Is your company still conducting annual performance reviews? If so, are they also conducting routine check-ins throughout the year or providing continuous feedback? Are there action items and next steps that you can take to work towards your goals? With remote and hybrid work arrangements and new generations with new expectations, employees want to know how they’re doing and how to improve.
According to SHRM, a survey done by Workhuman showed that 49% of companies provide annual or semi-annual work reviews, 7% don’t provide any type of review, and 28% have quarterly reviews. Gallup research has shown that 95% of managers are not believers in their company’s review system and less than 20% are motivated by their reviews. Unengaged employees could be costing US companies more than $1.5 trillion annually.
This is an issue that has been around for decades, likely since the performance review was invented. Millennials and Gen Z however are two generations that are more focused on their personal growth and pushing for more productive performance review methodologies.
Historically, performance reviews were focused on your work over the past year, looking backward. They are also forward-looking today, including career development opportunities like upskilling and reskilling, employee engagement, and if needs are being met to be productive.
Marcus Buckingham of ADP Research Institute says, “Every single human alive today is a horribly unreliable rater of other human beings.” His belief is rooted in unconscious biases we have or, as he calls it, idiosyncratic rating effect. The way managers rate is a stronger reflection of themselves than it is of the employee.
It doesn’t help that the majority of roles do not have quantifiable outcomes, especially through the lens of competence or talent. Buckingham adds, “I’m going to rate you on a theoretical construct like ‘strategic thinking’? Everybody knows that’s rubbish.” While this data may be inaccurate, it’s easier than helping managers improve their skills. “Because we don’t educate our managers on how to have some of these conversations, we’ve decided that the solution is to give them really bad ratings systems or really bad categorization systems.” Don’t expect data to go anywhere anytime soon. “Data driven” decision making has become a buzzy way to imply that decisions are based on facts that can optimize performance.
SHRM provides tips to improve the performance review process, for more detail on each step, you can visit the article.
- Don’t limit conversations to once or twice per year
- Set performance goals and expectations at the beginning of the year
- Explain how their position and department fit into the company’s overall strategy
- Simplify the process
- Consider a 360-degree approach
- Eliminate proximity bias
- End recency bias
- Solicit feedback from employees
- Don’t discuss compensation during reviews
Getting performance reviews right should also take into account your organizational culture. Are employees measured on how they align with the company’s core values? And are employees who are not embracing core values being held accountable for their behaviors? If not, it might be time to talk with Human Resources about how this aspect can be added to the review process.
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