The dreaded employee performance review! Do you know anybody (leader or team member) who looks forward to doing them?
Well, if some of the research is to be believed, up to 90% of people HATE performance reviews.
I definitely fall into the 90% category - because traditional performance reviews are broken!
During a corporate career that spanned more than 20 years, I spent 15 of those years sitting on both sides of the table. I did the traditional 'corporate style' performance review as a team member being reviewed, and as the manager responsible for reviewing my team members.
My overall assessment - they don't work well for big business! And they definitely don't work for business owners and team members in small and medium sized businesses!
Why? Because the process involves some or all of the following - and I'm ashamed to say, I've been involved in some of these (well, maybe all of them!) during my time in corporate roles:
- A mad dash by the Leaders (sorry, I meant Managers) to get it done before the deadline imposed by Human Resources
- 5+ pages to complete with almost none of it being relevant (and Human Resources has spent months devising the new and improved forms)
- Human Resources chasing you down because you either haven't filled in the 5+ pages correctly, or, you are close to the deadline, you have a team of 10 people, you haven't submitted anything and they don't see how you can do the 10 reviews AND complete the paperwork before the deadline (because completing the form is the most important part, Right!?)
- The Leader (sorry, another slip of the tongue, I meant Manager) giving feedback to the team member related to a behaviour they witnessed 11 months ago that they would like changed
- The inconsistency between Leaders (crap, I did it again, Managers) and how they rate each team member - and they then link salary increases to the inconsistent rating system! Are you serious!
- And the list goes on...
Given these scenarios, why wouldn't you HATE performance reviews?
If you're a Human Resources person, stop reading this now. You won't like what I have to say next! I warned you...don't get offended at me when I warned you to stop!
Well, it's time to get rid of tradition (because it's broken!), and try something new.
The new and improved performance review involves only 4 questions (Wow! That should be a winner in itself compared to the 5+ pages previously!).
The focus isn't on completing the form. The focus is on having an open and honest two-way conversation. The Leader (yes, we can call them a Leader if they follow this), is focused on performance (past and future), mutual accountability, and developing vulnerability based trust.
It's time to train Managers into Leaders...and this new and improved performance review will help achieve it.
Just get to the damn questions!, I hear you say.
Ok, here they are...
The 4 Questions to Overhaul Performance Reviews
Q1. What have you achieved during this period?
I love starting with this question. After all, business, and teams are about performance.
It's time to reflect on the past period.
With this in mind, the conversation must focus on how the team member has contributed to the success of the team. There may be some individual achievements, but these should be minimal (if at all), if the Leader and organisation value teamwork.
As you get into a routine of having regular performance reviews, this question will ensure the team member is laser focused on achieving what they committed to in their previous performance review to help the team achieve its collective goal.
Q2. What are you going to achieve next period?
Given that you have just spent some time talking about the past. Now is the time to talk about the future.
The conversation must focus on how the team member will help the team achieve its collective goal moving forward. This is the time to focus on the technical (job specific) performance outcomes.
The best measure of a team is the results they achieve. Ensuring each team member has complete clarity about how they contribute to the success of the team, and then take ownership of what they need to do to help the team achieve the collective result, is critical to a team focused on achieving high performance.
Q3. How can I help you succeed?
As a Leader, this is a perfect time to demonstrate vulnerability and encourage feedback about your own performance.
You are in a Leadership role to help and serve. The best way you can do that is by seeking feedback from your team members on how you can be a better Leader for them. Another way of looking at this is to learn what you need to do to set up your team member for success?
Initially, you and your team member may find this the most uncomfortable part of the new performance review process...but, remember, everything is hard before it's easy! If you are fostering a culture of trust then this will get easier quickly - for both of you!
The next part of the conversation must focus on what the team member can do to improve. I always encourage Leaders to allow their team member to speak first. The Leader can then ask questions to clarify, or raise some areas they believe could help. The key point here is for the team member to own the improvement (or improvements).
As a Leader, you can then commit to helping them improve, with a greater chance of success.
I believe, this is the second most powerful question in the new performance review process. After all, 'feedback' is the medicine to transform unhealthy, poor performing teams into healthy, high performing teams.
Q4. How are you living our core values?
This is the most powerful question in the new and improved performance review.
This is where we focus on behavioural performance outcomes and alignment with the organisations core values.
Now, if the Senior Leaders of the organisation have not clarified their core values, this question can be problematic. Although, it's no excuse for not doing it. As a Leader, take ownership and work with your team to agree on 2-3 core values of your team. (This is a whole other conversation for another time on how to effectively identify core values vs aspirational values, but this short video on How to Find Your Core Values will help for now).
Having a conversation around behaviours that have supported the core values (or not) is critical to ongoing success of the organisation. Leaders must be completely intolerant of behaviours that are not aligned with the core values.
Talking about this and sharing stories to support the alignment of core values will help entrench these values and continue to reinforce the importance of 'how we behave'.
Your New Performance Review Process - How Often and How Long?
Before I answer this, did you know a study by Gallup revealed that employees who receive regular feedback are three times more likely to be engaged compared to those who receive feedback less frequently.
Another one by Adobe showed 80% of employees prefer immediate and regular feedback over traditional yearly performance reviews, and their regular 'check-ins' achieved a 30% reduction in voluntary turnover.
And if that's not enough to peak your interest, General Electric (GE) replaced the yearly performance appraisal with regular touch points focused on performance and achieved a fivefold increase in productivity.
