The employee performance review has received a lot of criticism in recent years. Traditional performance appraisal processes have caused headaches for HR, managers, and employees alike. And most importantly, they have failed to serve their intended purpose—driving employee growth and development.
There’s still a place for the annual performance review. But success-driven organizations know it must be part of a continuous performance management strategy.
Quantum Workplace research shows that less than half of employees say their organization's current performance management approach:
HR leaders must lead their organizations through rethinking performance reviews, asking questions such as:
Before we dive into the tactical side of performance reviews, it’s important to understand what a performance review is and why it is important. This will give you the foundation you need to start using performance reviews more effectively in your organization.
A performance review is a formal evaluation of an employee's performance, skills, and accomplishments in their job. Often rooted in performance ratings, performance reviews are a common practice in organizations. They are typically conducted on an annual basis. While they serve as an opportunity for managers and employees to discuss performance, set goals, provide feedback, and recognize accomplishments, the current state of performance reviews has faced numerous challenges. It's essential for HR leaders to understand these challenges and improve the process.
A modern performance review should be a two-way, individualized conversation between a manager and an employee about performance impact, development, and growth.
It is a critical component of an organization’s overall performance management strategy. How an organization navigates performance review conversations has a demonstrated impact on employee engagement and retention.
Performance reviews help managers and employees understand progress and areas of improvement. Employees can see where they're doing great, where they can get better, and what they should aim for next. If wielded well, performance reviews can be a secret weapon in retaining top performers. They serve as a perfect opportunity to summarize an employee's progress, recognize contributions, and develop a growth plan that is aligned with your organization's vision and key objectives.
Traditional annual performance reviews often fail to capture employees' performance accurately due to recency bias. This can result in an unfair evaluation and hinder employees' professional growth. Moreover, the rigid structure of annual reviews may not align with the agile and dynamic nature of today's workforce, which requires frequent performance management and real-time feedback.
Employees may feel anxious or demoralized leading up to their annual performance review, fearing criticism or potential negative consequences. Additionally, the traditional annual performance review process can be perceived as a one-way communication process, lacking employee input and engagement. Employees miss out on regular and constructive feedback, which are crucial for growth and development.
Quantum Workplace research shows that ongoing feedback and 1-on-1 conversations with their manager are much more effective at improving their performance than a formal review process or performance rating.
In light of the challenges mentioned above, there is a pressing need for HR leaders to develop more efficient, effective, and engaging performance review systems in their organization. A modern performance management cycle should focus on continuous evaluation, regular feedback, and ongoing coaching. By adopting such a system, organizations can enhance employee engagement, improve performance, and drive organizational growth.
Your managers and employees are busier than ever. They don't have time for clunky tools and extensive paperwork. HR should focus on simplifying and standardizing the review process to make each step as easy as possible. A user-friendly performance management platform is table-stakes! Find a platform that makes it easy to aggregate performance data and facilitate an effective review conversation.
According to our research, only 48% of employees find their organization's performance management approach efficient.
Are your performance reviews actually improving employee performance? Every conversation should be centered around clear, measurable goals and actionable feedback that helps employees grow.
According to our research, only 49% of employees find their organization's performance management approach effective.
Your performance review process can have a positive, neutral, or negative impact on employee engagement. Focus on creating a transparent, two-way process where employees feel valued and heard. Conversations should stay focused on growth and improvement, and employees should be active participants in setting goals, assessing performance, and identifying development opportunities.
According to our research, only 48% of employees find their organization's performance management approach motivating.
Performance reviews give employees and managers a chance to discuss how employees are doing and how they can do better, together. Done right, they can engage and motivate employees to maximize and align their efforts. Done wrong, they can send employees down a disengagement spiral—and even decrease performance. Below are a few important elements to consider in your performance review process.
If you want to cultivate employee success, you must branch beyond the traditional, annual review. So much can change in your organization or with your employees in one year. It’s important to stay aligned and to keep communication going during those changes.
We recommend quarterly or monthly performance conversations, paired with a year-end review of general themes, notes, progress, and next steps. This allows managers and employees to stay on the same page about goals, progress, and performance. It also helps:
Quantum Workplace research shows that more frequent (monthly) performance conversations result in 21% more effective reviews, 11% more engagement, and 8% more perceptions of fairness, and 5% more improved performance.
