Michael is a human resource consultant with Insperity. He specializes in team building, employee engagement and performance improvement.
Performance reviews are a critical part of employee development and of business. By providing effective performance reviews annually, managers can help their teams grow and improve their productivity.
However, many managers report their organization’s performance review system does not produce the results they want. In 2021, Gallup found only 14% of employees strongly feel performance reviews inspire them to do better. Meanwhile, 95% of managers said they are not satisfied with the review process.
That means many organizations could be leaving a significant growth opportunity on the table. Leaders should keep in mind best practices for performance reviews, like having conversations throughout the year, setting goals and expectations, gathering feedback from colleagues and training managers on how to conduct reviews.
Treat performance reviews as a yearlong process.
It is typical for businesses to review employees on a quarterly, biannual or annual basis. The more frequently conversations about performance take place, the better. Not every conversation about performance must be formal.
In fact, the word “performance” does not need to be explicitly mentioned for employees to improve theirs. Managers can check in with their employees and offer praise or gentle constructive criticism during weekly or biweekly one-on-ones. When projects go smoothly, managers should let employees know they hit the mark. When employees struggle, managers can acknowledge the challenge and help employees learn from those obstacles.
Set goals and expectations.
By establishing a goal for employees to strive for, organizations can help them stay motivated and focused. It is crucial that goals be tied to the organization’s annual strategies and objectives. At the start of every review cycle, managers and employees should collaborate on goal setting. It is important that employees buy into these goals and that the goals evolve along with business conditions. After deciding on reasonable expectations, managers can track their team’s progress and share weekly or monthly status updates on progress toward goals.
Goal setting can be especially helpful if employees struggle to accept the basis of their performance review, good or bad. By seeing they have achieved their benchmark, young or self-doubting employees can gain confidence. On the other hand, an overconfident employee may need to see in numbers that they have fallen short of their target. The use of data in performance reviews also reduces the risk of unconscious bias from managers, increasing objectivity and fairness.
Collect feedback from the entire team.
Managers have powerful insights into the functioning of their teams. However, they are not always able to observe their teams’ collaborative efforts. Sometimes, one employee may quietly shoulder more of a team’s workload without notice, by no fault of their managers. It can also be the case that one employee does not match the efforts of their teammates, who feel uncomfortable saying so without being asked. It is critical employees are provided with proper training to ensure they are proficient in mitigating risk while delivering quality input.
Feedback from colleagues is an effective solution that gives a fuller picture of an employee’s performance. Managers can invite colleagues to share input, encouraging transparent and honest feedback. Colleagues will often highlight an employee’s strengths and identify weaknesses a manager may not observe themselves.
Train managers on how to review.
Receiving a performance review is often uncomfortable, but giving a performance review can feel equally unsettling for many managers. Especially for tight-knit teams, managers may struggle to deliver constructive criticism to employees they consider friends or top performers. Some managers may have the opposite problem, unable to recognize the strengths of an employee whose performance needs improvement.
Organizations can support managers by training them in how to offer feedback in a calm and supportive way. Going into a review, managers should understand how to structure positive and negative feedback, how to maintain a positive tone and how to discuss the employee’s future. Understandably, employees may react strongly to reviews at times. It is important to acknowledge the employee’s feelings and explore their concerns to confirm the review took place in a professional, compassionate and fair manner.
By providing checkpoints throughout the year, establishing goals ahead of time, collecting input from colleagues and training managers effectively, organizations can turn their performance review process into a strategy for growth and success.
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