to avoid any interruptions. They should minimize commitments earlier in the day to avoid rescheduling or showing up late. That way, you can focus on your employees.
b.) Review Past Reviews
If you or another manager previously conducted a review, go through your notes and see what was discussed. Check if you intended to follow up or whether you planned to communicate anything specific. Consider if the employee improved on your advice or if they need more help.
c.) Be Ready to Take Feedback
No performance management policy will work unless employees are also allowed to offer feedback. How you manage will affect your employee’s performance, so they should be allowed to speak their minds. Come prepared with a notebook or laptop to record what they say.
d.) Prepare for the Unexpected
Ideally, feedback is given privately and one-on-one, meaning staff may bring up matters you weren’t aware of. Be sure to listen to your employee’s frustrations and suggest ways to fix the situation, if applicable. If the matter is truly severe, set up a meeting with the accused party.
2. Emphasize Leading Metrics/Indicators
Companies often measure and manage performance through lagging indicators, such as compliance with quality targets or monthly output. By the time the results are in, it’s too late to do anything. Effective companies track the same metrics but alter them based on need.
Some metrics require intervention from technology. For example, if you wanted to offer by-the-minute feedback about a power plant's performance. However, most function fine with a manual process. For example, a traffic light system that gives workers a “pass” or “fail” for output.
Your metrics will become more complex as you keep improving your performance management systems. Instead of “pass or fail,” you’ll move to percentages (i.e., performance was at 95%).
With more precise information, employers can check if they need more labor to meet demand.
3. Create a Standardized Work Process
Even when metrics and targets change, companies should standardize all work processes. Standard work is based on three rules: standard policy, knowledge and ability, and measured performance. When processes are standardized, it’s easier to find ways to improve them.
These factors are essential for performance reviews because it’s clear what shouldn’t and shouldn’t be changed by managers and employees. Employers can simply point to a number, see that it’s lower, and ask how they can help employees improve them in the long term.
A standardized work process also helps streamline performance review templates, which can allow managers to perform more of them. Automation can also cut down on tedious work tasks.
With that said, all managers should include the following on their review template:
- Accomplishing Goals: Setting goals and how to help others achieve them
- Leadership Qualities: Help team members solve work-related issues
- Communication: Gauge if employees can communicate successfully
- Teamwork: How the employee works with others or if they respect others
- Culture and Values: Check if employees create a positive work environment
Remember that adopting continuous feedback doesn’t mean removing measurements and metrics from the review process. Use them to create a better performance review system.
4. Weekly, Monthly, Quarterly, and Annual Reviews
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Annual reviews aren’t necessarily bad, but they can’t be your go-to. Companies should create a weekly, monthly, quarterly, and annual review schedule similar to the following.
a.) Weekly Reviews
Weekly performance reviews are perfect for record-keeping and ensuring a project is going according to plan. Agile or fast-moving projects with multiple deliverables need to be discussed regularly. While weekly rewards can be helpful, avoid giving too much or before a goal is met.
b.) Monthly Reviews
Monthly performance reviews are useful for short-term contracts, freelancers, and new hires going through the onboarding process. It’s a good idea to set some project deadlines around these reviews, as 80% of employees want feedback immediately after the job is complete.
c.) Quarterly Reviews
Quarterly reviews follow the quarterly business structure. Therefore, quarterly reviews should happen every 3 months and include long-term goals and targets, such as selling a certain amount. It’s in your best interest to create daily or weekly goals that lead to the quarterly goal.
d.) Yearly Reviews
Yearly reviews are the traditional way to reward or offer feedback to employees. However, yearly performance reviews should only feature the biggest goals. If employees meet their weekly, monthly, or quarterly targets, managers should increase the challenge for next year.
4. Add an Employee Recognition System
Employee recognition systems increase collaboration, improve company culture, and recruit top-quality employees. This leads to an overall reduction in employee turnover and an increase in employee happiness. However, 82% of employees say they aren’t being recognized enough.
When employees receive a great review, they should be recognized for their accomplishments.
All great performance management systems include a reward system. Employee recognition, just like feedback, should be personal, timely, and appropriate. Keep in mind that some employees prefer you to offer a said award in private, while others want public recognition.
Recognition can come in many forms, including the following:
- Offering a Public Thank You
- Providing Time Off (Vacations)
- Buying Lunch or Dinner
- Giving out Gift Cards
- Sharing Accomplishments via Social Media
- Send Flowers or Their Favorite Snack
- Submit a Donation to a Nonprofit
If rewards are offered at the right time, employee recognition systems can reinforce good behavior. Plus, managers will cut down on employee disengagement and low performance.
Image Source: Unsplash
Workplace performance suffers for two reasons: a lack of regularly scheduled feedback and poorly executed reviews. A yearly performance review schedule isn’t enough to improve employee behavior, but even frequent reviews can be inefficient if they're executed poorly.
Therefore, employers need a mix of the two. If they can set up a performance management system that’s timely and appropriate, they’ll start to see their workplace culture improve from the group up. Plus, they’ll eliminate poor management practices that only hold them back.
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