As a business owner, if you want improved employee engagement, reduction in turnover and increased productivity across your team, read on.
So, you want to know how often you should do performance reviews and for how long? (That's a great question!)
The answer is two-fold!
In my 1on1 meetings model, I coach business owners to do these every quarter (once every 3 months) and will take 45-60 minutes per team member. The four questions allow conversation to focus on the last three months' individual performance, set individual goals to support team performance for the upcoming three months, agree what the leader and team member will do to improve over the next three months to set up success, and review behaviours against the core values and agree what core value the team member will focus on improving (even if a team members behavioural alignment is good - there is always room for improvement!).
To support the quarterly performance review process, I also coach business owners to have a 'light' version every month (once every 4 weeks). This will take no more than 30 minutes per team member. The focus of the conversation remains around the four questions, with the clear intent to ensure there is ongoing alignment with the quarterly goals that have been set - performance and behavioural (core value alignment).
Doing this process every quarter, underpinned by a 'light' version every month, will ensure alignment with business goals, momentum around performance, provide regular opportunity for mutual accountability, and build trust quickly.
As a business owner, you might be saying to yourself, "I don't have time to do all that!" It's definitely the most common excuse I hear...and it is an excuse! If you can't prioritise 30 minutes per month (and one hour every three months) with each of your team members to dedicate to their development (and yours!), you shouldn't be leading people!
Advice on What Not To Do!
As a business owner, there seems to be no end to the advice people are willing to give you on what to do, and what not to do to get the best from your people. The fact is the majority of the 'advice givers' aren't leading a business themselves or have even led any sort of team.
Call me crazy, but I've run my own business for almost a decade, and have led teams (across sport and business - locally, nationally and internationally) for almost four decades. This gives me a little bit of credibility to share advice. I've also done countless performance reviews and I've made many mistakes during the process. This gives me a lot of credibility to share advice on the 'What Not To Do' list.
Here are three key things of What Not To Do for performance reviews:
1. Don't Not Have the Conversation!
The worst thing you can do is not have the performance review conversation at all. Doing something is better than doing nothing. Even if you think you don't do them well (I hope this blog has helped you feel more confident), it is still better to have one-on-one conversations with your team member focused on their performance and future needs for learning and growth. According to Gallup, employees who have double the amount of one-on-ones with their manager compared to their peers are 67% less likely to be disengaged.
2. Don't Use Rating Systems - Ever!
Rating systems are the most controversial part of a performance review process. I still shudder at seeing the words, "Please rate the following out of 10". Even if there's a clear guide explaining each rating level and how it should look in a work setting, interpreting these ratings still ends up being very subjective.
Many a disgruntled employee has been created by the performance review rating system. Not to mention managers, experienced and inexperienced, who have fallen foul of their team members due to rating variances - and these don't have to be significantly different variances. I've seen situations where good employees can become disgruntled because they got a 8 or 9 instead of a 10.
Why put yourself through that? What value does it serve? Well-meaning Human Resource Advisors will say "How can we do salary reviews if we don't have a rating system for performance?". Here are some suggestions to consider that can be linked to salary reviews:
- Set clear and measurable goals for each employee and link the achievement of the goals
- Use peer reviews and feedback to gain insight into an employee's contributions and teamwork abilities
- Use ongoing documentation of employee performance through regular check-ins (Hold on! Isn't that what this blog is about?)
- Use a 360-degree feedback process to gather input from a variety of sources, e.g. managers, peers and direct reports
- Implement profit-sharing or bonus systems rewarding employees on the company's overall performance
All of these suggestions require some work to implement, but will provide you with far more useful information and insight about a team members performance. A rating system doesn't, so don't use them - ever!
3. Don't Use Lengthy or Complex Forms!
Using lengthy or complex forms is one of the most common pitfalls with performance reviews. These forms detract from the main purpose of the review: genuine conversation. Again, over zealous Human Resource Advisors are most often the culprit for this pitfall!
Overly detailed forms are unnecessary and can be overwhelming for business owners and employees. They also often lead to superficial reviews rather than in-depth discussions about performance, growth, and future goals.
Business Owners love simple and effective. Streamline the process with a concise, focused form that facilitates conversation, rather than hinders it. This approach not only saves time but also makes the review more engaging and productive for the manager and employee. Remember, the goal is to connect and understand through genuine conversation, not to get lost in paperwork!
Say 'No' to lengthy or complex forms - download our One Page Review Form.
Embrace Change: Lead the Way in Performance Reviews
So, there you have it! The new and improved process for conducting performance reviews that actually work.
Remember, don't not have the performance review conversation! Don't use confusing rating systems - actually, don't use rating systems at all! And don't waste time on lengthy or complex forms!
Be deliberate and spend the time on 'genuine conversation' every month covering the 4 questions:
- What have you achieved during this period?
- What are you going to achieve next period?
- How can I help you succeed?
- How are you living our core values?
You'll be amazed what a difference it will make when the focus is on having a 'open and honest' conversations.
What will you do?
Stay a Manager, and continue with the old review process that 90% of people HATE, and doesn't deliver improved performance.
Or, Lead the way! Be a Leader, and embrace the new and improved way of having genuine conversations that enhance the performance of each of your team members.
Like everything in life - the choice is yours!
What's been your experience with performance reviews? Share in the comments below...
If you enjoyed this article, please check out my other articles here.