Performance reviews are one of the most important communication channels an enterprise can use, yet according to a survey by research firm Society of Human Resource Management, it seems they aren’t always effective: only 30 percent of respondents believe their company does a good job with the performance review process.
Plus, further neuroscience research reported in Strategy+Business showed traditional performance reviews have an adverse impact on employee motivation and productivity. Based on these findings, brands like Accenture, Adobe and Expedia have moved away from the conventional performance reviews method to other innovative solutions.
To help your company stay ahead of the curve we asked leading experts and practitioners to share their insight into how brands can get the most out of their performance reviews.
Why Performance Reviews Matter
Performance reviews make up a critical aspect of employee experience. It allows employers to assess how an employee is fairing in their role and gives them an opportunity to provide feedback. It also acts as a good medium to nurture and develop employer-employee relations on a one-to-one basis.
“In theory, a performance review is supposed to help managers assess how effective an employee is in their role. How well do they perform tasks, promote the team agenda, and contribute to the overall business strategy?” explained Hadas Almog, head of global HR at WalkMe.
Related Article: How 3 Companies Benefited by Changing Performance Management
What Are the Drawbacks to Conventional Performance Reviews?
While performance reviews intend to strengthen the employee experience, the current conventional method, as noted by Almog, is not well-suited for the fast-paced knowledge and digital economy. “The traditional performance review focuses on the past. It’s about what an employee did or could have done differently. In a rapidly evolving digital business landscape, this approach to assessing employees is the least productive thing you could do. Employees today don’t need feedback, they need ‘feedforward.’ They don’t need once a year or quarterly evaluations, they need daily conversations that will push them ahead,” Almog said. “Of course [employers need] to know what works and what doesn’t, what contributed to problems or successes. But the attention should always be on growing, stretching and achieving new goals.”
Tracy Cote, chief people officer at Genesys, agreed while adding that employees don’t generally see performance reviews as productive. “Employees hate performance reviews because they are [seen as] a waste of time. This is because employers fail to realize that employees want to be treated like adults. So, rather than giving them the business equivalent of a report card once a year, employers should encourage management to speak with their employees about their performance on an ongoing basis,” said Cote.
Almog also added that the traditional performance rating system can affect the morale of the team. “[Employers] realize how unfair it is to force employees into ranking systems. The obvious effects on employees are demoralization, discouragement and disengagement. I promise you, making your employee feel these three things will not work in your favor,” Almog added.
Another traditional performance review strategy that can cause problems involves blending a performance review with a salary discussion. Julian Cook, CEO and founder of How Am I Going, explained this issue in detail. “The most destructive performance reviews are those that mix feedback discussions with pay discussions, where employees are stack-ranked and pitted against each other,” said Cook.
“You just can’t have an open, honest conversation about personal development in that scenario — plus it kills teamwork. Except for sales commissions, pay is based on market factors and budgets — what employees contribute on a day-to-day basis has little bearing on how much of a raise the company can afford to pay,” Cook continued.
To improve upon this traditional method, Cook advised organizations to “schedule quarterly development discussions with everyone in the room. There, everyone shares the feedback they’ve received and what they’ve learned from it. Others in the room simply listen and ask questions. Then, if it’s solicited, they can give feedback and advice.”
Related Article: How to Write Performance Objectives that Work
Gaining More Value From Performance Reviews?
Writing in Govloop, George Kettner suggested that by utilizing advance performance management systems, it will assist brands in monitoring performance results, setting clear objectives for the employee, and creating better training and career development programs. Also, as Kettner pointed out, performance management systems will help brands gain accurate performance appraisal data.
“The digitization of performance management not only provides more precise data, but also positively influences management processes and strategic development. Technology-enabled performance management tools simplify the manager’s evaluation process and turn employees into active participants in their review sessions,” wrote Kettner.
In addition to incorporating technological solutions, Almog advised brands that they must change their approach to performance reviews. “If you want your employees to work hard, care and commit to your organization, you need to boost motivation. Show them how they can grow as a professional, and how their role is important to the company. Be as generous with your praise as you are with your criticism.”
And finally, Cote wanted to remind brands of the fundamental reason for having performance reviews. “At the end of the day, performance feedback should be a conversation — not a document batted back and forth online. So, whatever vehicle companies choose to leverage to facilitate those conversations should be secondary to the ultimate point of management: to give your employees the guidance, tools, resources and information they need in order to do their very best for your company, every day.”
Do you have any plans to revamp your organization’s performance reviews in 2019?