Many organizations are turned off by a quarterly or monthly performance review cadence because it feels like a hefty time commitment. But if you’re having frequent conversations, they don’t need to be long, robust, or comprehensive to be effective. Your teams are better equipped to navigate unexpected changes.
Not only should performance conversations happen more frequently—they should also be more engaging. Managers and employees should equally contribute to the conversation, and employees should be just as invested in the preparation as managers. Constructive criticism helps team members identify areas for improvement and take steps toward personal and professional growth.
While there isn’t a one-size-fits-all solution for all performance discussions, every conversation should promote trust, reduce anxiety, create clarity, and showcase alignment. And these conversations don't have to be just about performance. They can address:
Traditionally, performance reviews have centered around the past—how the year went, what went well, and what didn’t go well. Employees can’t change the past, so it’s pretty disengaging to be evaluated on situations they have no power to shape.
But employees do have the power to change what happens in the future—and this is where the bulk of your performance conversations should focus. It’s good to reflect on the past, but managers and employees should also spend time looking forward to the next year.
Performance reviews can be anxiety-inducing. And one of the best ways to reduce anxiety is to bring employees into the process early. Managers should work with each employee to create a clear, shared, and collaborative agenda with main points of discussion.
Both parties should know exactly what to expect—there shouldn’t be any surprises! It is important for performance reviews to be transparent and for managers to gather honest employee feedback to promote professional growth.
Today we have access to mountains of relevant data. There’s no excuse for subjective performance reviews anymore. To prepare for performance reviews, managers should gather data from multiple sources. These sources may include recognition received, feedback from others, ratings from talent reviews, notes from one-on-one meetings, and progress towards goals.
In a performance evaluation, it's important to focus on specific examples and results rather than generalizations.
Every statement made should be fueled by data—not by the manager’s personal opinion.
No one will want to participate in the review process if it's clunky and outdated. Performance review software helps simplify the process and enhance effectiveness across the board.
You need to get your performance reviews out of spreadsheets and into a digital platform that helps you share agendas, record notes, and document performance all year long. It should help empower your managers with diverse data sources that help them be better coaches, have better reviews, and minimize subjectivity in performance evaluation.
Quantum Workplace research shows that when managers are rated as effective users of technology, employees perceive them as 3.4X more effective at management.
To recap, here are some key differences between traditional performance reviews and modern performance reviews.
Traditional Performance Review |
Modern Performance Review |
|
|
Conducting performance reviews is a crucial aspect of talent management within any organization. The responsibility primarily falls on the shoulders of HR and managers. Together, they should work towards creating a more efficient, effective, and engaging review process.
Managers should approach any performance conversation with thoughtful preparation and lots of data and examples. In this section, we’ll discuss how to prepare for a performance review by:
Managers and employees should have a clear understanding of what constitutes good or poor performance—and this starts with organizations clearly communicating performance criteria. Performance criteria and ratings can be difficult to address and digest. Managers should act as interpreters of that data by adding qualitative context (such as goal progress or 360 feedback) to performance. They should approach performance reviews with a coaching mindset, highlighting and distilling information to make it easier for their employees to consume. Additionally, using metrics and measurements can provide valuable clarity and focus for employees and managers, acting as a framework for planning and prioritizing future efforts.
Performance conversations used to be based on subjective manager opinions. But in today’s data-driven world, that shouldn’t be the case. Managers should approach performance conversations with rich employee data from a variety of sources. This data should help guide the conversation and build a more meaningful relationship between manager and employee. Bring data and examples from previous 1-on-1 notes, goal progress, role competencies, 360 feedback, and recent recognition.
All of these are great ways to shed light on a variety of different aspects of an employee’s performance. The more data you can provide to add context to any difficult or even positive discussions, the more real your conversations will be. By leveraging performance criteria, specific examples, and employee data, an employee’s opinion of perceived fairness of performance review results will be all the more authentic instead of leaving a bitter taste in their mouth.
