This is what you didn’t know about performance reviews
One of the critical aspects to consider when bringing change to your performance management cycle is how you define the process of formal reviews. There are a whole range of views out there about how to approach this from abandoning reviews altogether new style performance reviews. But, what are the options open to you, and what precisely do they entail?
In this blog, we set out the options for you and help you shape a review process for your organisation. But, before we begin I’d like to start with a couple of misconceptions we regularly come across.
Misconception 1: Regular 1-to-1s are the new way of doing reviews
Many people think that having an ‘ongoing dialogue’ in the form of regular 1-to-1s is an alternative to traditional performance reviews. In our view, however, these are two different things. No organisation will dispute that having a regular discussion with employees on their goals, development, wishes and ambitions is a good thing. However, this has less to do with their performance review and much more to do with encouraging growth and furthering engagement.
So, regular 1-to-1s are absolutely an important part of the performance management cycle, but whether or not you have a formal review process is a completely different question.
Misconception 2: The review as a place to give bad news
Performance reviews are commonly seen as a ‘natural moment’ to tell an employee that they are not performing well. It might be convenient, but it doesn’t stop it being a bad idea (and precisely the reason why performance reviews are often experienced as so stressful). When you think about it, it’s in no one’s interest that any performance issues should continue for any longer than they need to.
If an employee is underperforming, they have the right to know. This creates transparency and gives the employee the opportunity to do something about it. So, it is important to address any such issues immediately to identify the cause and jointly work out how to bring the employee’s performance back up to par.
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The purpose of reviews
Before defining precisely how you want your review process to look, it is important to have a clear understanding of the purpose of performance reviews. The aim is not to further growth and engagement among your employees (misconception 1), nor is it to push them to perform better (misconception 2).
The purpose of the review is to settle the formal aspects of the process. Not sexy, it’s true, but that doesn’t make it any less important. Setting a possible salary increase or giving a promotion are typically matters you would want to decide as part of a properly underpinned, formal process.
With this in mind, two questions are important when defining your performance review process:
- How do you structure the review process?
- Who does the review?
How do you structure the review process?
Here are some options to consider when defining the points at which reviews should take place.
Traditional review process, but better
The traditional performance review process often consists of a couple of meetings a year. We have previously written about why the traditional performance management cycle is on the way out. That’s doesn’t necessarily mean though that having one formal review say once a year is a bad idea.
The critical thing is that the review should not hold any surprises. For this to happen, it is important that employees get sufficient input on their performance throughout the year. You can do this by having employees regularly reflect and gather feedback on their performance, but most importantly by having regular 1-to-1s with them on their progress and development. The challenge is ensuring this happens in practice.
Finally, it is important to realize that having a set time for a formal review does not dictate who it is that actually does the review. You could stick with convention and leave this in the hands of the manager, or there are some alternatives you could consider. See who does the review?
Stop doing reviews
In organizations where pay rises are fixed by set salary scales and periods of service and where the potential for career development is limited, a formal review process may not be necessary. Clearly, you will still want to maintain a dialogue with employees about goals, development and job satisfaction. But, it then adds little to link an ‘opinion’ to it.
In reality, this is only an option if the individual performance of employees does not play a role in pay and career development.
Make performance management simple and effective?
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’Unscheduled’ performance reviews
Some organisations that want to do away with performance reviews at set intervals, but cannot or do not want to do away with reviews altogether, opt for ‘unscheduled reviews’. This means that a manager can instigate a review on their own initiative at any time. The idea behind this approach is to be able to recognise the efforts of an employee who performs outstandingly or develops rapidly,
based on the assumption that the majority of employees will continue to perform their role well while a small minority will truly excel and go above and beyond. It is precisely these high flyers that you want to recognise and reward with an extra pay rise.
Incidentally, the initiative does not necessarily have to come from the manager. You can also choose to let teams, colleagues or the employees themselves instigate an unscheduled performance review.
The risk of a system with unscheduled reviews is that they become arbitrary. Some managers will move to setting up a review faster or more frequently than others, and some employees will be more assertive in this respect than others. Beyond that, there is a risk that the option of holding an unscheduled review will not even come up for consideration in the pressures of day-to-day work.
To avoid this happening, you could pinpoint a couple of times throughout the year when managers (or teams or employees) specifically consider whether someone should be considered for an extra pay rise.
Who does the review?
In addition to setting up a system for reviews, it is important to define who actually does the performance review (that is, if there is one). Traditionally, this is often the manager. This is simply how it has developed over time, but its downsides are increasingly being felt. Apart from being very demanding on managerial time, it inevitably carries with it the explicit risk of a one-sided view. Moreover, you then make employees very dependent on their manager (rather than taking ownership of their own development, for example).
There are a number of alternatives that are being taken up in more and more organisations.
Team review
In settings where people work together closely as part of a team (e.g. self-organising teams), you can opt for peer review by members of the team. After all, if you work together closely with others in a team, you are going to have a very good idea of your colleagues’ talents and areas for improvement (probably much more so than the manager). Not only that, you are directly concerned in how your colleagues perform as, when everyone in the team is working well it makes your job easier, more enjoyable and you get better results.
The other side of the coin is that employees will often feel uncomfortable at the thought of giving an opinion on their colleagues or having to ‘lay down the law’ where relevant. So, you are bringing a new dynamic to the team that is not necessarily going to further productivity. Whether or not it works will depend very much on the maturity of the team and mutual trust among its members.
One example of an organisation that works with team performance reviews is Garansys. Read some of their personal experiences here.
Self-evaluation
A second alternative is for employees to do their own performance reviews. It might sound quite scary, and it probably is :-). Scary for the organisation, because who’s to say employees won’t paint themselves in terms that are too glowing? Scary for the employee too – how do you evaluate yourself honestly and fairly, without shortchanging yourself?
Therefore, it is important to help employees get a realistic picture of their own performance. Consequently, organisations that opt for self-evaluation often place requirements on the process. For example, about when to take time for reflection, gathering feedback and talking to colleagues. This ensures self-evaluation is a logical outcome of a process rather than simply a subjective snapshot.
Self-evaluation fits perfectly in a performance management cycle where you put ownership fairly and squarely with the employee (see our blog about ownership). It demands that employees have the capacity to reflect maturely on their performance and, more than anything, the confidence that employees will act in good faith.
EMC Performance is one organisation that has opted for self-evaluation.
You decide how to shape your performance review process
Now it’s up to you to decide how you want to shape your performance review process. Are you going to bother with performance reviews at all? If you are, how and who is going to do them? Rest assured, there is no right or wrong way: it is a process, one you will want to adapt based on what you learn as you go along.
Jochem Aubel and Stefan Op de Woerd are the founders of Dialog, surprisingly simple software for an effective performance management cycle. Want to know more about how Dialog supports employees and managers to achieve this? Take the product tour.
Read on..
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Why the traditional performance management cycle is on the way out
The days of traditional performance management are numbered. It simply doesn’t serve its purpose any more. What can you do about this?
