What Is A Performance Review?
A performance review is a two-way conversation including an employee self-evaluation and manager evaluation discussing the employee’s accomplishment of performance objectives, display of workplace behaviors, and completion of goals. Harvard Business Review defines the performance review well: “The purpose of performance reviews is two-fold: an accurate and actionable evaluation of performance, and then development of that person’s skills in line with job tasks.”
Modern-day performance management centers on the manager providing positive feedback, coaching, and development of the employee’s professional growth. In past times, reviews functioned as more of a monologue that only focused on past performance. In today’s more people-centric work environment, the review is an open dialogue with an emphasis on the employee’s future performance and behavioral alignment. This structure empowers the employee to have a voice in their professional development which increases overall employee engagement.
The most effective performance conversations occur when there are well-defined expectations for job tasks and organization-wide core values. This gives the employee clear direction from the beginning and provides managers with the tools they need to appropriately assess performance. This article is crafted to provide comprehensive information on the benefits and importance of performance reviews, differing methods of execution, and best practices.
The Importance of Performance Reviews
An unfortunate yet informative statistic to consider is that when surveyed, 22% of workers opted to call in sick rather than go through a performance review, according to 99Firms. Quick research into the classic annual review will reveal mostly negative experiences and a general distaste for it worldwide. However, SHRM says it best: “The only situation that is worse than doing one review per year is doing none at all, experts say.”
The performance review is often incorrectly used as the singular performance conversation a manager has with their employees all year. This results in the employee feeling defeated, unheard, and often confused by the manager’s final assessment of their efforts. Regardless of how often performance appraisals are conducted, they should not be used as a replacement for continuous, ongoing feedback conversations that occur regularly.
In contrast, reviews should be the summarization of that continuous feedback. The answer is also not to abolish the appraisal. Absent of the performance review, employees are still being evaluated by their leaders and peers. The review form allows these evaluations to be formally documented.
Performance reviews are vital for a few reasons:
1. Employees and managers need a common standard
As mentioned above, everyone in a workplace is constantly being evaluated based on their performance and display of workplace behaviors. The lack of a standard performance review means these evaluations stay internalized which can cause unconscious bias and unfair practices. If a manager perceives an employee’s performance based on personal experience alone, that opinion may lead to unfair treatment of that employee. However, when the expectations are clear and performance is measured against a common standard, all individuals are held equally accountable.
2. Managers and employees need a way to track growth and development
Properly documented review discussions generate reliable historical data. Looking back at goals accomplished or suggestions for improvement shows employees how far they have come or what specific actions are needed to reach their potential. The manager can make informed leadership decisions about employee development. Lastly, having historical references allows HR to make better business decisions, and protects them in rare cases of disgruntled terminated employees.
3. Employees need to know they are valued
Setting scheduled, intentional time aside to discuss individual performance shows the employee they are a valued member of the team and their personal and professional growth matters. Employees crave feedback and they want to tangibly see how their efforts affect the greater organizational mission and vision.
4. Managers need proper coaching tools
A poll conducted by Digits reveals that more than a quarter of people leaders have never received formal training. Organizations thrive when their managers are equipped with effective tools for guiding employee performance. A review that consists of well-defined metrics and behaviors gives managers a standard by which to measure employee contributions and substance from which to coach them.
4 Types of Performance Reviews
The appropriate performance review format will be determined based on your organization’s specific needs. Later in this article, we will delve into our recommendations for formatting reviews. However, it is crucial to grasp the prevalent review structures, although this list is not exhaustive.
As the name suggests, the 360 review, or multi-rater review, considers feedback from multiple sources such as managers, company leaders, clients, and peers. Multi-rater feedback provides a more holistic, well-rounded view of the individual’s performance and helps to eliminate potential bias caused by only seeking the evaluation of one manager. One potential deterrent of this type is the heavy uplift and time required to gather feedback from several parties prior to the review conversation.
Management by Objective (MBO)
A management by objective appraisal requires equal input from the manager and the employee. Both parties come together to decide on specific objectives/goals for the employee to work toward, thereby creating open communication and accountability. This approach is beneficial for managers overseeing smaller teams or for organizations that don’t necessarily need specific performance metrics. However, when it comes to medical staff or manufacturing workers, for example, employees will have limited input in terms of what is expected of them.
Behaviorally Anchored Rating Scales (BARS)
The BARS approach to appraisals is highly visual, incorporating a behavioral rating scale by which managers select a number and phrase that most accurately describes behaviors/performance. This format requires a lot of work on the backend determining what critical behaviors by which each position should be evaluated. However, the detailed descriptions provided make the evaluation process less abstract and easier for managers to appropriately assess.
Similar to multi-rater reviews, peer reviews gather feedback from the employee’s colleagues who share a similar role and/or department. Peers have a unique perspective of their co-workers’ performance as they often work in teams and on projects together, making them first-hand experts on the employee’s contributions. It is imperative to consider that peer reviews can be tainted if team dysfunction or strained relationships are present.
What Is Assessed In A Performance Review
The contents of the review form will be dependent on what competencies the organization finds value in assessing. However, common themes emerge.
