Understanding Performance Reviews

Topic of the month: Performance Reviews

Book: How To Say It Performance Reviews: Phrases and Strategies for Painless and Productive Performance Reviews by Meryl Runion Rose & Janelle Brittain (Board Prep and Performance)

Research Article: London, M., & Beatty, R. W. (1993). 360‐degree feedback as a competitive advantage. Human Resource Management, 32(2‐3), 353-372.

Keywords: performance reviews, continuous feedback, peer reviews, self-assessment, 360-degree feedback

As we approach the end of the year, many of us brace ourselves for annual performance reviews. Whether you are a manager leading these discussions or an employee participating in them, it is important to understand the limitations of this traditional approach and explore alternative methods that can drive meaningful growth and engagement.

Let us explore the concept of performance reviews.

What are Performance Reviews?

Traditional performance reviews, though ubiquitous, often fall short of their intended purpose. Traditional annual or semi-annual reviews can often feel like a formality, disconnected from the day-to-day work experience. This can lead to a lack of engagement and a sense of detachment between employees and their managers. Additionally, the pressure to summarize an entire year's performance in a single meeting can make it difficult to have meaningful conversations about growth and development.

At their core, performance reviews involve a structured assessment of an employee's performance against predetermined criteria. A formal meeting is typically scheduled to discuss the employee's strengths, weaknesses, and areas for improvement. Together, the manager and employee set goals for the future and develop a plan to achieve them.

Generational Differences

As generations in the workplace evolve, so too do their expectations around performance reviews. While older generations often prefer traditional annual reviews, younger generations tend to favor more frequent feedback. This generational divide can impact employee morale, productivity, and overall job satisfaction. To bridge this gap, organizations may consider implementing more frequent check-ins, continuous feedback mechanisms, or quarterly reviews, accommodating the diverse needs and preferences of their workforce.

Limitations of Performance Reviews

Traditional performance reviews are often used to assess employee performance for the purpose of making decisions about rewards and opportunities. For example, performance reviews are conducted primarily for evaluation and they have organizational consequences, such as pay treatment and opportunities for job assignments, transfer, and promotion (London & Beatty, 1993). This can create a narrow focus on past performance and limit their potential for driving continuous improvement and development.

Despite the intent of performance reviews to address individual strengths and weaknesses, the focus frequently leans towards unit performance. Supervisors, responsible for their team's output, may prioritize results over leadership development (London & Beatty, 1993).

Alternatives

Many organizations are embracing alternative approaches to traditional performance reviews.

Continuous feedback, for example, involves regular check-ins between managers and employees to provide ongoing feedback and recognition rather than a single review at the end of the year. This approach fosters a culture of open communication and allows for timely adjustments to be made. An advantage to this approach is that corrections and improvements can be made much sooner and employees have a chance to improve before developing bad habits or facing uncertainty in their jobs.

Peer reviews offer another valuable perspective. By soliciting feedback from colleagues, organizations can gain a more comprehensive understanding of an employee's strengths and weaknesses. This can lead to more accurate and actionable insights. The dynamic between an employee and their peers can be much more relaxed compared to the dynamic between an employee and their supervisor. With this approach, it is critical to ensure that the feedback is objective, of a high quality, and free from biases (positive or negative) that can occur if the employee considers their peers to be friends or not.

Self-assessment empowers employees to take ownership of their professional development. By reflecting on their own performance, employees can identify areas for improvement and set realistic goals. This can lead to increased motivation and a greater sense of autonomy. This assessment is commonly conducted using scales, with some open-ended questions to allow the employee to expand on their thoughts.

360-Degree Feedback can be thought of as a more well-rounded alternative to traditional performance reviews as the feedback comes from various perspectives.

One article explored the state of 360-degree feedback in organizations and the authors discuss ideas for how to optimally use feedback from multiple constituencies as a competitive advantage (London & Beatty, 1993).

Instead of relying only on the perspectives of the manager and the employee, this approach incorporates anonymous feedback from a wider range of sources, including peers, other managers, direct reports, and sometimes even customers and vendors. Some organizations choose to integrate 360-degree feedback results with performance evaluation (London & Beatty, 1993).

This multi-rater feedback process provides employees with a comprehensive "360-degree view" of their performance, highlighting strengths and areas for improvement. This approach can help employees develop greater self-awareness, enhance their interpersonal skills, and accelerate their career growth. Moreover, managers can use this information to provide more accurate and constructive feedback, leading to improved performance and engagement.

360-Degree Feedback as a Competitive Advantage?

To fully realize the strategic potential of 360-degree feedback, further research is needed to explore its link to sustained competitive advantage. By leveraging 360-degree feedback to improve work unit performance, develop leadership competencies, and enhance customer satisfaction, organizations can position it as a powerful tool for achieving a competitive edge (London & Beatty, 1993).

The Bottom Line

Performance reviews are a common practice, but traditional annual formats can feel outdated. Alternatives like continuous feedback, peer reviews, self-assessment, and 360-degree feedback offer a more dynamic and development-oriented approach, fostering better communication, motivation, and a more holistic view of employee performance.

As always, thank you for your support of my mission to help make I/O topics, concepts, and ideas more accessible to all. I/O Psychology has a marketing problem, and I believe that it is my obligation as an aspiring I/O professor to fix that.

References

London, M., & Beatty, R. W. (1993). 360‐degree feedback as a competitive advantage. Human Resource Management, 32(2‐3), 353-372.

Schosser, A. (n.d.). Pros and cons of the 360-degree performance appraisal method?. Identify and Drive Winning Behaviors. https://www.retorio.com/blog/pros-and-cons-360-degree-performance-appraisal-method