Putting a new performance management system into effect can be difficult. That’s especially true when the majority of managers and employees dislike performance reviews. But whether you’re pro-performance review or think they’re a necessary evil, odds are you’ll have some involvement in performance reviews throughout your HR career.
Building a performance system that actually improves employee performance and engagement starts with the understanding that performance conversations must address both measurement (looking back) and development (looking forward). Most companies fail by focusing too much on the former and not spending enough time investing in and developing their workforce’s strengths and learning & development.
Looking to incorporate measurement and development effectively into your company’s performance review process? We’ve created five key steps that any organization can implement to strengthen the efficiency of its performance process. Here’s your step-by-step guide to ensuring your organization gets the most out of performance reviews:
Step 1: Goal setting
Building effective goals depends less on what goal-setting methodology you use (SMART goals, OKRs, and KPIs are all great) and more on whether you make high-level organizational goals visible and clear to all employees. This not only increases connection and alignment, but it helps teams and individuals better understand how their roles impact the overall success of the business, which is proven to engage and motivate employees.
Also, giving employees a place to store, track, and revisit their goals increases accountability and makes employees more likely to achieve success. It doesn’t matter whether you use a performance management software like Culture Amp or just a Google Sheet to track goals – the act of writing them down alone is enough to motivate employees and increase accountability.
Step 2: Quality feedback
While effective feedback can be a valuable tool to help improve an individual’s performance, ineffective or biased feedback can often do more harm than good. Only 1 in 3 employees believe their performance reviews are fair, which can contribute to employee dissatisfaction and distrust towards performance reviews. To bring constructive, unbiased feedback to their employees, businesses can share perspectives beyond just an employee’s manager. With 360-degree feedback from an employee’s teammates, peers, and cross-functional colleagues, you’ll get complete visibility into an employee’s work and share fairer, actionable feedback that can help an employee grow and improve.
Step 3: Manager driven
Any company’s performance review process will fail without the buy-in and support of its managers. That buy-in starts with reminding managers of the benefits of performance conversations, as well as arming them with the right tools, training, and resources. Giving them everything they need to provide fair, accurate, and consistent reviews can change their mindset about reviews and lead to more effective performance conversations that benefit both your employees and your business.
Step 4: Self-reflections
Self-reflections or assessments require individual employees to reflect on their performance and think critically about their strengths, accomplishments, and areas for improvement. These pre-review assessments help employees become more aware of their own feelings towards their performance, goal achievement, and impact on the business. It also can prepare them for what might be said in a review and help employees feel they have a say in the conversation, rather than just being “told” about their performance. That helps earn their buy-in before they even have the review conversation with their manager.
Step 5: Holistic review
To be a successful HR leader, you need the right systems and processes in place to gain a bird's-eye view of all your employee performance ratings. This can help you ensure performance standards are consistent across the organization, making it easier to map talent, review compensation, promote employees, and more.
According to the Organizational Justice Theory, organizations need three core components to gain a holistic view of performance: process, interactions, and outcomes. When these three factors are properly applied, organizations can expect to see significant improvements in
employee engagement, growth, and performance due to increased transparency, clarity, and trust. When the review process is fair and consistent, and performance conversations are done well, employees are more accepting of the overall review outcome, even if it wasn’t what they’d expected.
Improving performance reviews benefits your employees and your business
Performance reviews are an investment in your employees’ growth and a crucial component of building a culture of responsive, engaged people. Incorporating these five steps or checking out our latest guide, “Simplifying Performance: 5 steps for implementing a system that actually works,” for more tips and tricks that can help you improve your performance process for both your employees and your business.