February 22, 2019

How to make the performance review process more effective

Leading organizations are evolving their annual review process to one of ongoing development and feedback. Part of redefining the old process is having better performance conversations with their people. Here are some key tips to make them more effective and engaging.

Danielle Ng-See-Quan

Dani is the Managing Editor, Content Marketing at Ceridian.

Before embarking on the latest round of performance reviews at your company, pause and ponder this: Gallup found that only 14% of employees strongly agree that the performance reviews they receive inspire them to improve. And, just two in 10 employees strongly agree that performance is managed in a way that motivates them to do outstanding work. These stats show that performance reviews are accomplishing the opposite of what they’re intended to do – inspire employees and help drive better outcomes.

We’ve previously written about the need for companies to evolve their annual review process to one of ongoing performance development and feedback. Managers should discuss performance with employees more than once a year, whether formally or informally. In fact, a recent Adobe study found that 80% of employees prefer immediate feedback to annual reviews.

As part of redefining the old process, how can organizations have better performance conversations that will serve both the needs of the business and employees? Part of that process is ensuring that employees are getting feedback that is motivating and constructive, and that employees and managers work together towards achieving goals.

Whether you’re still having annual performance reviews or have begun to evolve your process, it’s crucial that the feedback process focuses on coaching, supporting, and developing your employees. Here are some tips for managers to make the performance review process more effective and engaging.

Related: How do your managers rate on performance management?

Provide a framework to help employees – and managers – prepare

According to a survey of 1,000 full-time employees in the U.S., almost 22% have called in sick because they were anxious about their performance review. Further, 59% complained that their managers were unprepared to give feedback.

How can managers address the dread employees feel over the process, and come to the table with useful feedback?

Use a framework to guide the conversation, and help both parties prepare. Frameworks take the guesswork out of the process. They set expectations for what’s being evaluated, and provide a format that encourages two-way discussion.

Provide feedback through coaching

Coaching is about enabling employees to achieve their best performance through positive support, direction, and instruction. Here are a few quick tips:

  • Provide constructive criticism. Focus on your employees’ strengths as well as areas for improvement. Start with something positive, as an example of what that employee should continue doing. Be specific about the area or skill that needs improvement and how it affects your employee’s performance.
  • Be specific. Feedback that is concrete or related to specific projects, situations, or goals will be more effective in helping employees understand and respond.
  • Focus on behavior rather than personality traits. Instead of talking about, for example, an employee’s negative attitude, focus on the impact of the employee’s behavior or attitude in certain situations. Framing feedback in this way helps them see that they can change or improve upon their performance versus remaining stagnant.

Related: How leaders can get coaching conversations right

Work together on active goal setting

Active goal setting should also be part of ongoing employee-manager discussions. Employees should take an active role in defining their goals and how they align with the greater good of the business. This is a shift in the traditional approach of cascading goals down through the organization. This will also make it clear for employees on how they’re being evaluated, and what is expected of them.

For example, at Ceridian, employees and managers work together to align personal and business goals back up to wider organizational goals. This way, employees are more engaged and motivated by understanding how their work impacts the overall success of the organization. We also put an emphasis on setting goals through the lens of our brand values – it’s not just about what we do, but how we do it.

When developing goals, we recommend that employees set five goals – with at least one personal goal on the list – and make them SMART (specific, measurable, achievable, relevant, and timely). Metrics help to define clear expectations, and ensure that the goals are not only challenging and motivating, but also realistic to attain.

Learn more about goal-setting and performance management

Talk about growth and development opportunities

To truly be effective, performance conversations should focus on the employee, not the organization. This can’t be done with cascading objectives, backward-looking assessments, and once-a-year reviews.

Instead, managers should facilitate career conversations that concentrate on career questions like: what skill or expertise is the employee most interested in developing? And what do they want to be doing in two years? Career growth doesn’t just mean moving up the ladder, but also broadening employees’ skills so they can take on new responsibilities in their current role.

Based on the employee’s answers, managers should then create a development plan that connects the employee’s goals to the organization’s broader, strategic initiatives. Also, it should be clear to the employee how the organization will help them advance their career in return for their efforts and achievements.

Once a career plan is developed, managers should have regular, ongoing conversations to discuss progress, challenges, and refine the plan accordingly. These conversations will help employees better align their efforts to strategic organizational initiatives (which change frequently) and lead to better business outcomes.

Get insights and best practices for performance management: download the free report

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