When it comes to performance management, it’s easy to get wrapped up in the numbers. Employee participation rates, satisfaction scores, number of goals created – the list goes on and on. But, while it’s good for HR teams to be metrics-driven, sometimes it comes at a cost, as it’s easy to forget that behind each number are employees with hopes, dreams, and career ambitions.
Performance reviews are an opportunity to boost performance management participation and satisfaction scores, but there are two more important goals: measuring performance and developing your people. Development is the most valuable element of performance reviews, because when individuals improve their personal and professional skills, they also become better teammates and employees.
Ensuring managers are discussing development with their direct reports during annual reviews is just the starting point. In order to be effective, your overall performance processes need to be fair and clear, while also encouraging your employees to make a difference and grow. You can humanize your performance process and win employee support by appealing to four key psychological needs – fairness, certainty, progress, and meaning.
At Culture Amp, we’ve found that perceived fairness is one of the strongest indicators of employee engagement. When employees understand and trust your review processes, they are more likely to accept positive and negative outcomes. On the other hand, if they deem the process unjust, they are more likely to become bitter and demotivated about their work and the company.
Building fair and transparent performance processes benefits everyone. When your employees understand how they’re being rated, who is reviewing their performance, and why these conversations are happening, they will be more willing to participate and listen to your feedback. Inconsistent or unclear processes can undermine employee trust, while unconscious bias and unfair ranking can foster resentment among your teams. Let employees know what your business is doing to maintain fairness in reviews, like using 360° feedback or review calibrations, so they understand and trust the process is objective.
Certainty allows us to make informed decisions in the present and plan for the future. But, when uncertainty creeps into our minds, we often fill in our knowledge gaps with the worst-case scenario. How can you keep your employees from writing their own narratives about your performance processes? The more information you give them, the less likely they will be to fill in the gaps with alarm-raising assumptions. For example, if your employees don’t know if compensation will be discussed in reviews, rumors could spread through your organization that “no raises or promotions will be given this review cycle.” Nip such chatter in the bud by clearly outlining expectations for the review cycle and the overall performance management process.
Ask your managers to provide each of their direct reports with clear definitions of what good performance looks like, how they are performing today, and expectations for the future. Encourage them to have these conversations more than once or twice a year. Managers can conduct regular check-ins and 1-on-1 meetings with their direct reports throughout the year to reflect on their role and responsibilities, communicate and overcome roadblocks, discuss growth, and share continuous feedback. This ongoing communication helps to ensure employees feel up-to-date on the latest organizational changes and secure about what’s coming their way in the future.
Every employee wants to feel like they’re progressing in their roles by improving their skills, taking on new responsibilities, and meeting or exceeding their goals. If they feel a sense of stagnation, their goals and/or responsibilities are constantly shifting, and they don’t know how to grow their career at your company, employees will quickly get frustrated and look externally for advancement opportunities.
How can your business keep employees from feeling “stuck” in their careers? With clear career paths and effective goals.
Career paths and lattices spell out exactly what experience, qualifications, and competencies your employees need to make a lateral or vertical internal move at your company. Having clear, detailed career paths can motivate your employees to hone their skills over time to further their career aspirations at your company. During performance reviews, have managers ask their direct reports about their career aspirations and discuss how they can set themselves up for a raise or promotion in the next review cycle. This gives your employees a clear idea of what they need to do to advance on their chosen path.
Effective goals allow your employees to track their progress over time and understand how their performance will be rated. Goals outline an employee’s priorities for a quarter or year, so they can understand what success looks like and where they are in the process. Goals also help employees see how their individual efforts relate to larger organizational priorities, which can give them a renewed sense of purpose and achievement.
Lastly, people want their work to matter and to feel like they’re having a positive impact. Whether you realize it or not, the way your business measures performance affects whether employees find their work meaningful. While metrics are valuable for evaluating success and reporting on growth, relying too heavily on metrics can do more harm than good. For example, if your business primarily assesses performance based on metrics, it can lead to your salespeople overpromising to clients at the end of a quarter just to meet their quota. Or, if your customer service team is ranked based on how many client calls they complete per hour, the team might be motivated to hang up on customers to inflate their numbers. While your employees’ performance might look good on paper, both of these outcomes come at a substantial cost to your business, customers, and even employees.
Instead, measure employee performance quantitatively and qualitatively by balancing metrics with impact. Recognizing your people for the impact of their achievements gives them a sense of purpose and helps them lead more fulfilling careers focused on outcomes, not just targets.
Building a more human performance process today
With the Great Resignation upon us, creating a performance management process that truly sets your current and future employees up for success is crucial. If you’re looking to develop a people-first performance process, Culture Amp can help. Our three-part webinar series, “How to create and implement a culture first performance process,” shares the key steps to building a truly culture first performance process – from getting buy-in from leadership to designing and implementing a system that is effective and adaptable.
Humanize your performance process
Learn from Culture Amp customers who have already implemented culture first performance processes within their organizations.