How effective are performance reviews and what is the cost to organizations of an ineffective performance review process?
What value do individuals and organizations actually get out of these processes?
How much time do organizations lose putting systems into place and then trying to enforce them?
How much time do leaders waste struggling to complete these reviews?
Most people see performance evaluations as a necessary evil that they need to get through (akin to filling out tax forms). They usually get bumped to the bottom of the “to do” list and sometimes never get done at all.
Performance review meetings are usually uncomfortable and unproductive.
From our experience, the 8 most important factors in an effective, value added review process are:
1. Context - Performance reviews are a real opportunity to increase organizational performance and impact the bottom line. A well done review contributes significantly to managing our most important assets, and to their wellbeing and growth. Often people get fired, have their responsibilities decreased or are gossiped about vs. being told what they could do better and how, through very specific performance feedback in their reviews
2. Organizational relevance and focus –The content of the review should be targeted to strategy and customized to culture. Often organizations use standard dimensions of leadership that have not been targeted towards executing on their key strategies and may not add tremendous value to their specific culture. Focusing in this manner directly impacts individual and organizational performance.
3. Individual relevance – For recipients, it is motivating to link the areas of growth to their career path, vision and passion.
4. Balance & Manageability– Focusing on how to leverage a few key strengths reinforces what recipients is doing well and enables the organization to continue to benefit from these. Keeping the areas for improvement to a few vital areas that will make the biggest difference in performance allows recipients to focus their efforts and build their skills in a sustainable and mindful manner.
5. Approach – The tone and overall intention are key aspects that differentiate a productive review process. Approaching the recipient with generosity versus criticism can transform the process and results. Ensure that your goals are to share information and to help the recipient grow and develop professionally, not to vent or complain. Remaining fact-based and focusing on concrete improvement, rather than finger pointing and blaming, allows recipients to hear the feedback in a safe space and leaves room for them to think about how to improve vs. needing to defend themselves. Another important component of a successful approach is to only suggest areas of focus that you truly believe recipients can accomplish. If you don’t believe in their potential to deliver in this area, improvements are very difficult to achieve and tend to go unnoticed.
6. Specific and Actionable – Be as specific as you can with concrete examples and actionable items. Ensure that there is a common understanding of expectations and agree on how improvement will be recognized and measured.
7. Regularity & Follow up – It is difficult to impact performance with an annual review. People should get regular reviews and these should be followed up on as an agenda item during regular meetings. Maintain open and informal two way communication to address issues as they arise.
Done in this manner the evaluation process can become a very rewarding experience for both parties. The recipient can experience rewarding growth, increased performance and a supervisor who cares enough to help them succeed. The reviewer can experience real satisfaction by:
- increasing productivity and performance
- contributing in a meaningful manner to growing others
- increasing staff retention
- building a talent base for the organization