No one enjoys walking into a meeting blindly. Performance conversations are no exception. In order to give managers and employees the best opportunity to have a meaningful conversation about performance, both parties should work together to prepare a shared agenda and notes with key talking points. This will relieve some of the anxiety around the conversation and will give employees a chance to contribute their thoughts and prepare for the meeting. It also allows employees to adjust the agenda to fit their needs. When employees are encouraged to bring topics they want to discuss, managers can focus on actively listening rather than lecturing.
Performance conversations are sometimes difficult. When employees aren’t achieving goals or objectives, these meetings can help determine why and how to help an employee improve. Start off on the right foot by aligning on expectations for the meeting itself. Here are a few tips:
Above all, managers and employees should have a shared understanding of what good performance looks like. When necessary, managers should provide clarity around each employee's role and how the organization perceives their contributions. By aligning expectations with your organization’s established performance criteria, your employees won’t feel misguided or alarmed when their review begins.
When it comes to how to conduct a performance review effectively your managers need to understand:
Traditional performance reviews focus on past behavior and performance. While acknowledging past performance is important, if that’s the only thing you talk about in a performance review, you’re not going to drive future performance. Performance conversations should give employees an opportunity to address and correct performance in real-time and continuously see how their work aligns with organizational goals.
Future-focused performance reviews also align with employee wishes for more feedback and development opportunities. Employees want immediate feedback so they can improve performance on-the-go, rather than waiting for their annual performance review. They also want to know you care about their future—whether that’s with your organization or not.
Asking (and inviting) the right performance review questions is critical. The right questions help keep you focused on the topics that are important to your employees’ and organization’s success.
Pro Tip: Use a performance review template that invites honest, genuine feedback and uncovers actionable ways to improve performance. Here are a few good questions to ask in a performance review:
Managers who approach performance conversations with an evaluation mindset may make employees feel like they’re on trial. Ask these questions to shift your mindset from judge to coach. And always encourage employees to ask questions of you. By coaching your employees and inviting them to contribute to the conversation, you can work together to help them achieve their goals.
Your words carry a lot of power. They can be motivating to your employees or completely deflate their work and value. When meeting with your employees you’ll want to be thoughtful, considerate, and take the time to prepare. While there are many ways you could approach a performance conversation, what not to say in a performance review is just, if not equally, as important as what to say. Here are a few tips for choosing effective performance review phrases:
Performance conversations should be two-way, so make sure you’re facilitating a dialogue and actually listening. Listening to your employees helps you learn and understand rather than simply give someone equal talking time. Ask follow-up questions to help you dig deeper and paint a fuller picture.
Participating in the conversation isn’t always about sharing your point of view. After an employee shares their feedback, repeat back what you heard. This gives you the opportunity to check that you accurately understood what the other person said. Be sure to allow enough time for the employee to share their feedback with you and bring a laptop or notebook to record it so that you can follow up later.
A performance conversation shouldn’t end when the meeting is over. For performance review follow up, managers and employees should review notes, define next steps, and follow up with shared comments and feedback. Without these items, performance conversations feel unresolved. If you want your review to actually improve performance, creating an action plan is vital.
There are many types of performance conversations, each with its own purpose and impact on employee engagement and development. HR leaders can use different types of performance reviews based on their organization's needs and goals. A mix of conversations helps keep up with the pace of change at work, facilitate feedback faster, and keep teams aligned. Here are the most common types of performance reviews:
The annual review is a key time for looking back at what employees have done well and where they can do better. Managers can acknowledge great work, address broader concerns, and offer valuable feedback for employee growth. Managers and employees can reset and align on expectations, adapt to changes, and co-pilot development plans for the coming year.
The mid-year performance review is a great opportunity to check on goal progress and adjust or set new goals. Employees can share obstacles and opportunities relative to agreed upon next steps from the annual review conversation. Managers can help address key challenges and course correct to keep important work on track—helping employees develop new skills and participate in meaningful development opportunities.
Quarterly performance evaluations are great milestone conversations where managers and employees can focus on continuous improvement. Tracking goal progress and adapting to changes are vital aspects of these reviews. Employees can align their efforts and seek necessary training when they need it, rather than waiting for their annual review to come around. And managers can coach around new obstacles and opportunities ahead.
