How well is your current employee performance review process working?
More specifically, does your process really give employees the information, feedback, and motivation they need to improve their performance? Or could it inadvertently be contributing to poor communication, low morale, and disengaged employees that are likely to leave your company?
What’s Wrong With Employee Performance Reviews Today?
Most experts now report that the concept of a once-a-year performance review is an outdated idea that, at best, may not contribute to significant performance improvements, and at worst, may lead to more drastic outcomes—such as employee turnover.
In fact, there are four common issues with employee performance reviews as we now conduct them:
1. Annual Performance Reviews Aren’t Frequent Enough
This is an outdated approach because employees need feedback and input on goals much more frequently.
When you really think about it, employees need monthly, weekly, and possibly even daily feedback on their performance. In fact, a recent study by OfficeVibe found that 96% of employees reported that they would like to receive feedback from their managers more regularly. This information gives them the valuable coaching they need to improve their performance and overall contributions. It also recognizes them for specific or ongoing contributions.
2. One-Sided “Conversations”
Too often, employee performance reviews turn into a lecture that is dominated by the manager, one that may even spend too much time focused on what the employee did wrong in the past year.
This type of approach misses out on the opportunity to have a true conversation with each employee and foster the open communication needed to understand underlying issues or focus on what will really improve overall performance.
3. Reviews That Don’t Focus on Development of Skills
Just about everyone would agree that the goal of employee evaluations is to provide specific feedback that will help the employee continue to develop their skills—and their ability to contribute to the organization.
Yet so many evaluations fall short for the simple reason that they don’t do enough. So many managers fail to engage with employees by asking what they think they want or need, such as special training, skills building, or other resources.
4. Too Much Emphasis on Compensation
Too many companies tie annual employee performance reviews to compensation, specifically, how much of a pay raise each employee will receive.
When employee appraisals are overly focused on employees’ raises, they lose their ability to help employees learn and grow.
Tactical Issues With Employee Performance Reviews
There are other issues with most employee performance reviews too. While some companies would consider these “minor,” they are actually representative of larger, more systemic issues and should also be addressed.
This includes process steps such as:
In this case, the little things add up quickly and point to the need for a better way to conduct employee evaluations and manage their overall performance throughout the year.
7 Ways to Improve Your Employee Performance Reviews
So how can your company overcome these challenges and implement a better employee performance review process? For starters, we recommend implementing powerful, proven performance management solutions that are a part of a larger suite of HR solutions.
This technology automates the entire appraisal process and offers other important functionality to set and track goals, monitor progress, engage employees with 360-degree reviews, and improve employee evaluations.
Here are seven ways you can improve your current approach to managing employee performance reviews.
1. Increase the Cadence of Check-Ins
As discussed earlier, managers should provide employees with feedback much more frequently than once a year. The entire company should encourage, or even require, more frequent employee performance reviews and empower managers with the best tools and skills possible to coach employees in real time. This is the best way to recognize contributions, correct potential issues, and continue to give workers the ongoing feedback they crave.
2. Set Quarterly Performance Goals
Related to the point above, companies will always benefit from more frequent reviews, even down to quarterly reviews and check-ins. Millennials in particular love positive feedback, especially when it’s delivered at the moment they “earn” it. More check-ins give managers an opportunity to offer praise and other information to help them improve performance and develop professionally.
3. Provide True Coaching and Training, Not More Speeches
Managers should think of reviews as an opportunity to provide valuable coaching and training input (and resources), instead of more ways of managing and supervising employees. There’s a real opportunity to use employee performance reviews and ongoing feedback to help develop the employee rather than just pointing out specific problems.
4. Implement Employee Self-Evaluation Programs
The company should also encourage employees to think about and assess their own performance. They should consider what areas they excelled in as well as the opportunities they have to improve. Managers can even ask if they have feedback for the company itself.
5. Ask Their Peers
Related to the point above, managers can also expand typical reviews to include the employee’s peers or team members. This can be an effective way to get information that might not come out during a typical performance appraisal.
6. Take Advantage of Technology
Companies must move past manual, paper-based systems that contribute to too many errors and inefficiencies. Today, performance management software offers proven technology that automates and simplifies the entire process.
7. Manage the Entire Employee Evaluation Cycle
Performance management systems help by automating the entire process. These tools give ways to centralize feedback, take advantage of goal tracking, and even connect to employee engagement and rewards platforms to offer praise and kudos.
Consider a Better Approach to Employee Performance Management
If every challenge is truly an opportunity in disguise, most companies today are facing a real chance to improve their employee performance review process. Taking advantage of performance management solutions enable companies to truly engage employees, give them the tools needed to improve performance, and align their efforts with the company’s specific goals.
To learn more about HR Cloud and our innovative approach to employee performance management, please download our guide to “Performance Review Phrases You Should Use (and Some to Avoid)” today.