The performance review’s demise has been the topic of much debate over recent months. An increasing number of organisations are shifting away from annual appraisals in favour of on-going, just-in-time feedback. Recent PwC research shows one in 20 organisations are planning to abandon formal performance reviews altogether.
A recent article in the Harvard Business Review, however, argues that traditional performance review systems still have their place. When Facebook, for example, surveyed its staff, 87% of employees voted to keep the formal system.
Fairness and transparency are two key reasons for not throwing the baby out with the bathwater, suggest the authors. Managers will still be making judgements about their people – and whether they should be promoted or given a pay rise – with or without any kind of formal system. The problem is if you take the structure away, the employee isn’t part of the process – and is completely in the dark about who is judging their contribution and how they are being measured.
So what can you do to make your performance reviews a valuable business tool and an engaging and productive experience for everyone involved?
1. Start with outcomes
The danger with performance reviews is that they can too easily become merely a box-ticking exercise. If you start by agreeing the purpose of the performance reviews with reviewing manager and their likely impact on the business, you’ll find it much easier to convince colleagues to get involved – and justify any resulting investment to the business.
Taking an outcome-led approach can also lead to more open conversations, where both parties have the opportunity to get really clear about objectives and aspirations. The result should be more meaningful data that you can act on, managers that have a clearer understanding of the motivations and ambitions of their staff, and better engaged employees who are much more likely to perform at peak and go the extra mile when needed.
2. Make performance reviews easy
Even with commitment, performance reviews can still be at the top of the list of tasks managers and HR least want to do. It seems to be associated with seemingly endless form-filling and admin, and little or no insight at the end of the process.
Thanks to advances in technology, the latest performance management software is cost effective. And it’s easy to navigate, making the information people need available at the click of a mouse. The system can’t have the conversation, but it can alert managers when appraisals or check-ins are due, provide standardised templates for inputting information, and offer a central place where discussions and agreed actions can be recorded. If you haven’t looked at the market for some time, you may be pleasantly surprised at what is now available.
3. Provide training for managers
It’s easy to assume that managers will automatically ‘know’ how to hold an effective performance or career conversation. The reality is that many managers struggle with giving feedback, setting objectives and motivating their people whilst also managing expectations.
Don’t throw your managers in at the deep end. Many will have been promoted because of their technical skills and don’t necessary have the soft people skills needed to get the best out of their teams. Provide training to give them the confidence to have open, constructive conversations with their people and to tackle poor performance head-on when necessary.
4. Be transparent
In a recent CIPD survey, only 39% of employees felt their performance management process was fair. This isn’t really surprising, given that in many companies, processes are applied inconsistently. How highly people are rated then depends on variable such as: how much value the manager places on the process and whether they are a ‘soft touch’ or a ‘tough cookie’.
Think about what you can do to make your performance management process as fair and transparent as possible. The HBR article reports that at Facebook, for example, peers write evaluations as well as managers to provide a more rounded picture, and reports are examined by specialists to pick up any unconscious bias that may have crept in.
5. Focus on the future
Is your performance management process stuck in the past or looking ahead to the future? Traditionally, appraisals tend to look back at how an employee has performed during the previous year. But in a fast-moving, constantly changing environment, priorities shift constantly, new skill needs emerge overnight – and what happened last year (or even last month) is largely irrelevant.
Try making the focus of appraisals more about what the business needs for the future and how the individual can best use and develop their skills and competencies to meet those future challenges.