How To Make Performance Reviews Not Suck
It is performance review season again, and let’s face it: Performance reviews suck. According to a recent survey conducted by Mercer (via HR Dive), a mere 2% of companies believe their performance management process delivers high value, and fewer than 3% believe their feedback practices are excellent.
From an employee’s perspective, performance reviews happen just once a year, so managers are often either not aligned with employee goals, or they forget them, which leads to overly generalized reviews that leave employees without specific details to help them get to the next level. To combat this, employees have to spend hours upon hours compiling the necessary background to show their managers they’re doing a good job.
I can’t believe the business world hasn’t standardized on great performance review practices. I have been at big companies and small, and I still don’t believe corporate America has nailed it. A number of companies have publicly stated they have nixed the annual performance review process, including Deloitte, Accenture, Adobe, Juniper Systems, Dell, Microsoft, IBM and PwC. It’s hard to believe that in a world where we have real-time collaboration and tools for things like product design, project planning and communication, we cannot effectively figure this out. I even spent some time at an HR tech company building a product to do this and couldn’t figure it out.
Until we have the Slack for performance management, or until one of the big players figures out how to make its performance review software more modernized, here are some ways I have found to make performance reviews a more positive experience:
1. Weekly one-on-ones build toward the performance review. Create a shared document between the employee and the manager — say, using Google Docs — in which you update each other on your agreed-upon goals. The employee literally writes the performance review on a weekly basis, with the manager able to provide commentary. In addition, the manager and the employee can talk about career development, obstacles and so on. One-on-ones should be formalized so that the employee and the team get the most benefit, as this will allow everyone to agree on how the work and the employee are developing. At Rosetta Stone, my entire team contributes to one document every week. It is an open one-on-one document so we can all understand what’s happening in each team. Secondarily, a nice benefit is that we don’t spend time in staff meetings with those long per-person staff updates. We are freed up to talk about strategic initiatives and the health of the business.
2. Effective goal alignment. Employees and managers should agree on their goals on a weekly basis. If a goal is out of date, then you can change it. The annual process is such that most HRIS systems enable you to post your goals to a central place, but no one ever looks at them. I have gotten in the habit of simplifying by putting everyone’s goals in a Google sheet so everyone can see each other’s. There are new HR tech companies that deploy more complicated goal management systems, but I always try to tackle management practices without spending a lot of money on systems and software. Get what you want to have done first, and then you can always expand and invest once you have a rhythm to your business.
3. Copy and paste into your performance review. If you do the first two steps, your employees can copy and paste their achievements in their annual performance review. They shouldn’t have to spend more than an hour on their performance review. By having active conversations throughout the year, employees can quickly build their own performance management documents.
4. No surprises. No one wants to be surprised — so don’t surprise anyone. Managers should initiate quarterly performance discussions with a view toward where the score is trending. The worst-case scenario is that you have someone rate themselves at the highest rating and then have their boss surprise them by putting them on a performance improvement plan.
5. Continuous feedback. Whether you have invested in software that “pulses” your employees like TINYpulse — which I am an investor of — or Qualtrics, or you are sending out your own feedback, you should figure out how your entire business is trending in terms of employee engagement and management practices. For instance, I use the “stop-start-continue” format that is executed in a simple Google survey. Whatever the mechanism, find out whether your team is having one-on-ones, whether they are effective and whether your managers are having meaningful performance discussions on a regular basis.
According to industry analyst Josh Bersin, the future of the manager is to be a coach; management feedback is expected to be fast and continuous, much like what you’d experience on the field with an athletic coach. Your performance measures should be key KPIs for your business. They are just as important as your customer net promoter score.
If you follow the above five steps, you should be able to be data-driven in your approach to management, not unlike what you are already doing in your business with other key measures. The bottom line is that highly engaged employees result in happy customers, so don’t underestimate how improving the performance management process in your organization can boost overall business performance.