Feb 10, 2021
Performance reviews can be a great tool to show support to employees, deal with any performance issues and keep them motivated. However, done wrong they can be a waste of time and lead to employees feeling unappreciated and unmotivated.
“A study found a managerial behavior based on fairness principles has a positive effect on satisfaction with and acceptance of assessment processes. In addition, the manager's conversation behavior has a direct influence on other employee reactions, such as the employee's motivation to improve their own performance, their job satisfaction and the trust that the employee places in their manager.”
The majority of employees find performance reviews a negative experience, is it so important to make these reviews a positive and instructive experience and avoid reviews that end up demotivating employees. Personio identifies 4 main reasons that lead to negative performance reviews and how to avoid them.
1. Frequency. Performance reviews often do not take place often enough. They are typically carried out once a year. Once a year means that employees have to wait a year for praise and only receive it once, additionally it reduces the ability to make any improvements if there is an issue. Instead performance reviews should be carried out every quarter or at the end of specific projects. The more frequent the better so even doing very short 5 minute weekly reviews in addition to longer quarterly reviews can be great to keep an eye on performance and pick up on any issues as they arise.
2. Transparency. A second mistake often made is that reviews are not transparent. Employees often don't understand what they are evaluated on and why they receive the feedback they do. It needs to be made clear what employees performance is based on such as targets met, KPIs, performance in relation to company core values ect. A way to do this is for managers to keep consistent notes on employee performance throughout the quarter in the lead up to the review which they can refer to. Employees should be 100% aware of what the performance reviews are measuring.
3. Employee tailored reviews. Often reviews are not tailored to the individual employee but are standardised across the whole workforce. Performance reviews should never be the same for all employees regardless of their department and position. Companies hire candidates due to different skills and strengths and to fit different roles. You cannot review the performance of a salesperson who has been hired due to their charisma and ability to talk to and charm people in the same way as a senior data expert who has been hired for their impressive skill with numbers. Due to this you can't judge employees' performance the same way, the objectives, goals and review have to be tailored to the individual. This is the key to keeping employees motivated.
4. Preparation. Managers are often so busy that performance reviews are poorly prepared and almost pointless. As it gets closer towards review season and managers have to plan numerous meetings, the risk for reviews to become monotonous, dull and negative becomes high, meaning reviews are rarely motivational. You can't fully appreciate your employees without preparation and being able to point out specific performance highlights. Reviews should be planned and prepared in relation to each specific employee - again this is where continuous notes come in useful.
Performance reviews should be positive experiences and a great opportunity to show your appreciation for their work and dedication. To make this process run smoothly and more easy to prepare reviews make sure employees are set clear goals, OKRs and KPIs that can be referred to. See more on how to set up OKRs in our blog here: https://www.dimpact.io/post/okrs-goal-management-1
Here are some great tips for conducting a great performance review including before and during the meeting.