June 5, 2009

Employee Performance Review Process Part 1: Challenging the Status Quo

Few things bring me more satisfaction in my career as an HR professional than when I can take an old process and apply new and innovative approaches to make it better. Is it just me or do you notice that when we keep doing the same things year after year, not only do we lose sight of the original intent, but the tradition becomes almost sacred to us and we find ourselves defending it as if it were something to be adored and revered? When that happens, you know it is long overdue for a process makeover.

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One of the greatest challenges we face as HR professionals is what to do about the employee performance review process. Few processes have withstood the test of time like the performance review process. Under the facilitation of HR, managers complete employee performance forms, write comments, determine performance ratings that coincide with salary increases and sit down with employees to review the good and the bad.

Can this method of employee performance appraisal be challenged? Is there a new and improved version that is out there that more effectively can transfer the necessary feedback from manager to employee? Well, I think the answer to this is yes and no. Employees need feedback and in many organizations, the performance review process is the formal means by which that is accomplished. It is fairly straightforward and we’re all used to it. So if it isn’t broken, why fix it?

Yet, in some ways, the current method of employee performance appraisal is broken and does need some fixing. Some organizations have done a good job of addressing shortcomings in their performance review process, but others may struggle with what to change and how. So, in this three part series on employee performance review process, let’s audit our current approaches and see if it is time to upgrade to a newer model.

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How to Determine Your Overall Performance Review Objectives

A good place to start thinking about employee performance review is to ask yourself, “What does my organization want to accomplish with our performance review process?” Here are some guidelines to help you answer this question:

Employee performance appraisals must be tied as closely as possible to business achievement. If most of your employees are getting “glowing” performance evaluations and the company is not meeting its business objectives, then your performance review process needs an overhaul.
Your performance review process must be an efficient way that managers can get clear, effective and accurate feedback to their employees. The manager must be able to clearly communicate his or her expectations of performance. That may be stating the obvious, but there are distractions and they must be minimized as much as possible.
Effectively communicating feedback is a core competency for a manager. Your performance review form and process must help ensure this occurs.
Performance review forms have a “shelf life.” Most performance review forms are good for about 3 to 5 years. After that, they will begin to lose their luster. This is a challenge for the HR professional. Changing out a performance review form every 3 to 5 years may seem like a low priority on the HR projects list, but doing so can significantly increase the effectiveness of your process and be positively received by your managers.

The first two of these four recommendations are addressed below. The second two will be covered in future posts.

Be Smart About the Timing of Employee Performance Reviews

A key factor in tying your performance reviews to business goals is when you schedule the review meetings. Many organizations give employee performance reviews on their employee’s anniversary date. The managers may like this because it spreads the workload out over the year. But, giving performance reviews on anniversary dates makes it harder to tie performance to the overall organization’s objectives. Business objectives and goals are probably done on an annual basis and most likely will follow the fiscal or calendar year. One of the best approaches to ensuring that performance review criteria is synchronized with the organization’s objectives is to move employee performance reviews to an annual cycle, as well. For example, if strategic planning is done in Q4 and financial results are completed in Q1, then employee performance reviews could be scheduled for the beginning of Q2. Performance reviews can be designed to address the employee’s achievements as they relate to the organization’s achievements and goals can be established for the employee that tie in to the new business goals for the new year.

Make Employee Performance Reviews a Priority

In my experience another issue with the timing of the traditional performance review process is that both managers and employees can struggle with the process and delay their review meetings or conduct them quickly or superficially. There are many reasons why this occurs. Sometimes it is related to a poor performance review form. Sometimes it is related to the performance review process and other times it is related to the ability of a manager to give feedback and their concern for how the employee will receive it. Even though delays can happen, a manager must make every effort to ensure employee performance reviews are not delayed.

Give Honest Feedback

Let’s move on to the second point about a manager’s ability to communicate effectively with their employees. Managers need to remember that constructive feedback is an investment in employees. When an employee receives an honest assessment, more times than not, they will appreciate it. If an employee’s performance gets worse after a manager’s honest assessment, it is time for another meeting to give them some more honest feedback.

Employees may say, “My manager doesn’t really know what I do. She doesn’t give me very specific feedback” This is a real problem especially in situations where a manager has multiple reports. But, on the other hand, a manager will lose credibility with their employee if they aren’t careful about what they say in a review. A manager must be able to back up anything said in an employee performance review with examples.

Now that we’ve covered some ways to improve the overall performance review process, next time we’ll get into specific tips for getting the most out of the actual performance review meeting. I’ll give you my ideas on how managers should communicate feedback and what topics should and should not be discussed during a performance review.

Regards,

John Sporleder

Founder and President, Sporleder Human Capital
john@sporconsulting.com

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