Conducting regular performance reviews is an important and constructive way to evaluate the contributions an employee is making to the company. But the traditional practice of sitting down once or twice a year to discuss what an employee has done well and needs to improve on simply isn't cutting it anymore.
In a recent study, employee engagement company TINYpulse polled over 1,000 professionals to find out what they thought about their reviews. The results showed that employees are generally dissatisfied with traditional performance reviews: 37 percent said they think the process is outdated, and 42 percent said they think managers leave important elements out of their review due to bias. Nearly a quarter of respondents even said they "feared" their performance review, especially those in the millennial generation.
"Traditional annual performance reviews are inadequate," said Matt Hulett, chief product officer of TINYpulse. "They're biased towards recent work, goals aren't communicated clearly, there's misalignment in objectives between organizations and employees, and quite simply, the whole process just takes too long. With more and more ... workers wanting change, the time for a performance review system upgrade is now."
In a recent article for The Washington Post, Cliff Stevenson, a senior recent analyst for the Institute for Corporate Productivity, said that, to date, nearly 10 percent of Fortune 500 companies have done away with annual employee performance reviews. Many large companies — such as The Gap, Adobe, Costco, GE and Microsoft, to name a few — have scrapped their traditional review programs in favor of systems that incorporate newer technology and immediate feedback to employees after assignments while still maintaining documentation of performance.
Here are some suggestions to follow their lead in revamping your company's employee review process. [See Related Story: Writing a Good Performance Review: Honesty & Guidance Are Key]
1. Embrace technology. There is an increasing trend in the development and use of employee engagement apps, such as TINYpulse, Impraise and Workday. These apps give employees and managers a chance to communicate regarding assignments daily, tracking progress, providing feedback and incorporating other business aspects so that each member of the team is on track and on the same page.
2. Institute performance-related pay increases. Sixty-four percent of the people polled by TINYpulse wanted pay increases tied to their performance reviews. Consider quarterly bonuses or increases to positively reinforce good work as well as the employee's confidence that you value him or her as both an individual and a contributor.
3. Make reviews more frequent. With immediate feedback provided on social media sites like Facebook, people are increasingly used to hearing the good and bad on our thoughts and actions in real time. TINYpulse found that employees are in favor of more frequent reviews, so consider conducting evaluations at key milestones, such as at the end of a major project, or quarterly. These meetings do not have to be long, but they should highlight the highs and lows of the project or time frame. Such reviews give managers a chance to stay engaged with their direct reports, and also provide an opportunity for continuous improvement by receiving feedback from the employee on what could be improved for the next cycle.
"If you put this new generation in the box of the performance management we've used the last 30 years, you lose them," Accenture CEO Pierre Nanterme told The Washington Post. "People want to know on an ongoing basis, 'Am I doing right? Am I moving in the right direction? Do you think I'm progressing?' Nobody's going to wait for an annual cycle to get that feedback."
Initiating informal performance reviews
When giving informal feedback, managers should avoid general comments, such as "nice work" or "good job," said Brigette McInnis-Day, executive vice president of human resources at SAP. Instead, they should cite specific examples, such as "Great job leading that meeting," so the employee knows exactly what behaviors to repeat or change in the future, she said.
Another way to provide ongoing feedback to employees is by collecting and sharing a "crowdsourced" review from other staff members, said Eric Mosley, CEO and co-founder of employee recognition and rewards solution Globoforce. The results of the TINYpulse survey support that suggestion, finding that more than a quarter of respondents would like to have co-workers involved in the review process.
"Managers should crowdsource reviews about an employee's work from their entire staff, so they can get a complete and accurate picture of an employee's performance throughout the entire year," Mosley said. "It provides constant feedback to both individuals and their managers, while informing the community at large of progress. It harnesses the wisdom of the crowds to give accurate and specific feedback on individual performance, and it will harness the power of data analysis to connect performance to profits. More than anything, it continuously drives company behavior toward a deliberate, strategic culture."
Written evaluations: Why words matter
Written feedback is an important component of performance evaluations, but many managers find it difficult to complete this task effectively. If positive comments aren't phrased well, they can sound trite and insincere, and any suggestions for improvement might sound too critical.
Richard Grote, author of "How to Be Good at Performance Appraisals" (Harvard Business Review Press, 2011), said that instead of using terms such as "good" or "excellent" in a review, employers should opt for more measurement-oriented language. In an interview with HRCareers.com, Grote noted that action words — such as "excels," "exhibits," "demonstrates," "grasps," "generates," "manages," "possesses," "communicates," "monitors," "directs" and "achieves" — are more meaningful.
Ken Lloyd, author of "Performance Appraisals & Phrases for Dummies" (For Dummies, 2009), offered a range of words and phrases managers could use for each type of employee responsibility:
- Quality and quantity of work: accuracy, thoroughness, productivity and goal attainment
- Communication and interpersonal skills: teamwork, cooperation, listening, persuasion and empathy
- Planning, administration and organization: goal setting, prioritizing and profit orientation
- Leadership: accessibility, responsiveness, decisiveness, collaboration and delegating
- Job knowledge and expertise: knowledge base, training, mentoring, modeling and researching
- Attitude: dedication, loyalty, reliability, flexibility, initiative, energy and volunteering
- Ethics: diversity, sustainability, honesty, integrity, fairness and professionalism
- Creative thinking: innovation, receptiveness, problem solving and originality
- Self-development and growth: learning, education, advancement, skill building and career planning
Performance review samples and templates
Examples and templates of performance evaluations can be found on the following websites:
Additional reporting by Chad Brooks and Nicole Fallon Taylor.