Rethinking Performance Reviews
More frequent reviews may improve performance
If you’re evaluating your employees’ performance only once a year, you’re missing out on many opportunities to guide and motivate them. Your team members want to hear from you as often as needed about where they are excelling or should strive to improve. They also want regular reminders that they’re an important and valued part of your organization.
Even if annual performance reviews are a long-standing tradition at your firm, you may want to rethink how often you offer feedback directly to your employees. Performance reviews, conducted formally or informally, are a useful tool for finding out more about the needs and goals of your team.
They also provide an opportunity for you to clarify objectives, review expectations, and identify where, how and why employees may need additional support.
Without regular feedback from you and the chance to make small-scale course corrections, your staff members are not likely to recognize the need to improve their performance. They may not be motivated to stretch their abilities. They also may struggle to see how their contributions help make a difference. Also, waiting until the annual performance review cycle to bestow praise on employees who have earned it can undermine morale — and potentially, hurt your firm’s retention efforts.
A new approach to suit new business demands?
Another reason your company may want to re-evaluate the value of the annual performance review process is that you may be operating differently than you did in the past. If your firm is like many businesses, it may no longer have clear annual cycles; instead, it is driven by short-term projects. Rather than setting employee goals 12 months in advance, it may make more sense to come up with milestones for them to achieve throughout the year.
Keep in mind, too, that creating a continuous feedback loop doesn’t just benefit your employees. It can save you time once you adapt to the new process. You may find it’s much easier to fit in short, casual employee reviews sprinkled throughout the year than carving out one large chunk of time to prepare for and conduct formal performance evaluations for your entire team.
More than one-third (36 percent) of human resources (HR) managers polled for a Robert Half survey said their company is increasing the frequency of performance reviews. While 40 percent of respondents said these appraisals still happen annually, 28 percent report that they are conducted twice a year at their company and 10 percent said they take place quarterly. Fourteen percent of HR managers surveyed said their organizations conduct these reviews as needed.
If you decided to change the frequency of your performance reviews, make a point to rethink your overall process as well. Here are some strategies for success:
Make it a discussion
Remember that employees can find performance reviews — even informal check-ins — intimidating. That’s why it’s important to structure these meetings like two-way conversations. You want to share your feedback, but you also want to invite your employee to respond to it. You also want to create an environment where staff members feel they can be open and honest with you, too.
So, listen more and talk less. Instead of telling employees how they rated in certain areas and why they received the scores they did, turn the process upside down. Ask your workers to talk about their strengths and weaknesses and to offer suggestions for both personal and department-wide improvement. Be sure to listen for hints as to their level of workplace happiness and satisfaction.
Focus on the future
Instead of dwelling on past successes or failures in a performance review, focus on the company’s upcoming needs and how the employee fits into that big picture. For example, what technical training do your financial analysts need to make the most of the new cloud-based software your organization has implemented?
For your rising superstars, discuss mentoring and leadership training. Also, you may find these one-to-one meetings can help you identify candidates that are a good fit for the organization’s succession planning objectives.
During more frequent performance review meetings, you can help employees more clearly identify areas for professional growth, such as the need to enhance specific skills or learn new ones. Upskilling is especially important today as technology continues to change how we work.
Separate goal-setting and salary discussions
Many companies base financial rewards — annual or biannual bonuses, merit increases, retention bonuses — on formal evaluations. That doesn’t need to change, although you may want to consider separating that conversation from the feedback process. The performance review is a time to acknowledge employees’ strengths and discuss strategies for positive change and growth.
As a manager, your aim is to foster a healthy relationship with your staff and motivate them to do their best work, of course. But all too often, the annual performance review is counterproductive to that goal. Right or wrong, many workers dread these appraisals because they see them as a way for management to call attention to their shortcomings.
Consider upending this old-fashioned power dynamic by rethinking your approach to evaluating your team members’ performance. More frequent feedback for your staff and a less-structured format for delivering constructive criticism and praise can help keep your team focused on continuous improvement.
Andrew Murtagh is the Colorado regional vice president for Robert Half Technology, the leading provider of information technology (IT) professionals on project and full-time basis. Learn more by visiting www.roberthalf.com/denver.