Making Performance Reviews Matter: 5 Areas Every Organization Should Examine
cause managerial consternation?
It should be a time for examination,
Instead it’s a source of procrastination
It’s nice to highlight commendation,
It’s not for focus on condemnation.
A thoughtful exchange of information
to stoke the power of collaboration.
After much deliberate contemplation,
It’s time for direct communication.
Stating a year’s worth of observation,
With action plans for implementation.
One has to avoid the expectation
for adversarial confrontation.
Start with a mutual admiration
and embrace the challenge of evaluation.
By Michael Moskowitz
Why does Performance Evaluation Cause Managerial Consternation?
Various studies have shown that approximately 70% or more of all U.S. companies conduct a performance review of their employees. A 2022 study of 837 North American companies by consulting firm WTW found that only 26% reported that their performance management systems were effective and the same study found that only 33% of those 837 organizations reported that their employees felt their efforts were evaluated fairly. Additionally, a Gallup survey conducted in 2022 found that an astounding 95% of managers are dissatisfied with their organization’s performance review systems. Managers are evaluatees as well. The same study found that fewer than 20% of employees felt inspired by their reviews. Performance reviews are one of several engagement tools, and Gallup estimated that disengaged employees cost U.S. companies $1.6 trillion annually.
For performance evaluation – a highly prevalent, thus likely important organizational system – to elicit such widespread dissatisfaction is certainly a source for managerial consternation.
The poem highlights 5 performance evaluation aspects for the reader to consider for focused attention and assessment. This blog poses introspective questions for each. Choose the 1 or 2 that resonate most loudly with you and the needs of your organization and call on your HR professional (or SDHRC Consultant) to suggest and help implement tangible, targeted changes to improve your performance review systems.
1. Integrity of Performance Information
Has the evaluatee had a clear understanding of behavioral and results-oriented expectations regarding their key performance indicators (KPI’s) for the entire evaluation period? Are methods in place to capture KPI data for each employee on a consistent basis – not only incidents of exceptionally positive or negative performance? Is the information communicated in the performance review an accurate overall summation and quantification of the employee’s KPI results?
2. Stoking the Power of Collaboration
Does the performance review process support the collaborative side of the effort and produce a mutually beneficial win-win outcome for both participants? Does the process serve the purpose of providing useful two-way feedback – to the evaluatee on their overall job performance, individual strengths and KPI performance, ways to bolster areas needing attention, career aspirations, and contributions to overall organizational goals AND to the evaluator to facilitate discussion about the perceptions of the evaluatee regarding how the manager can improve their ability to engage with and support the success of the employee?
3. Prioritization
Are performance reviews perceived as a high-priority, high-value activity by manager and employee, given all the competing responsibilities requiring employee and management attention? Since a well-executed performance evaluation is labor intensive – data collection and review, consideration and assignment of performance ratings and values, communicating and discussion with the employee, all multiplied by the number of people reporting to the evaluator – is the tendency toward quality or “just get it done?” Does the current set of organizational dynamics at play contribute to a dissatisfying experience for evaluators and evaluatees alike?
4. Reasonable Period of Observation?
Is it reasonable to assimilate and communicate comprehensive job performance data once or twice a year? (A 2022 study of 1000 full-time employees by software company Workhuman found that 49% of their employers conducted annual or semi-annual reviews, 28% did quarterly assessments, 7% did not conduct performance reviews, deducing that about 16% of the companies surveyed provided monthly reviews). Does the growing trend of providing performance reviews more frequently than annually or semi-annually indicate that delivering one year’s worth of job performance data in a single, meaningful document and discussion needs to be re-evaluated? Is the trend toward more frequent, less comprehensive performance meetings that each focus on a few key performance indicators a better way to manage performance reviews? Is an annual performance meeting that compiles and communicates the results of all evaluations conducted during the year serve as a more accurate illustration of a year’s worth of observation?
5. Expectations
What is the expectation of the evaluation process – is it viewed as constructive or unhelpful or adversarial? Is the challenge of providing an effective performance evaluation process appreciated by both evaluator and evaluatee? Is there a mutual understanding, expectation and commitment to continuously seek improved performance evaluation process effectiveness that will benefit employees, their managers, and the organization?
Next Steps
If this blog sparked ideas, or even frustrations, around how your reviews are currently handled, let’s talk.
