This is the second in a two-part series on performance reviews. The first post dealt with the common mistakes so many organizations make in conducting reviews. This article takes a look at some best practices to help companies make the most of a mission-critical tool for building a successful workplace.
Productive employee reviews take practice and discipline but they’re a critical tool used to build informed, collaborative workplaces. Below are seven best practices that will help any organization make the most of their employee/employer feedback cycle.
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Create well-aligned Objectives
Employee objectives which are well-aligned with a company’s own strategic objectives are an incredible way for employees to understand how their individual contributions drive their company forward. They also serve as a roadmap for the employee’s own progress at the company and, as such, they become the centerpiece of employee review conversations.
Once objectives are defined, it’s time to get into the actionable next steps which the employee (manager, employer, etc.) will take to ensure the objective is achieved. These action steps are critical to ensuring that there is regular, measurable progress being made, and they’ll provide a regular boost to morale each time a task can be checked off the list.
Provide productive, actionable feedback
Sachin Shetty at hiring software provider VoiceGlance offers a helpful example of ad hominem criticism versus specific, behavior-focused criticism. To tell an employee “You’re unreliable,” Shetty writes, offers no useful advice and it will likely force them to further entrench that behavior.
Shetty offers an alternative way of phrasing this criticism: “Two times in the past month, your work has been submitted late.” This offers criticism that is both specific and prescriptive, and lets the employee know he/she should make it a priority to hand in work on time.
Another key to providing productive feedback is to avoid being overly impulsive – take time to let initial reactions to an employee’s behavior simmer to ensure that rational and objectivity are present in the feedback being provided back to the employee.
Take Time to Prepare
Good performance reviews require due diligence and planning, even if the company has a culture of frequent, informal employee/manager communications. “Nothing looks worse to an employee than having this important meeting on the fly,” the team at Complete Payroll Processing, Inc. writes. “By taking the time to prepare, you are showing your employee that you care and will take the time to help him/her succeed.”
Managers should create objectives and an agenda for each performance review, and take good notes during the meeting. Demonstrating that level of preparedness helps reinforce the trust it takes in the employer-employee relationship to deliver fair criticism. Then, follow up after the review with any notes, wins and next steps on employee objectives. Finally, make sure the employee is doing the same. Employee reviews are not a one-way street – both parties owe it to themselves to come prepared with well-considered feedback.
Give Feedback Frequently Throughout the Year
Open, ongoing communication is the key ingredient to employee success. Regular, ad hoc conversations with employees coupled with frequent (quarterly or monthly) employee review cycles are a good way to keep feedback fresh and relevant.
“You want to get the best from employees, and real-time feedback on accomplishments and challenges gives them the opportunity to grow throughout the year,” writes Chad Savoy, a VP of sales at Cornerstone OnDemand. “Then come review time, you can focus on achievements and growth instead of rehashing past challenges.”
If there is a disconnect in that ongoing feedback loop, then this sets the performance review up to feel more like a judgement, or at least a college exam. Sometimes, this can be the result of a team leader either lacking time or wanting to punt on a tough conversation.
Real-time feedback means the content of a performance review doesn’t catch anyone by surprise, which Matt Ingold at employee benefits platform provider Benetech says should be considered a leadership failure.
“Too often, leaders side-step the difficult conversations about an employee’s sub-par performance or counter-cultural attitude and don’t hold employees accountable for improvement until they are held accountable to do so by the performance review process,” he writes.
Don’t Mix Pay Raises and Performance Reviews
Productive performance reviews are tools to aid in compensation considerations but the review itself isn’t the time to determine pay raises, as it can incentivize employees to try and ace reviews for financial gain rather than seek honest feedback on their performance.
“Performance and compensation are significant enough on their own, so it’s usually not ideal to mix the two,” the Harvard Business Review offers as part of its series of quick tips.
“So, if your direct report raises the question, thank him for bringing it up and promise to get back to him by a specific date. Take time to fairly assess whether an increase in pay is appropriate. When you do talk about it, explain that a person’s salary is determined by two things: the value of the job to the organization and the quality of the individual’s performance. Ask him to consider both factors, examining both how the job can be made more valuable to the company and how his performance can be improved.”
Our own best practice is to have distinct compensation discussions outside of quarterly employee reviews. Our compensation considerations begin internally (at the executive level) at the beginning of the quarter in which an employee has an annual anniversary. Then, come the anniversary, we have a one-on-one with the employee (again, outside of normal performance reviews) to catch up high-level on how things are going. That’s when we discuss compensation changes, how we’ve come to our decision, and what feedback the employee may have for us.
Offer to Get a Second Opinion
In this series’ first post, we mentioned that biases can factor into the way an employee’s performance is evaluated. Well, even if biases are eliminated from the employer side of things, there’s still the issue of perceived biases on the employee’s side.
According to a recent NCMM survey, more than 4 in 10 respondents said they felt managers played favorites during the review process.
Strategist and Duke University professor Dorie Clark at The National Center for The Middle Market (NCMM) suggests instituting second-level reviews, such as peer reviews or reviewing employee feedback with a manager’s own boss, to overcome any such perceptions. “Employees will be a lot less willing to learn from their performance reviews if they feel the system is rigged,” she writes. With the knowledge that feedback is coming from more than a single source, employees will be less likely to feel like the deck is stacked against them personally.
Demonstrate a Commitment to Strong Work Relationships
The employee review experience can be daunting at times, inevitably adding to our already stressful daily lives. That’s why it’s important to spend a few moments at the end of a review reaffirming the reasons for the process itself: to understand and build stronger relationships with your team members, and ensure everyone is getting the most out of the organization.
Jen Dary, founder of the talent strategy consultancy Plucky, frames this as building a community of colleagues.
“Embracing failure, giving credit for successes and providing support for people to be human builds strong relationships between a community of co-workers,” she writes on her Medium blog. “This affects retention rates but also allows employees to be more efficient, effective and powerful workers because they work better through the inevitable distractions of conflict, burnout and more. They highly appreciate the healthy community that they work for.”