Performance evaluations aren't usually the most comfortable meetings for employees or their management teams. Any situation that requires one individual to judge another is going to be stressful, and that can reduce the overall effectiveness of what could otherwise be a productive and beneficial meeting.
Thankfully, the outdated concept of the traditional performance review is starting to change, and they're being replaced by more effective, engaging conversations and human resource solutions that have a more lasting impact.
Consistent conversations over annual rubrics
One of the major problems with the now-outdated annual performance review was its infrequency. Getting feedback once a year wasn't allowing workers to change their strategies as soon as management thought something wasn't working well. This allowed them to build up bad habits or go into their reviews thinking everything was fine, when in reality management had a very different opinion. In addition, the person conducting the review could be harping on an event or project the employee being reviewed doesn't even remember well, making it a pointless exercise.
Traditional rubrics don't leave much room to consider each worker's unique skills and limitations. Consider those old rubrics as a guide, or something to spark ideas and conversation, rather than something that needs to be strictly followed at all times. Because ultimately, that's what the modern review should be – a conversation. Both parties should have a chance to speak and discuss each point on the agenda, ask questions and raise concerns. A successful evaluation should never consist of an HR manager rattling off a list of problems.
Ohio State University's Office of Human Resources released a document detailing some of the most common problems with traditional reviews. They can sometimes result in a "halo effect" or rating an employee highly in every category because of exceptional performance in one area, or the contrasting "horn error" which leads managers to lower all factors in a review based on poor performance in one area. If an employee has struggled in the past, the "spillover error" could leave HR managers downgrading performance numbers even if the worker has improved.
It's critical managers have two-way chats with their teams instead of one-sided conversations while their staff members sit by. Asking employees how they can improve their performance in a specific area or what they think they've improved on can give those conducting the review an idea of how the employee sees him or herself. Requesting more detail on why or how an individual made a certain decision, where they want to develop their skills more and what's prevented them from achieving those goals may give more insight into what the worker's day consists of and if they're bogged down with time-consuming tasks.
What do employees think of these evaluations?
In a perfect world, reviews would inspire employees to improve and tackle tasks with renewed vigor. Unfortunately, this doesn't seem to be the case. "Performance appraisal satisfaction: The role of feedback and goal orientation," a study completed by researchers at Kansas State University, Eastern Kentucky University and Texas A&M showed that top performers who want to improve are quite bothered by getting negative feedback.
With this in mind, those organizations that think it necessary to keep evaluations need to ensure the best employees aren't getting reviews that will discourage them or motivate them to leave the company.
What makes a review effective?
Ultimately, both managers and employees should walk away with several key pieces of information and should never be surprised during the review. The hallmarks of a good review are shared responsibility from both employee and supervisor, the chance to set goals and an opportunity to recognize achievement or improvement.
If neither party feels these objectives have been achieved, it's hard to consider the review a successful or productive one.
How do bonuses factor in?
Most managers love rewarding great performance with a bonus. However, they need to go about it a certain way. Michael Beer, chairman of management consulting firm TruePoint and professor emeritus of business administration at Harvard Business School, told Inc. magazine that under no circumstances should a manager say they plan to discuss bonuses with employees in performance reviews.
"You can't get someone to really be listening and trying to learn about what they can do to change or problem solve when they know the meeting is about what their bonus is," he said. "They're going to be very defensive and closed."
Rather, the bonus talk should be saved for after the review, when the employee already knows how they're doing, where they can improve and will be fully focused on the topic at hand.
By optimizing performance reviews, employees will be more engaged in and satisfied with the process, and management teams can see more consistent, stronger performance throughout the year.