Building High Performing Teams !
Just the phrase “performance review” tends to elicit a sense of dread in employees, managers, and HR teams. It has the potential to make or break promotions, raises, and even morale. People leaders have long been experimenting with new approaches to performance management –from separating measurement and development discussions to 360° feedback.
The truth is, there’s no one size fits all solution, so it’s critical to understand your organization’s unique needs. Let’s face it, performance reviews can be scary.
Will I be reprimanded? Praised? Promoted? Or even recognized at all? At its best, performance management is much more than a formalized process for measuring employees. It’s actually a powerful opportunity to identify areas for development, which can increase both organisational and individual performance and engagement over time.
Fortunately, many organizations are already moving away from the daunting annual review towards a more ongoing developmental and feedback- driven approach. The most successful performance management processes are those customized to align with your company culture.
Why Performance Management Matters?
The traditional performance review was built in response to rigid organizational structures, and as the workforce continues to evolve, this approach has proven to be outdated for most modern organizations. According to a review of employee polls, only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. There are also a number of unconscious biases that, if left unaddressed, can lead to inaccurate reviews. As a result, employees are not being set up for success since they’re not receiving the actionable feedback they need to improve.
What’s more, most employees and managers find performance reviews to be time-consuming and stressful. Outdated approaches to performance management contribute to feelings of disenchantment that can lower employee engagement and, ironically, lower performance.
One study found that organizations that scored high on culture were 32% more likely to experience high employee engagement and 97% more likely to experience high organizational performance. This indicates that the culture around performance reviews can have a huge, positive impact on critical business KPIs. Further, employees are 3.6x more engaged when they have a voice in setting their own goals and aligning them to company initiatives. Employee productivity increases by 56%, on average, when managers are involved in helping employees align their goals with the needs of the organization.
Laying the foundation
While there is no one-size-fits-all approach to performance management, the following 7 tips will help lay the foundation for a successful process. Use these as guidelines to shape your unique approach:
1. Create a culture of ongoing feedback
Creating a culture of continuous feedback simply means establishing an environment where you have more frequent check-ins around performance, goals, and development. Regular 1-on-1 conversations between managers and their direct reports is a great start. With this approach, annual performance review feedback won’t come as a surprise.
2. Use the right phrases
Words matter, especially when it comes to employee performance conversations. It’s important to use the right performance review phrases during an evaluation to ensure that the feedback is clear, empathetic, and actionable. The last thing you want to do is share comments with your employees that are misinterpreted or don’t give them a clear path forward.
3. Be aware of biases
Knowing that employees rarely consider evaluations to be fair or transparent, it’s important to be extremely cognizant of common biases that can come up during the employee performance review. Biases can lead to inflation or deflation of employee ratings, which can have serious implications in performance reviews.
4. Train your managers
Performance reviews require vulnerability from both employees and managers, so the relationship should be built on trust and transparency. While this may seem obvious, research has found that manager capability is one of the biggest stumbling blocks for organizations. That’s why companies should invest in leadership training, particularly around coaching, candor, and clearing barriers.
Managers need to learn how to enable performance, have difficult conversations, and pave the path for their employees to do their best work. When companies support managers in these ways, studies show that they’re 12% more likely to experience high individual performance.
5. Select the best-fit rating scale and tool
Rating scales and using the right tool are often a necessary component of the employee performance review. They can help companies understand how their employees perform to maximize growth and make it clear to employees what’s expected of them to get a raise, promotion, or move forward in their careers through objective measurements.
6. Learn the art of giving feedback
Giving effective feedback doesn’t always come naturally, but there are many ways to improve. Providing feedback about the things you want people to continue and do more is known as reinforcing feedback. Suggesting things you think someone should do less of or stop doing altogether is corrective feedback. Both forms of feedback can benefit from a few general guidelines, such as preparing your comments in advance. Providing specific and actionable feedback makes it easier for your employees to digest. Giving feedback gets easier with practice, so building a culture of continuous feedback will help strengthen that muscle.
7. Link performance and recognition
Many organizations tie performance to recognition, compensation, and promotions. Given that an employee’s livelihood depends on the performance review, it’s important to make sure your top-performing employees get the recognition they deserve.
For low-performing employees, it’s important to provide actionable feedback and coaching so they can improve. Alignment between performance and recognition will not only help employees contribute to the company’s success, but it will also keep employee morale high.