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Receiving performance feedback is a fundamental part of any job. Without some sort of reflection, how would your employees know what they’re doing well or what needs improvement? They likely wouldn’t—at least not in any formal capacity.
Although most employers agree that performance reviews are important, the reviews themselves become trickier when put into practice. It’s easy to say that an employee must be reviewed, but when? Based on what criteria? How often? These aspects are often debated by employers.
Surveys show performance reviews are one of the most disliked features of any workplace. Not only do employees not want to endure them, but neither do their managers. This toolkit examines why this is, explains how to determine the right review process for your company, and offers resources for ensuring neither party wastes their time.
Reviews At-A-Glance
What does the term “performance review” mean to you? To many people, it means sitting down at the end of the year with a manager to discuss how you conducted yourself over the past 12 months. To others, it might mean chatting with a manager every quarter. To some, it could mean a biweekly conversation to discuss personal goals.
The point is, not all businesses approach performance reviews the same way. This section details those variations and suggests guidance for deciding the best approach for your business.
Choosing the Right Performance Review
Every business has its own way of conducting performance reviews. What works for one company will not necessarily work for another. With this in mind, your business should consider its culture and how employees best receive feedback. What communication methods worked well in the past? What kind of rapport do managers have with employees? How much is your company focused on personal development versus stats and metrics? How often should reviews be conducted?
Reflecting on these questions will help you determine the kind of performance review that will resonate most with your employees. Or better yet, you could solicit feedback from employees about how they prefer to be reviewed. Consider sending a survey or asking employees individually during their current performance reviews.
Keep in mind the below examples are merely a starting place. Pick any aspects you would like to include in your own review process. Most importantly, you want to devise a system that works for your employees.
Self-Assessment
This type of review involves an employee identifying how they view their own performance. For instance, the employee might be asked to rank various job responsibilities in order of proficiency. This kind of review empowers employees to take an objective look at their performance and make their voices heard.
Self-assessment can be paired with manager assessments as well. This means an employee and manager would both complete assessments of the employee and then compare how those assessments align. Pairing the two assessments allows both parties to candidly discuss any discrepancies and determine areas for improvement.
Rating Scale
This review process focuses on preset criteria and offers a score for each. The criteria can be based on company or department goals, certain metrics, individual behaviors, or anything else you wish to assess. In this method, the criteria and rating standards are the same for all employees.
Having a consistent set of criteria and ratings allows you to effectively judge employee performance against one another. This allows you to see who is doing well and who needs improvement and in what specific area. Some organizations even tie their reward systems into their rating scales. In other words, receiving a low score would mean getting fewer rewards.
360-Degree Reviews
This form of review solicits feedback from everyone who interacts with a given employee, not just managers. This means peers, direct reports, and supervisors all submit feedback, which is then compiled and sent to the employee. The idea is that diverse feedback will help employees get a better sense of their performance.
The 360 review also allows the employee to submit their own personal assessment, then speak about the results with their manager. All the feedback is used to help develop the employee and identify any improvement areas. It can also be used to record problem behaviors noticed by co-workers that persist between review periods. Conversely, it can also highlight exceptional behaviors if multiple people praise the employee for the same reasons.
Personal Development
This review style zeroes-in on employees’ personal goals and then assesses them based on the goal progress. Setting personal goals makes employees feel more engaged and gives them a “purpose” throughout the year.
Goals should be aligned with both company and employee interests. For instance, an employee’s goal might be revamping a training curriculum for new hires. After a predetermined period, their manager would check in on their progress and offer an assessment.
Performance Reviews: Arguments For and Against
Despite their good intentions, performance reviews have their flaws. Some estimates suggest over a third of U.S. employers have done away with traditional performance reviews, according to the Harvard Business Review. Others are using traditional reviews, but their employees are not feeling the benefits.
This section offers brief arguments for and against traditional performance reviews.
Pros
Evaluating employee performance is critical for many reasons, not least of which is determining raises and promotions. Employers must have at least one method for assessing how well an employee is faring at the company. Without one, where is the accountability? How do you identify poor performers?
Traditional rating scale reviews may not work for every organization, but they can be the best option for employees in sales or other metric-based roles. Rating scales are objective and look solely at whether an individual hit a particular mark. Based on that, employers can dole out rewards to top performers and work with poor performers to up their game.
Cons
According to management research firm CEB, 95% of managers are not satisfied with their company’s performance review process. What’s more, 90% of HR leaders believe the information isn’t always accurate. Even employees are dissatisfied—42% said annual reviews are ineffective, according to a WorldatWork survey.
The biggest reason for dropping annual reviews is the time it takes. Beyond meeting with each employee and compiling all the individual feedback, the time between “performance” and “review” can be months. How effectively can you assess performance on a task that an employee finished 10 months ago? How useful would that information even be at this point? Considerations like these are making employers rethink when and how they review employees.
Deciding What’s Best
You should consider what would be most effective for your employees before committing to a particular review process. In fact, you may want to include elements from several different approaches. For instance, using a rating scale review but conducting it multiple times a year.
When deciding what is best for your organization, the two big questions to ask are, “What do I hope to accomplish with this review?” and “How can I make this useful for employees?”
17 Best Practices for Perfecting Your Performance Reviews
1. Perform formal evaluations at the same time for everyone each year.While this increases the workload of managers and supervisors during review time, it forces direct comparisons of employees and establishes a nonbiased system.
2. Have regular meetings with supervisory staff. Supervisors will learn from each other’s experiences. Provide adequate training and insist on candid observations.
