By Jessica Stitz, MBA, SHRM-SCP
Most employees, leaders, and HR professionals rate their performance management process as a “Needs Improvement.”
Ask yourself: Could your performance management process be driving your people away?
Recently I was leading a performance management training with an entire organization, and I asked the class a question: “who gets nervous when giving or receiving a performance review?”
The majority of the room raised their hand. Some employees even admitted they would get so anxious before a performance review they would think about quitting their job because they had such negative experiences in the past. The CEO of this organization was shocked because they had no idea that most of their employees felt very anxious about the process and conversations.
Unfortunately, this is common in most organizations as most employees, leaders, and HR professionals rate their performance management process as a “Needs Improvement.”
The performance management process this organization was using was a once-a-year performance evaluation where people had no idea what to expect going into the evaluation meeting. Leaders would save up everything they had throughout the year for this conversation, or they would fall into the recency effect and cover just what happened in the last month.
The recency effect works out great for an employee who had a great last month, but it doesn’t work out well for employees who performed really well for 11 months and had a project go the wrong direction this past month.
The other part the employees dreaded about the process was the long, cumbersome evaluation form that many employees avoided filling out until a leader had asked them to complete it several times.
You may be thinking that this organization should just do away with this process altogether since everyone views it so negatively. But, our thought is no—or at least not yet— until we can help them create a culture of feedback and growth.
Plus, the employees in this organization really do want feedback and have been asking for more—they just don’t want it once a year in this cumbersome, stressful process.
Our goal with performance management is to make sure we are focused on the purpose and not a cumbersome process. If done right, performance management can drive engagement and productivity. And if done wrong, it can have the opposite impact and cause disengagement and even lead people to leave the organization.
Keep reading to see the 8 ways we helped this client improve their performance management process and better their overall workplace culture!
1. Simplify and streamline
“Clear is kind, and unclear is unkind.” — Brene Brown
Our first step with this organization was streamlining and simplifying everywhere we could. We moved the evaluation form from a five (5) point scale to a three (3) point scale and provided definitions because we wanted to make the form as simple and straightforward as possible.
Each level is very clearly defined and offers less ambiguity and subjectivity for leaders categorizing an employee’s performance. Many people get hung up on whether they are very satisfactory or outstanding and what the difference is, which is hard for leaders to articulate. So, we eliminated it.
You may be asking yourself, should we still be utilizing ratings at all? We still feel it is helpful with this organization since they are still developing the tools to communicate clearly how they view another employee’s performance. As Brene Brown says, “Clear is kind, and unclear is unkind,” and we feel ratings help to provide clarity.
We are now only rating the 10 most important areas of their performance that really impact the organization instead of the 25 areas they were previously rated on. This creates a greater focus on the 10 areas such as client-centric orientation, teamwork, and collaboration.
2. Leaders as coaches, not critics
Next, we discussed with leaders their part in the performance management process and evaluations.
A leader should be a coach, not a judge. If a leader judges an employee’s performance, the employee will feel the leader is just there to criticize their work and anything they did wrong. We have all had one of those leaders, right? This leads to employees avoiding any type of feedback conversation with the leader or seeking advice.
If a leader acts as a coach, then employees will feel like the leader is invested in them and their growth and development. Coaching an employee shows an employee that the leader cares about them. When an employee knows the leader cares, they are much more likely to engage with the leader, listen to the leader, and be more productive. Think about a leader that cared about and invested in you. You worked harder for them and valued their feedback, didn’t you?
3. Be future-focused
We also recommended that leaders keep the evaluation conversation focused on the future. Evaluations are a reflection of last year’s performance, however much of the conversations should be forward-facing.
If an employee is struggling in an area, yes, it should be discussed, but most of the conversation should be focused on how to improve going forward. That person can not do anything to change the past, but they can control the future.
4. Provide feedback more often
Probably the biggest takeaway this organization had is that these types of conversations shouldn’t take place once a year.
If leaders are waiting until the end of 12 months to tell someone how they are viewing their performance, it is too late. The employee could have made significant changes over the 12 months if they had the feedback sooner. Plus, the employees didn’t know where they stood at all during the year.
During our time together, one employee said, “I just don’t know if going into this conversation if I am going to be fired or get a promotion.” Now, the organization is beginning monthly, one-on-one conversations as well as doing the performance review process every six months.
5. Gather feedback
Gathering feedback from an employee’s peers or other people they work with gives a more holistic view of how someone is actually performing.
There is simply no way for a leader to be able to know how an employee is performing in all areas because they can not be around all the time.
Gathering feedback from an employee’s peers or other people they work with gives a more holistic view of how someone is actually performing. For example, a leader might only see that a sales employee is meeting or exceeding their targets every month, but what they don’t see is that they are meeting those targets at the expense of other employees because they are stealing other employees’ clients.
The opposite could be true also. For example, a salesperson might not be meeting their sales targets because they are busy helping their colleagues and the product development team make significant strides. Therefore, it is really important for leaders to gather feedback and not just focus on their perception of the employee’s performance.
Employees want to know that they are being rated fairly. Some leaders are naturally harder raters, while other leaders will give everyone “exceeds expectations” scores. This creates inconsistency across the organization as well as a perception of unfairness.
One of the best ways to create more fairness and equity in ratings is to have the leadership team draft their employee ratings and then hold a calibration meeting where they look at all their employee ratings together and talk about why they are rating their employees the way they are.
I have seen this work really well, and it creates much more fairness and equity. It also eliminates some of our bias and holds leaders more accountable for how they are rating their employees.
In one of these calibration meetings, another leader might ask why someone is rating an employee low in one area because they have only witnessed that employee doing exceptional work in that area. Then, other leaders can collaborate on those ratings based on how they are seeing others rating their employees and the reason why.
7. Open communication
We trained the entire organization at the same time, so leaders were receiving the same information employees were. This ensured they each understood their role in the process and could hold each other accountable.
We told employees this process is meant to benefit them. So, if they want more feedback or need further information, they are empowered to ask for it. In this environment, they become the driver of their own development and performance, and their leader is there to support and guide them.
8. Separate performance from the compensation conversation
There’s no way around it. If you combine a performance evaluation conversation with the annual increase conversation, the employee is only going to focus on one thing: the increase in their compensation.
They will also not be as open to constructive feedback because they know if they accept that they are less than exceeding expectations, it will affect their pay increase. If you take the compensation increase out of the conversation and handle increases at different times, it will be much more beneficial to the employee and the performance evaluation conversation.
Employees will be more open to hearing your constructive feedback because they will be focused on intrinsic motivation and not the extrinsic motivator of money.
After checking in with this organization a few months after incorporating these changes, everyone feels more informed, they are collaborating more, engagement appears to be increasing, and the leaders are seeing productivity increase.
So, does your performance management process need to be revamped? If so, we can help.