- Performance objectives/metrics- This aspect of the appraisal should answer the question, “What does this employee get paid to do each day?” An accurate evaluation of performance will be based on the job requirements they were hired to accomplish within their specific role and whether they are meeting, not meeting, or exceeding those expectations.
- Core values/workplace behaviors- How employees act while at work is a separate assessment from productivity that indicates culture fit and alignment. Communication skills, the ability to collaborate with a team, and professionalism are just a few examples of workplace behaviors. These values will align with the organization’s overall mission and answer the question, “What type of culture do we want to foster?” Performance objectives and core values are typically both measured as they are mutually exclusive: an employee can be both high-performing and deficient in displaying behaviors in line with company values, and vice versa.
- Different from performance objectives, goals tend to be more specific accomplishments that may change frequently and are future-oriented, aligned with organizational goals, and incorporate the employee’s specific talents and professional growth. While objectives assess basic job requirements, goals are tasks that go above and beyond baseline expectations.
Performance Review Methods
Several factors to consider when determining the best method of execution for performance reviews include the average employee number per manager, your business’s “busy season”, and the desired end goal of company-wide reviews. Below are a few common methods:
- Annual review– Conducted once a year, this method is most common among organizations. Statistically, annual reviews are the least effective method used if there are no continuous feedback practices in place. If the organization is relying on the annual review as the only conduit for performance discussions, it will yield little to no positive results and in some cases, decreased performance.
- Bi-annual review– This cadence means appraisals happen every 6 months. While more effective than the annual review, ongoing feedback conversations are still highly recommended.
- Quarterly review– Beneficial for industries such as Sales, these reviews are typically delivered at the end of each quarter and are often more focused on time-sensitive objectives and goals. Due to their frequency, quarterly performance conversations are more casual.
- Check-ins- The check-in method entails scheduled, frequent, and brief performance conversations between employees and managers where both parties “check in” as opposed to a formal, written review. Although check-ins are a valuable best practice for performance management, they should not be used as a substitute for formal reviews. The reason behind this is that check-ins lack a reliable method of evaluating performance.
How To Conduct Performance Reviews
Through years of experience in various industries and with top HR professionals, WorkDove has compiled a list of best practices for executing a performance review that is encouraging for the employee, informative for the manager, and strategic for the growth of the business.
- Clearly define objectives and behaviors. As the saying goes, clear is kind. Consider components like job descriptions, quarterly goals, and the company vision statement when creating clearly defined performance objectives for employees. Set clear expectations for workplace behaviors that are aligned with the mission statement. Definitions of metrics and behaviors ensure a holistic assessment that highlights areas for improvement and rewards good performance.
- Conduct an alignment meeting. Managers should allocate time prior to the performance review cycle to explicitly share expectations with their employees. Ideally, every individual metric and behavior is reviewed as a way to proactively engage employees and avoid confusion or misalignment during or after the review process.
- Engage in continuous, ongoing feedback. As mentioned earlier in this article, continuous feedback in the form of brief check-ins is a recommended way to lead up to the formal review. The purpose of frequent check-in meetings is to address what’s working well, what isn’t, and assess individual alignment and satisfaction.
- Calibrate review scores. Once high and low performers have been identified, consider calibrating review scores. While some managers may naturally give out 5-star reviews, others may feel that 5-star reviews are unrealistic. The point is that evaluation styles vary greatly so it is important to investigate final scores by comparing and contrasting both group and individual review results.
- Leverage a performance management tool. Utilizing performance review software is not a requirement for effective reviews but it certainly makes the process faster and more efficient. Digital tools like WorkDove alleviate issues of lost paper trails, management changes, and create the ability to house helpful historical information.
Phrases To Avoid During A Performance Review
When it comes to effective communication, it’s best to steer clear of using words like ‘always,’ ‘never,’ or ‘every time.’ Employee actions are rarely this black and white. The use of hyperbolic language can be off-putting and may deter employees from being open to coaching and personal development from their manager.
Phrases such as “Great work!” or “Well done” appear to be complementary but do not contain any real benefits. Employees crave clear direction, and specificity in performance review phrases is no different. Indicating the reason why the manager believes great work was done or describing in detail what the employee could do better in the future is the difference between coaching and managing.
When the manager’s evaluation of employee performance differs from the verbiage used in performance review phrases, it leaves the employee stuck with no path forward. For example, if a manager scores the employee as ‘Meeting expectations’ but the appraisal comments say things like, “Excellent job on this project! Keep up the good work!” the employee will leave puzzled and unsure how to achieve an ‘Exceeding expectations’ score.
Performance review phrases should break down manager expectations into simple wording. Always be sure that final scores mirror the manager’s talking points so employees know exactly where they stand and what definitive actions need to be taken.
Performance reviews that foster employee growth and increased productivity are an indication of strong performance management practices. When reviews are aligned well with the mission and vision, employees grasp how their individual efforts influence the organization’s success.
In tandem with ongoing, continuous feedback, a performance review is a tool used to fuel the personal and professional growth of employees and managers. Utilizing software like WorkDove ensures the appraisal experience is simple to use and promotes business results through engaging, values-driven coaching.