End of the year evaluations remain a staple in the working world despite their challenges and overall lack of effectiveness. Sometimes this lack of effectiveness is the result of a poor performance evaluation system, and sometimes it is due to how the evaluations are conducted. In far too many cases, it is both.
On a systemic level, poorly-run processes often 1) place employees in competition with one another for a limited pot of money, 2) leave employees unsure of what is expected of them and 3) reserve an entire year’s worth of feedback for one fateful end of the year evaluation meeting. This last one can be especially disastrous. Performance reviews are not the time for surprises. In fact staff should know exactly what to expect. Most everything they are about to hear should have been shared far before this important day.
On a managerial level, those conducting reviews are often ill-prepared, do not find value in the process, and do not have the knowledge or skills to facilitate the process effectively. As a result, they often ask staff to jump through unnecessary hoops like writing self-evaluations that no one ends up reading or sitting through performance review meetings that provide no value. All in all, it is a flawed system that is long overdue for a change.
As it stands, only 8% of managers believe their company’s performance evaluation system contributes high value while nearly 60% think they are not an effective use of time. And what a use of time it is- an average of 210 hours per manager per year! As a result, some major organizations, such as Price Waterhouse Coopers, Deloitte and Accenture have done away with evaluations altogether. This remains, however, a rare exception as more than 90% of organizations still conduct performance reviews. These organizations hold fast to their current systems despite their shortcomings while others want something better but simply do not know how to make that happen.
One of the biggest challenges with employee evaluations is that they are frequently conducted only once a year. Employees are denied valuable feedback throughout the year only to be told at the end of the year that they are being rewarded- or penalized- for performance that was never previously addressed. This type of system guarantees dissatisfaction. This is especially true of our younger working generations, a third of whom report crying after a review and 30% of whom have quit a job following a review. Of those who stay? Nearly 30% experience decreased performance after their respective reviews.
Something is not right.
Research has shown repeatedly that employees not only crave feedback, but that they greatly benefit from it when it is provided effectively. Receiving frequent, effective feedback throughout the year is highly correlated to several positive outcomes for organizations and their employees including increased performance, increased job satisfaction and increased staff retention. We know this, yet far too many employers continue to implement a system that stores its feedback like a squirrel getting ready for the winter. It should be obvious how ineffective and unfair this is, particularly when evaluations are tied to raises and promotions that are denied to staff who were not informed of what they were doing- or not doing- to receive or not receive them.
Every company has different needs and different structures, so employee performance review systems should naturally have flexibility to align with a company’s values, culture and capacity. At the same time, there are some universal guidelines that all companies should employ in order to make the most out of not only their employee evaluation systems, but from their employees themselves.
Honesty– During reviews, managers should be as honest as possible in both their praise and in identifying areas of growth. Too often, managers choose one side or the other by either criticizing exclusively or by sharing praise only. Neither one is effective. Every employee has strengths and every employee has room to grow. Respect your employees enough to be honest with them and let them know where they stand. Particularly when it comes to their money and their futures. You are not doing anyone any favors by sugarcoating the truth or by unnecessarily finding fault.
Transparency- Your employees should know exactly what they are being evaluated on and exactly the process within which they will be evaluated. Share the forms, metrics and processes and how they will affect your staff’s money and role ahead of time, ideally, during the employee’s onboarding and orientation. Make sure all expectations are clear and that your staff have whatever they need to meet those expectations.
Fairness- As a manager, you retain your status as a human being, and as a result, there will be staff you connect with more strongly and more easily than others. There are many reasons why managers play favorites, and there is almost no way to hide it. Employees are constantly watching you, and they learn quickly who is the favorite and who is not. As much as possible, treat all your staff fairly and equitably. Be conscious of your natural feelings and do what you can to be respectful, honest and fair with every staff member regardless of your personal feelings toward then. This holds especially true when you are doling out praise, raises or promotions.
Confidentiality– An individual’s performance is not the business of any other member of your team. Evaluations and other information pertaining to your staff should remain private at all costs. Outside of you and your HR department, you should never, ever, ever, disclose performance issues or personal issues going on with your staff to other members of your team. If you break this trust with even one employee even one time, it is unlikely your reputation and your relationship with your entire team will ever recover.
Comprehensiveness– Many managers suffer from recency bias when it comes to annual reviews. Instead of looking at the entire year as the process is intended to do, unprepared managers focus on the performance that they can remember. Instead of tracking performance throughout the year, annual reviews disproportionately reflect the last quarter. To avoid this, track employee performance throughout the year and capture it accordingly during the end of year review.
Boringness- The best performance reviews are boring. This should be the goal. There should be no surprises, and everything included should have been discussed repeatedly throughout the year. Instead of providing new information, effective performance reviews simply gather information that has already been discussed. All the praise should have been shared generously throughout the year as warranted and in a timely manner. Similarly, any areas of concern should also have been shared openly throughout the year as warranted and in a timely manner.
Future Focus- By focusing exclusively on the past year, you and your staff are missing out on a valuable opportunity to discuss the past through the lens of the future. What did they learn that they will carry forward? What will they continue doing? What will they do differently? What are their plans and goals? How can you best support them? You should spend as much if not more time discussing the year ahead as you do the year behind.
As a manager, you should be creating an environment of open communication throughout the year. A central component of this is having regular one-on-one meetings scheduled with each of your staff members where feedback is shared consistently. You should not go any longer than a month without talking to each member of your team. This consistency will help normalize a feedback culture among your team and will provide ample opportunity to provide the support your staff need and deserve. During these meetings, you should monitor goals, recognize accomplishments, give and receive feedback and provide coaching for your staff’s development and growth.
When you meet with your staff on a consistent basis; create a culture of trust, openness and honesty; lead with integrity, respect, honesty and transparency; and make your staff a priority, you will have created a performance management system that operates and supports your staff throughout the year. And then when it is time for end of the year performance reviews, your staff will be comfortable and prepared for the conversation. It will be the most wonderfully boring meeting of the year.
As a manager, it is your role to make sure your staff are valued and recognized for their work. Use your position to help your organization create and maintain a performance evaluation system that seeks to reward and recognize your staff’s contributions, not spring unexpected bad news, leaving your staff to feel devalued, frustrated and potentially motivated to leave. Commit to implementing a culture of praise, coaching, support and growth throughout the year. When it comes time to formal performance reviews, take them seriously and learn to do them well. Strive to make your performance evaluations the most boring meetings you have all year.
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