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What We Think

Where are Your Employees Going?

Do your employee performance reviews actually improve employee performance?

Or employee engagement?

Do you and your employees look forward to discussing their reviews?

If you are laughing hysterically right now, then you are among the 58%* of managers who believe that performance evaluations drive neither high performance nor engagement. So why do you spend the time and emotion conducting reviews?

Few managers, and even fewer employees, like performance reviews. Looking backward at how an employee has performed in the past year is time-consuming, nerve-wracking, and rarely a bonding experience. Changing that dynamic and making reviews both less stressful and a means to drive better performance and create greater engagement is key. Sounds good, but how do you do it?

“It’s a culture change,” commented one of our clients.

Exactly.

Numerous companies have begun trying different approaches to performance reviews. In our experience, two changes have the greatest positive impact:

  • Making real-time, regular feedback and development integral to every manager’s job.
  • Focusing periodic reviews on the best role for an employee in the future, not on past performance

When real-time feedback becomes part of a manager’s job, it also becomes part of the manager’s evaluation. And it changes the culture; what managers do, how they are evaluated, how they communicate, how they interact with their teams…all of these behaviors, and more, change.

Performance feedback is not incidental to a manager’s job. It is critical. We have found that weekly reviews by managers help to make small course corrections and keep a focus on where a team, or individual, is going. What needs to be accomplished this week? What needs to be done differently? What actions, interactions, and activities are on the right course?

Managers also need to document their conversations with team members, not in formal evaluation forms, but in running documents. For some, something as simple as a shared document works both for discussion and historical purposes. The ongoing documentation also helps to distinguish short-term, or one time, problems while making it easier to spot on-going areas of strength and interest.

Switching the focus from improving an employee’s weaknesses to building on an individual’s strengths is a key variant in driving higher performance, and often a major shift in culture. After all, most managers are promoted because they are subject matter experts, not great leaders. But a culture that rewards great management drives better business results.

Gallup has conducted several long-term studies to determine the factors distinguishing high-performing teams. Organizations that enable employees to learn their roles more quickly and “do what (I) do best every day” experience both lower turnover and higher quality work. In one multi-year study, those groups whose members strongly agreed with that statement were 50% more likely to have low employee turnover and 38% more likely to be productive. While strengths-based cultures create more effective and engaged workforces, only about 25% of employees strongly agree that their manager focuses on their strengths or positive characteristics.

So as managers document at-least-weekly discussions and performance targets, they also need to keep track of what employees do well. Those perceptions then inform annual reviews. The key question in annual reviews is not “how well is Joe doing?” but “do I want Joe on my team?” Deloitte, in an April 2015 Harvard Business Review article, listed four main considerations that they use to evaluate employees each year:

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [on a five-point scale from “strongly agree” to “strongly disagree”].
  2. Given what I know of this person’s performance, I would always want him or her on my team [on a five-point scale from “strongly agree” to “strongly disagree”].
  3. This person is at risk for low performance [yes-or-no].
  4. This person is ready for promotion today [yes-or-no].

These annual performance reviews require much less time to prepare, and the discussion focuses on the opportunity for the employee in the future.

No single employee evaluation process works for all organizations. Your approach needs to be customized for your business, and the implementation needs to consider the impact on the culture you want for your organization. The goal is to look out the front windshield not through the rear view mirror as you think about your employees.

Your employees and your business will thank you.

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