The vast majority of organizations still use evaluations as a way to gauge the performance of employees, but their purpose is evolving. Whether you love or loathe the employee performance review, it seems like they’re here to stay. Which makes it all the more important to recognize and act on the areas for improvement. In this article, we’ll explore why it’s critical to invest in bettering the employee performance review and share eight evidence-based tips to help you take action.
You can improve your performance reviews
In defense of the employee performance review
While we fully understand the existing frustrations around employee performance evaluations, there’s a deeper issue at play. It’s not the performance review itself that’s problematic, but rather the outdated approach companies take to them. The reason why this distinction is important is that, at the end of the day, we fully believe that the benefits of having an employee performance review system in place greatly outweigh the negatives.
For instance, while evaluations alone aren’t going to improve performance, trying to help your employees grow and develop without a form of measurement is going to be highly ineffective. Not to mention that performance reviews can help you map individual employee goals to broader company KPIs, better understand the organization’s performance as a whole, and build your workplace culture around high-performing employees.
As you can see, employee performance reviews play a critical role in organizations. If you can find a way to improve the overall experience, you can reap all the benefits of this useful tool as well. Which brings us back to the question of: how can companies take a more modernized approach to and improve the employee performance review process? We share our best eight tips below:
Tips for a better employee performance review
1. Create a culture of ongoing feedback
The annual performance review receives a lot of criticism. However, it’s important to recognize that there are two different types of employee performance evaluations: one that looks backward and tries to understand a person's performance over time. And another that’s more forward-looking and focuses on using feedback to improve an employee’s performance in the future. These are two unique processes that have different goals.
As our CEO Didier Elzinga explains it:
“When people say annual reviews are passé, they’re realizing we need to separate the two different processes. It’s not necessarily passé to do an annual performance appraisal for the purpose of setting someone's salary....But you need to separate the salary conversation from the performance/coaching conversation, and the latter needs to happen a lot more than once a year.”
That’s why we encourage companies to create a culture of continuous feedback. This simply means establishing an environment where you have more frequent check-ins around performance, goals, and development. With this approach, the annual performance review doesn’t feel as siloed and employees go in having a general sense of what to expect from the conversation since they’ve been receiving feedback throughout the year.
2. Use the right phrases
Words matter - especially when it comes to employee performance reviews. It’s important to use the right performance review phrases during an evaluation to ensure that the feedback is clear, empathetic, and actionable. The last thing you want to do is share comments with your employees that are misinterpreted or don’t give them a clear way forward.
For instance, saying “The whole team feels stressed out by your behavior” is an unhelpful piece of feedback. This leaves the employee with a lot of questions, such as: “Did the entire team actually complain about me?” And “What behavior is stressing them out?” It can also make the employee feel siloed from the rest of their colleagues.
On the flip side, consider this strategic phrase: “my feedback is that you stop sending urgent emails late at night. You’re creating stress for the other team members outside of working hours, and it’s not a healthy habit.” This makes it clear what behavior is causing the stress, why it’s important to stop, and has the comment coming from a manager instead of pinning the responsibility on the team.
3. Be aware of biases
According to a recent study by the management consulting firm, Deloitte, less than half of employees feel like the way they’re evaluated is fair or transparent. Given this, it’s important to be extremely cognizant of common biases that can come up during the employee performance review. Primacy bias, for example, is one to be aware of. This is something that happens when managers focus on information learned early on in the relationship, such as first impressions, instead of actual performance.
Another common problem is using gendered language during the employee performance review. A study found that women's evaluations contain nearly twice as much language about their communal or nurturing style, such as "helpful" or "dedicated." Managers are also nearly seven times more likely to tell their male employees that their communication style is too soft while women receive 2.5 times as much feedback related to their aggressive communication style.
4. Train your managers
Performance reviews are a process that requires vulnerability from both employees and managers, which makes it important for the relationship between the two parties to be built on trust and transparency. While this may seem obvious, research has actually found that manager capability is one of the biggest stumbling blocks for organizations. That’s why companies should invest in training their leadership, especially when it comes to three areas: coaching, candor, and clearing barriers.
In other words, managers need to learn how to enable performance, have difficult conversations, and pave the path for their employees to do their best work. When companies support managers in these three ways, studies show that they’re 12% more likely to experience high individual performance.
5. Select the best-fit rating scale
Rating scales are often a necessary component of the employee performance review. They can help companies understand how their employees are performing to maximize growth and make it clear to employees what’s expected of them to get a raise, promotion, or move forward in their careers through objective measurements.
When designed properly, performance rating scales can help differentiate high performers from low performers, identify areas for improvement, and offer transparency in decision making. Research even shows that top performers can outperform the rest by over 400% – something you wouldn’t be able to identify without rating performance. However, they’re not one-size-fits-all, so it’s important to understand exactly what you’re looking for in your rating scale and customize it to your needs.
6. Learn the art of giving feedback
Giving effective feedback is a tricky art to master. But the good news is that there are always ways to improve. It may be helpful to think about feedback in two buckets: reinforcing and corrective. Giving feedback about the things you want people to continue and do more of is known as reinforcing feedback. And suggesting things you think someone should do less, or stop doing is corrective feedback.
Both forms of feedback can benefit from a few general guidelines, such as making sure to prepare your comments in advance and being mindful of timing. Also, it’s helpful to provide specific and actionable feedback to make it easier for your employees to digest. Remember that practice makes giving feedback a bit easier, so participating in a culture of continuous feedback will help you strengthen that muscle as well.
7. Link performance and recognition
Many organizations tie performance to recognition, compensation, and promotions. Given that an employee’s livelihood depends on the performance review, it’s critical for the process to be as fair as possible. In particular, it’s important to make sure your top-performing employees are getting the recognition they deserve so they don’t feel underappreciated for their hard work.
It’s also important for low-performing employees to understand their performance so they can receive the feedback and coaching they need to improve. Making sure the alignment between performance and recognition is as clear as possible will not only help employees contribute to the company’s success, but it will also keep employee morale high.
8. Choose the right tool
Finally, choosing the right performance tool can make a big difference to the employee performance review. Consider the most common pain points employees and managers have with old-school performance tools, such as their lack of flexibility, low accuracy, and rigid tracking systems.
Then look for a performance platform that is built for the modern workforce and addresses these problems. While the tool alone won’t fix all of your performance-related problems, it can be an excellent catalyst to set into motion all the other process changes.
Don’t give up on the employee performance review yet; You have the power to make small, but significant, changes that improve the overall process and deliver huge value to both your managers and employees.