Monthly evaluations play a crucial role in providing employees with consistent and actionable feedback. A regular feedback loop helps managers manage performance better, and helps employees feel heard and valued. Managers and employees can talk through specific examples and important data, really digging into the work and it's challenges. Monthly performance conversations also create a pathway for employees to navigate their own development journey and continuously improve based on consistent and constructive feedback.
Weekly performance check ins are the bread and butter of a strong feedback culture. They're valuable opportunities for quick, timely, and constructive input as important work is in motion. By encouraging two-way dialogue, managers and employees can tackle emerging performance concerns and nurture continuous improvement. Managers can recognize employee accomplishments in real-time, keeping employees motivated to great work. Weekly check ins help improve communication, connect the dots across the team, and promote a supportive and proactive work environment.
In this type of review, feedback is collected from various sources, including peers, subordinates, and customers. It provides a holistic view of an employee's performance and helps identify areas for improvement. These reviews cultivate a growth mindset, encouraging skill enhancement and personal development. In the upcoming year, consider incorporating 360 and self-performance reviews to enhance team dynamics and promote a culture of feedback and continuous improvement.
Crafting effective performance review templates can significantly enhance the feedback process. Leverage performance review templates to elevate performance reviews from a routine administrative task to a strategic initiative that empowers HR to foster a culture of continuous development and high performance.
Optimize your performance reviews by both streamlining and customizing with performance review templates. Templates help you streamline the feedback process, ensuring all managers and employees are discussing what's most important. You can tailor these foundational templates to specific teams and roles, and to ensure they reflect your organizational culture and values. Embrace the efficiency of streamlined and customizable templates to nurture growth, align expectations, and boost employee success across your organization.
Clear and attainable performance objectives are critical for effective and fair performance reviews. Employee goals should be in line with the company and team's overarching goals. Managers and employees should regularly revisit and adapt performance goals as business priorities shift. And goal setting should be a two-way conversation, fostering a sense of ownership and commitment among employees.
Performance competencies help employees focus on job-specific skills and areas of growth. These competencies should seamlessly align with job roles, goals, and development plans. By utilizing performance competencies as benchmarks, organizations can holistically measure critical behaviors, skills, and attributes necessary for job proficiency. And employees can work toward tangible skills and additional training to help them grow and advance in the organization.
Performance conversations don’t need to be hard. Keep your managers and employees on the same page with engaging performance reviews. Our performance review software gives your teams reliable context to help them have more objective and engaging conversations.
|
|
1. Customize reviews to fit your needs.Easily measure what you want, when you want with flexible review modules that you can tailor to fit the needs of your culture and the various groups within it. |
2. Help your managers build positive performance habits.Make it easy for manager to coach to performance by integrating your process into their existing workflows. Set up formal conversation cycles to create the right frequency and consistency of touch points. |
|
|
3. Easily track review response rates.See the status of each review cycle to help your teams stay accountable and monitor performance ratings in real-time. |
4. Embed performance goals directly into reviews.Our platform makes it easy to include goals as part of performance evaluations—and helps coach managers have objective, effective, and growth-oriented conversations. |
|
|
5. Orient reviews around multi-rater feedback.Incorporate feedback into your review cycles to gain valuable insight from the individuals your people work with most, and better orient performance conversations around development. |
6. Visualize and align on performance data across teams.Get a comprehensive view of your organization’s talent with our talent dashboard. Zoom out and see the big picture, to help you make more informed decisions on how to keep and develop your best talent. |
 |
In conclusion, modernizing performance reviews is crucial for HR leaders to foster a more engaging and efficient system. By understanding the challenges of traditional annual reviews and embracing a dynamic approach, organizations can enhance employee motivation and productivity. Incorporating regular check-ins, setting meaningful goals, and utilizing performance review tools are key strategies for success in today's workplace. Embracing change and implementing these best practices can lead to a more positive and impactful performance review process. If you're looking to revolutionize your performance reviews, consider reaching out for a free consultation to explore how to elevate your review process.
Make your performance review process more effective, efficient, and engaging. Quantum Workplace's performance review software helps your managers and teams prepare for, facilitate, and follow up for better reviews and better performance.
Published August 8, 2024 | Written By Kristin Ryba