3. Clearly communicate to employees what their duties are and what satisfactory performance is.Accomplish this through periodic reviews of job descriptions, training, and both formal and informal reviews.
4. Tell employees the criteria upon which their performance will be reviewed. Develop standards and establish reasonable goals for employees. Make sure that employees understand the consequences of their failure to improve.
5. Don’t wait until the annual evaluation to provide feedback; offer it throughout the year. Give both positive and negative feedback regularly.
6. Document poor performance in writing.This can be done in the form of coaching, training, discipline, or assessment.
7. Ask employees to complete a self-assessment in addition to the review completed by the manager. This can identify areas where the employee and manager disagree on performance or expectations.
8. Give employees the opportunity to review, challenge, and comment on the evaluation.
9. Meet with employees to discuss all evaluations and expectations. Keep a record of the meeting and what was discussed.
10. Have employees sign the evaluation. While the employee may not agree with their evaluation, it provides evidence that the employee has seen it and has been given a copy. If the employee refuses to sign it, the individual giving the evaluation should sign it along with a witness noting that the employee was given a copy.
11. Establish a review process for evaluations. This will keep managers honest and ensure that supervisory staff is performing reviews consistently.
12. Give employees time to improve and offer resources and assistance if appropriate.
13. Follow established procedures strictly.Apply all procedures and standards equally to all employees.
14. Use other supervisory personnel in the process, if possible, to mitigate claims of personality conflict. This will enhance credibility if all evaluations point to the same conclusion.
15. Make sure employees understand the consequences for failure to perform at an acceptable level. There should be no surprises in employee supervision and evaluation.
16. Hold managers responsible for helping subordinates develop and improve.
17. Maintain confidentiality in employee performance evaluations.
Avoid These Top Performance Review Mistakes
There are a variety of common issues that supervisors should be aware of when evaluating employees. Training supervisors properly is an essential step in avoiding lawsuits and other problems.
1. Rating Inflation
Oftentimes, supervisors give employees inflated performance reviews because they are afraid that honest evaluations will damage their working relationships. Evaluations should be comparative and reflect reality. Inflated performance reviews give employees a false sense of security, deprive them of an opportunity to improve, and create litigation risks for the company.
2. Prejudice or Bias
Management should be alert to possible bias when performing evaluations. Bias can be based on race, sex, age, religion, educational accomplishments, past jobs, or anything else that is not job-related, even if subtle or unintentional. If the employee is a favorite or well-liked, they may receive a higher rating than their performance justifies. Reviewers also tend to overlook certain weaknesses that are similar to those that they personally possess.
3. Failure to Use the Full Rating Scale
Supervisors often give employees an average rating because it is the easy thing to do. The midpoint avoids the difficulty of making and justifying a more accurate assessment. Supervisors don’t do anyone a favor by not using the rating scale accurately and completely.
4. Inconsistencies in Scoring Weighting or Defining Factors
Supervisors frequently fail to understand the rating system, often providing comments that are inconsistent with the rating. This creates a credibility problem for employers in litigation suits.
5. Unrealistic Goals or Objectives
Evaluations may reflect the shortcomings of management. If a supervisor establishes unrealistic goals and then negatively evaluates an employee because they have not met the goals, the supervisor is creating problems for the company.
6. Inadequate Observation
Those evaluating employees must be completely familiar with all aspects of the employees’ jobs to ensure complete and accurate evaluations.
7. Inappropriate Time Span for Review
Reviews should cover the complete period of time since the last evaluation, and supervisors should be familiar with prior evaluations for goal setting and review. However, reviewers should not repeatedly look backward and bring up problems that existed in the past, nor should they focus only on very recent improvement.
8. Allotting Insufficient Time
The reviewer often does not set aside sufficient time to allow for a meaningful performance evaluation. Careful planning and scheduling will enable the reviewer to conduct a more effective evaluation.
9. Lack of Comments
Meaningful and constructive comments and explanations are critical not only if an evaluation must be defended in court but also for employee improvement.
10. Misleading Comments
It’s much easier for a supervisor to say that an employee is “improving” than to say that the employee’s performance is not at the expected or desired level. The evaluation should say explicitly that performance is substandard. Evaluations should focus on identifying deficiencies and developing an improvement strategy for them.
11. Too Much or Too Little Detail
Find an appropriate balance. A general comment begs for supporting details, while being too specific makes it seem like the employee is being picked on.
12. Acting Like a Psychologist or Psychiatrist
One of the main purposes of an evaluation is to identify deficiencies and develop a plan to correct them. Employee assistance programs (EAPs) may provide an opportunity for the employee to address problems outside of work that are affecting workplace behaviors and performance. Instead of trying to provide support for problems that are not work-related, suggest that the employee make use of the EAP, if one is available at your company.
13. Focusing on the Employee Instead of the Issue
Stay focused directly on the problem, not on the person.
14. Not Following Through
Reviewers often do not follow through with suggested corrective actions, decreasing the effectiveness of the performance evaluation.
15. Explain Feedback Thoroughly
Regardless of whether comments and ratings are negative or positive, they should always be explained to the employee. Discuss with the employee how to improve on issues or encourage the person to keep up the good work.
This article was provided by Arthur J. Gallagher Risk Managment Services, LLC. Are you looking for more HR support? NRLA Connect is a free NRLA member benefit. To join, visit www.nrla.org/member-benefits/nrla-connect. NRLA Connect is your lumberyard’s online resource for Property & Casualty, OSHA, and Employee Benefits and grants you access to HR professionals via phone or email.
