Here’s an unfortunate reality: most of your employees hate their performance reviews. You may be tempted to attribute this attitude to personality differences or a lack of willingness to accept feedback, but research shows that’s not the case.
What this indicates is that today’s performance reviews are in major need of an overhaul. In this article, we’ll take a closer look at the current state of performance reviews, the factors that are contributing to their lack of success, and guidance on how to change the status quo.
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The status quo of performance reviews
When we look at the current sentiment around performance reviews, it doesn’t paint a pretty picture. Research shows that performance management is the most despised people process at organizations, with a net promoter score of -60. This means they’re more disliked than cable companies, internet service providers, and health insurance plans. This negative perception isn’t only held by employees, but by people at every level of an organization - from executives to HR teams.
Because of this, we see endless headlines calling for the “death” of performance reviews and highlighting companies that are ditching the performance review process. But is this really the right solution? If you look more closely at the research, it shows that people have less of a problem with performance reviews themselves. Instead, it’s that they don’t like their organization’s approach to performance management.
This indicates that it’s the culture around performance reviews that needs to change; not the tool itself. Because without the tool, you’re eliminating one of the only formal methods of giving feedback to and receiving feedback from your employees. Not to mention that many organizations tie performance directly to their recognition and compensation efforts. So if you know your organization is going to continue having performance reviews, you may want to start thinking about how you can change the status quo around performance reviews.
Why performance reviews aren’t working
What exactly isn’t working when it comes to performance reviews? While the answer may vary by organization, there are a few factors that usually play a major role in contributing to the lack of success around performance management systems. Here are three to consider:
Future of work
The workforce is rapidly changing. One of the biggest trends we’re seeing is the increasing fluidity of roles. Teams are no longer only comprised of full-time employees who have a single job within an organization. Instead, we see more freelancers and remote workers being brought in and people wanting to hold multiple roles within their company. 75% of Generation Z employees have even indicated that they’d be interested in having multiple roles in one place of employment. Unfortunately, the traditional performance review wasn’t built to accommodate this future of work - it was originally meant for the 9 to 5 worker with rigid organizational structures in place. And as the workforce continues to evolve, old-school performance reviews aren’t able to keep up and become a bad fit for most modern organizations.
When employees have a performance review, they expect it to be fair, accurate, and clear. Instead, surveys find that less than half of employees feel like the way they’re evaluated is fair or transparent. There are also a number of unconscious biases that, if left unaddressed, can lead to inaccurate reviews. As a result, employees feel frustrated because their expectations aren’t being met. They may also feel like they’re not being set up for success since they’re not receiving actionable feedback they need to improve.
The majority of employees and managers find performance reviews to be time consuming and stressful. So it’s no surprise then that an outdated approach to the performance process leads to feelings of disenchantment that can cause lower employee engagement and, ironically, lower performance. In fact, a study found that organizations that scored high on culture were 32% more likely to experience high employee engagement and 97% more likely to experience high organizational performance. This indicates that the culture around performance reviews can have a huge, positive impact on important KPIs.
How to change the status quo
It’s not easy to change the status quo around a process that has been around for ages. But we strongly believe that performance management has the potential to be improved and provide genuine value to both managers and employees alike. Below, we share a few tips that will not only better the performance review itself, but also the culture around performance management as well.
Build a culture of learning and growth
Performance reviews were historically seen as a transactional process to deliver feedback to employees. The focus wasn’t on the employee’s growth, but rather on having them “fix” things about their performance for the sake of the business. Today, that type of culture doesn’t align with the needs of the modern workforce. Instead, the focus should be on creating a culture of learning and growth, where employees are continuously receiving feedback - both positive and constructive - on their performance and using those moments as opportunities to grow in their careers.
A big way to change the culture around performance reviews is to upgrade the tools you use. This means finding a performance management platform that was built for the modern workforce and has the flexibility to grow with you. For instance, our performance product includes everything from goal setting to feedback to evaluations. And these functions aren’t static; For instance, when you create goals, you also have the flexibility to update them, note progress, and even align them to broader company goals. Regardless of which tool you select, always make sure your vendor has proof points that show the results they’ve delivered for other partners.
Facilitate employee voice and ownership in the process and outcomes
It seems odd to not have your employees involved in their own performance process, but that’s frequently what ends up happening. They’re given goals to meet and are merely told at the end of a performance year whether they met that goal or not. It’s up to the company leaders to ensure that the employee is involved throughout the entire process. This will help them better understand exactly what they need to do to succeed and feel like they actually have control over the outcomes.
Focus on fairness through transparency
As we mentioned above, employees frequently feel that the performance review process is unfair or hard to understand. There are many things an organization can do to improve this. Recognize that there are harmful biases that come up during performance reviews and do your best to mitigate the chance of them. Also make sure to transparently link employees’ goals to business priorities so they understand exactly where their contributions fit in and how the organization defines success.
Ensure your managers are respectful and supportive
The relationship between managers have with their employees can greatly influence their experience at work. That’s why it’s so critical to make sure managers understand how to be respectful and supportive throughout the performance review process. Don’t assume that they already know how to do this; Studies show that less than 30 percent of employees believe their managers are good coaches. Even with the best intentions, managers can easily miss common biases or give unhelpful feedback. That’s why providing them with accessible resources - such as trainings and documents - is key to helping them succeed with performance reviews.
You don’t have to sit idly by and watch your performance reviews unravel! While it’s not easy to change the status quo, it’s well within your control to change how performance reviews are approached at your organization and ensure your employees are getting real value out of this process.