We are rapidly approaching the end of the year and for many organizations it’s time for annual performance reviews – a time often dreaded by managers and employees alike. But why? Don’t employees enjoy knowing how they are performing? In addition to feedback, performance review time is often tied to an annual raise, and any salary increase is helpful in today’s economy. So why are performance reviews often such a negative event? What can companies do to increase the effectiveness of the performance management process?

One possible problem with the performance review process is that it is only undertaken once or twice a year. According to a recent Brandon Hall Group Survey  over 60% of organizations performance management processes expect leaders to connect with employees only one to two times in a year. This is not to say that leaders don’t connect with their employees outside of the performance review process, however, the desire of managers to provide direction and coach their employees is not usually occurring in a formal setting on a regular basis.

Companies should encourage their managers to check in with employees much more frequently than just once or twice a year. In fact, as the Millennial’s become a larger demographic in the workforce this frequent feedback is imperative – Milliennials require and appreciate frequent feedback.

Another problem with the performance review problem is the subject matter. Negative feedback isn’t pleasant for either the giver or receiver, and regardless of performance, many managers don’t really do performance reviews well, and can you blame them? Often comments are hard to come up with, and coaching for managers on this topic is often nonexistent. Even if a manager does try to be creative, that may not be worth effort. If you praise an employee too much, but then offer them the same cost of living raise everyone else is getting why should they bother working so hard? And if you give great reviews, they may need to be changed so that everyone is average, thus justifying a minimal pay increase throughout the department. According to Samuel Colbert in his book Get Rid of the Performance Review most companies follow this rating formula no matter how their workers rate:

  • 70 percent of people are rated average in a review.
  • 20 percent are rated excellent.
  • 10 percent need improvement or need to be replaced.

Of course every manager knows that not every employee is average, and it’s very difficult to retrain, reassign, or even replace employees. Even with a poor performance review a poor performer is often easier to work around than to remove.

Consider your review process and the tasks required from your managers. Make sure they are aware of the company’s expectations in the process and give them training on how to review and coach their employees.

A third issue often seen with performance reviews is that after they’re completed not much changes. Papers are filed with appropriate departments and employees and managers return to business as usual. Don’t fall in to this trap! Make plans for your employees’ future growth and development. Plan for the future – give the performance review process a purpose beyond just checking HR boxes once or twice a year.

To learn more about how to make the performance management process useful to everyone in your organization join us for a Brandon Hall Group webinar called Straight Talk: Making Performance Management Useful to Everyone, where you will learn how to increase the effectiveness of your performance management process.
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1Source: Brandon Hall Group, Driving Development and Growth: With Performance Management, 2011. N=306.

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