Performance reviews are common at almost every company around the world but they all come in many different shapes and sizes. As of late the trend has been more continuous reviews, finding that a yearly review while helpful for compensation does little to push accountability, identify problems or provide helpful feedback in the moment. In our last HR survey we found 83% of companies are doing performance reviews. Within those most are doing a standard yearly self and supervisor review, while about 15% are doing a peer review and a small but growing proportion using a more continuous open feedback cycle. In most cases this is still happening with paper reviews though more and more are switching to HRIS and talent management systems that automate many of these processes of collecting and analyzing data. But there are many types of reviews and some are a better fit while others are quickly going out of favor due to new research. Once a review process is completed a number of things can happen. The review may be given to the employee and that will be the end of it, or they may be asked to sign the review as well. Many companies use this opportunity to do a face to face to discuss the things on the self-review and supervisor review.
The company will then use this data to help identify an individual’s core competencies, what their strengths are and whether they might be a good fit for other positions in the company. Performance reviews are almost always used in the compensation process to help paint a picture as to how an employee has contributed to the company and whether this warrants an increased pay grade.
The traditional review process is still the most popular and usually involves an employee filling out a self-review. This can include rating themselves, talking about challenges and goals and highlighting their own accomplishments. The supervisor then offers their assessment and it’s usually finished in a face to face meeting going over the review and goals for the next year. While it may be not the best method, having at least a period of time in the year where you take a moment to step back and look over the strengths and goals of an employee is much better than nothing.
The 360 process is popular in some organizations because it allows other team members to provide direct input on what their experience is like working with an employee; identifying strengths and areas for improvement. A supervisor alone may only see one side of how an employee contributes to a team so getting a full 360 look can provide a much more telling picture on where to focus an employees’ strengths.
There are several models of 360 feedback. Some show the peer feedback only to the supervisor, who then reads it all and condenses it into one final review of the employee. Others provide the peer feedback directly to the employee which is consistent with a more radical honesty culture. If you have a strong culture of open feedback this can be a great tool but if you do not in can create defensiveness and divisiveness. If you provide peer feedback directly to an employee it’s generally accepted that anonymous is better since you both lower your chance for defensiveness and promote greater honesty from the person giving the feedback.
The staple of performance reviews is both the open ended question and a rating scale for competencies. This usually rates on a scale from 1-4 or 1-5, with terminology like Strongly Agree or Exceeds Expectations or Strongly Disagree and Does Not Meet Expectations. With a digital system these are assigned weighted values so averages can be calculated, showing relative strengths and weaknesses personally and in comparison with our members of the organization. These can be helpful to identify strengths but several studies show that focusing on potential weakness can be harmful. People are all wired uniquely and have innate talents that make them useful and unique. While some competency based weaknesses can be developed and improved (especially by mitigating) it’s proven to be much more successful to focus on the strengths and develop those further.
A check-in is usually much shorter than an annual survey and simply asks a couple questions to see how the employee is doing, how they are feeling and what challenges they are facing. It’s frequent, sometimes as much as every couple weeks to every 3 months. Check-in reviews allow employees to also update metric goals so the organization can always know how it’s doing to achieving important targets.
Most typical performance reviews consist of competencies and open ended questions. There has been a trend recently to move less towards rating people on their qualities, which may or may not even be pertinent to the job they are doing and instead rate them on what matters, results. Setting real measurable goals allows employees to be held accountable and to also get treated fairly for what they achieve. An example would be the difference between introverts and extroverts. Extroverts will naturally get higher ratings on competencies like communication, since they thrive and take energy from socializing with people. This bias will not present itself in achieving metric goals though which is based on accomplishment, sales, completing tasks like re-designing a website, engineering a new process, hiring a number of new employees – these are all measurable things that can be tied to a greater goal.
An open peer process can be a hybrid of others, it may involve no supervisors at all but more of an open group feedback process. This allows everyone in a department to continuously give feedback and praise to those in their group and identify obstacles in their path to completing an important project. You can even take the group average ratings and use that to calculate competency scores.
Paper vs Digital
The traditional process of using a paper review is quickly becoming extinct due to not only its time consuming nature but also the lack of useful data. In many cases these ratings are manually entered into an excel file, taking up HR time that could be better used finding great talent or nurturing that which is already within the organization. This was the reason DeepTalent was developed to completely manage this talent management process and allow tracking of goals and identification of strengths.
What To Measure
Performance reviews typically start with defining the goals from the previous year to see what has been accomplished. Then you can find the challenges that were faced, the accomplishments the employee is most proud of and the goals for the next year. Typically there is then a series of competency ratings which may change based on who is getting reviewed. The most common are things like accountability, communication, knowledge & expertise and interpersonal skills. Managers and company executives may have a different survey that is more in-line with being able to effectively manage: communicating with their employees their expectations and giving them the tools and support needed to accomplish those goals. An annual review can still be helpful to paint a larger picture of how an employee is doing and map out their strengths and where they are in their job but it’s highly recommended to also do a more regular check-in, even if all you have is just a couple questions.
Studies show that most people have a hard time processing negative feedback in a positive way and as a result do not enjoy the performance review process. The goal of a performance review should be to motivate as opposed to demotivate people, give them achievable goals and don’t overly focusing on a weakness in competency. Some of the most successful inventors and CEOs on Earth would have scored extremely low on certain competencies but they drove great results because they had the strengths that mattered and were in a position to utilize those strengths.
- Increase employee accountability.
- Reward based on contribution to the organization as measured by peer, supervisor and measurable goal input.
- Identify areas that can be mitigated or developed.
- Identify impediments to progress.
- Identify and develop employee strengths
Using The Data
With the growth of digital HR analytics the opportunities for getting useful data out of the performance management process are greater than ever. Weighted competencies allow you to get averages and easily identify strengths and weaknesses. You can even determine who might be a good management candidate based on very particular strengths. KPIs and metric goals can be used to decide who is really driving growth and award more pay raises to them as opposed to those who are consistently coming up short. In this day and age of constant lawsuits against employers performance reviews can serve as a powerful tool to protect you against losing a case. If an employee is terminated and makes a wrongful termination claim, you can use your quantifiable data showing the employee was holding your company back. At the end of the day it’s all about accountability and finding those strengths within your organization that you can nurture and reward. For those interested in the getting the most out of the performance review process, consider adopting a goal and strength based performance review system.