I have noticed a trend in recent years of articles being published which declare the death of the performance review or which deride them as a waste of time. In this latest post, I offer the counter view that the performance review is not the problem, but that it has had its reputation sullied by the following common contributors to ineffective performance reviews:
1. Performance appraisals rather than performance management cycles. A performance appraisal is a one-off event with little link to business strategy. A genuine performance review should be the final phase of a performance management cycle (annual or six monthly) which commences with setting performance objectives linked to business goals. This distinction is the critical factor which determines whether performance reviews are perceived as just another bureaucratic HR process or a valuable business tool.
2. A dearth of SMART objectives. Despite all the talk about and training in setting SMART objectives they are still all too rarely seen. This renders the performance evaluation too subjective and people lose trust in the fairness of the process. Setting SMART objectives requires a commitment of time and energy and a ruthless approach to making them SMARTer.
3. Objectives not really 'agreed'. Despite being 'agreed' objectives, in some instances there is little in the way of meaningful discussion between the manager and team member in establishing truly agreed objectives. This can occur in one of two ways: 1. The manager almost unilaterally sets the employee's objectives, or 2. The manager simply tells their team member to come up with their own performance objectives which they will approve. In either case, real discussion, thinking, buy in and collaboration is missing and therefore neither party is likely to take the process too seriously.
4. Too many performance objectives. A common mistake is developing performance objectives to cover almost every aspect of someone's role which ends up resembling a position description rather than being a concise list of performance objectives. If a team member has to regularly refer back to their performance agreement to know what is expected of them then there are probably too many objectives with many of them irrelevant to key outcomes and behaviours required in the role.
5. Failure to review the relevance of the objectives throughout the performance period. Priorities and circumstances invariably change across a twelve month period and therefore so may a person's performance objectives. For example, if a salesperson had agreed sales targets set just prior to the global financial crisis, those objectives would need to be revised during the cycle in light of external factors beyond the salesperson's control.
6. Failure to record relevant achievements and feedback throughout the performance management cycle. Of course many managers will dread performance review discussions if they aren't prepared with evidence to back up their evaluation of an employee's performance. Most online performance management systems now have journal functions which provide for easy recording and organising of performance information, and importantly, these journal entries can be utilised as part of the end of cycle performance review.
7. Performance review conducted but little regular feedback provided throughout the year. We all know that a performance review is no substitute for managers providing day to day feedback, coaching and development for their team members, it merely complements it. No matter how well a manager conducts a performance review, if they haven't provided effective feedback and coaching across the entire cycle, the performance review will lack authenticity and effectiveness.
Performance reviews, if conducted as part of a performance management cycle supported by meaningful performance objectives and regular feedback and coaching, are a valuable tool for evaluating employee performance, identifying development opportunities and providing recognition. Yes, contrary to the rumours, performance reviews are an effective engagement tool for managers!
So please, don't hate the performance review.