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Why Companies Will Never Get Rid of Performance Reviews

Face of man standing against a black board with the words Review Time written on it.

Love them or hate them, per­for­mance reviews are here to stay — but they don’t have to be painful

Just the idea of a per­for­mance appraisal is enough to evoke feel­ings of dread in the aver­age employ­ee and man­ag­er. Man­agers and employ­ees alike tend to regard appraisals with pure appre­hen­sion, for a num­ber of very gen­uine rea­sons. They’re too bureau­crat­ic, they’re too infre­quent, they aren’t effec­tive, they take up too much time and they are rarely mean­ing­ful. You might have won­dered, on more than one occa­sion, if you would be bet­ter off elim­i­nat­ing per­for­mance reviews altogether.

Tempt­ing though this idea may be, rid­ding your com­pa­ny of per­for­mance man­age­ment process­es entire­ly is rather like throw­ing the baby out with the bath­wa­ter. A num­ber of organ­i­sa­tions have tried this and found that staff per­for­mance has dete­ri­o­rat­ed. Your per­for­mance man­age­ment sys­tem might not work as it is, but rather than throw­ing in the tow­el, there are prac­ti­cal steps you can take to make per­for­mance dis­cus­sions mean­ing­ful in your organisation.

The fact of the mat­ter is, com­pa­nies need per­for­mance reviews — just not in the way that they have been done in the last 20 years. HR and senior man­age­ment need to know how employ­ees are per­form­ing across the organ­i­sa­tion and what per­son­al devel­op­ment is required; and employ­ees need feed­back on how they are doing. The good news is that the per­for­mance review is improv­ing and evolv­ing, to the ben­e­fit of both man­ag­er and employee.

Below are just a few ways you can adapt your per­for­mance review process to make it more effec­tive and mean­ing­ful for all involved.

Have more reg­u­lar, but more infor­mal, per­for­mance check-ins

If you hate per­for­mance reviews, it might sound coun­ter­in­tu­itive (not to men­tion, com­plete­ly unap­peal­ing) to improve the sit­u­a­tion by intro­duc­ing more of them. How­ev­er, reg­u­lar, mean­ing­ful month­ly check-ins are actu­al­ly far more time effi­cient and use­ful than a sin­gle annu­al appraisal. Com­pa­nies such as Microsoft and Deloitte have arrived at this assump­tion and now enjoy a range of ben­e­fits, includ­ing improved reten­tion, increased employ­ee engage­ment and bet­ter performance.

Annu­al appraisals try to get too much accom­plished in one sit­ting. There is sim­ply too much to dis­cuss: goal com­ple­tion, achieve­ments, issues with exist­ing process­es, goal set­ting for the year ahead, train­ing and devel­op­ment, and more. It makes much more sense to car­ry out infor­mal month­ly dis­cus­sions, which will keep every­one updat­ed on exist­ing progress, and it will also give the man­agers an oppor­tu­ni­ty to address per­for­mance issues as soon as pos­si­ble. What’s more, this is some­thing employ­ees increas­ing­ly want. Employ­ees want to build a rela­tion­ship with their man­ag­er, and they want fre­quent feed­back. In fact, 72% of employ­ees under 30 would love to receive dai­ly or week­ly feed­back from their man­ag­er.

Elim­i­nate per­for­mance rat­ings and stack ranking

Our under­stand­ing of human per­for­mance has moved on, and neu­ro­science research has made it increas­ing­ly clear that per­for­mance-rat­ings sys­tems all too often neg­a­tive­ly impact an employ­ee’s moti­va­tion and pro­duc­tiv­i­ty. Not to men­tion, per­for­mance rat­ings are gen­er­al­ly far more sub­jec­tive in nature than we believe them to be, which seri­ous­ly calls their effi­cien­cy into question.

On top of this, stack rank­ings sys­tems have been increas­ing­ly falling out of favour. Gen­er­al Elec­tric, the com­pa­ny famous for intro­duc­ing the noto­ri­ous rank-and-yank sys­tem, have elim­i­nat­ed the tool as part of their per­for­mance man­age­ment sys­tem. Microsoft and Ama­zon have also elim­i­nat­ed rank­ing, for good rea­son. They’re time-con­sum­ing, sub­ject to bias and ter­ri­ble for employ­ee morale. There are more effec­tive, future-focused meth­ods to assess per­for­mance than per­for­mance rat­ings that can be incor­po­rat­ed into your per­for­mance man­age­ment system.

Keep per­for­mance dis­cus­sions future-focused

Per­for­mance dis­cus­sions should be about improv­ing future per­for­mance, rather than plac­ing a great deal of focus on past mis­takes and poor behav­iour. It’s impor­tant we learn lessons and grow as a result, but spend­ing per­for­mance dis­cus­sions berat­ing employ­ees for their errors isn’t pro­duc­tive or helpful.

Instead, dis­cuss what the employee’s future goals are, and what steps can be put in place to ensure those goals are met. If employ­ees require train­ing and devel­op­ment, man­agers should make sure they are pro­vid­ed with all the tools and assis­tance they require. Ulti­mate­ly, this will result in greater lev­els of moti­va­tion, and your employ­ees won’t dread their reg­u­lar one-on-ones.

Empow­er your employ­ees to take con­trol over their own performance

Inde­pen­dence and auton­o­my have quick­ly become the top work­place perk and one of the lead­ing HR trends of 2017. It’s very sim­ple — employ­ees who feel they are respect­ed and trust­ed to per­form their work on time and to a high stan­dard will be more moti­vat­ed, loy­al and pro­duc­tive. Micro­man­age­ment is coun­ter­in­tu­itive, as is rigid­ly attempt­ing to con­trol the method by which the employ­ees choose to work.

Con­sid­er giv­ing your employ­ees author­i­ty over their own SMART objec­tives. Ask them what moti­vates them, and what restricts their per­for­mance. In your per­for­mance reviews, make it clear that your employ­ees are impor­tant to the growth of the busi­ness, and they are in charge of their role and their career pro­gres­sion. Even­tu­al­ly, employ­ees will demon­strate greater pride and con­fi­dence in their work, and they’ll feel bet­ter able to take the driver’s seat dur­ing per­for­mance discussions.

Make use of per­for­mance review soft­ware to facil­i­tate the whole process

The prin­ci­ples of con­tin­u­ous per­for­mance man­age­ment (reg­u­lar per­for­mance reviews and fre­quent feed­back) have been proven to increase employ­ee engage­ment and pro­duc­tiv­i­ty, but they require the right tools to work effec­tive­ly. For a busy organ­i­sa­tion, this can pose a prob­lem, par­tic­u­lar­ly if the soft­ware and tools they have in place don’t sup­port this way of doing things.

Using cloud-based per­for­mance review soft­ware can help you organ­ise and mon­i­tor reg­u­lar dis­cus­sions. It can facil­i­tate real-time feed­back, plan and track SMART objec­tives and gives HR and senior man­age­ment vis­i­bil­i­ty of per­for­mance activ­i­ty through­out the organ­i­sa­tion. On top of this, well-designed per­for­mance man­age­ment sys­tems such as Clear Review, have inter­faces that are incred­i­bly intu­itive and easy to use, mean­ing that they don’t require any train­ing, so intro­duc­ing them into your organ­i­sa­tion is quick and painless.

If you’re look­ing to rev­o­lu­tionise your per­for­mance man­age­ment sys­tem, get in touch with our friend­ly team at Clear Review and book a per­for­mance man­age­ment soft­ware demo.