With all of the changes over the past several
years and the shift of the Human Resource profession from a tactical to a
strategic focus, one of the questions we hear from our client’s is the annual
performance review relevant in today’s business environment? Businesses today are driven by metrics and
the HR programs that have been in place for many years need to be evaluated to
determine if they are effective.
Given the survey data we believe that the
annual performance review is a valuable tool to motivate and ensure high levels
of performance. To support this position
we examined our survey data in order to determine what our clients and
respondents are saying about this key management responsibility.
What is
a Performance Review and How Do We Define this Process?
The performance review is a mechanism
to document an employee’s skill level based upon a clear understanding of the
duties and responsibilities of the job and the results expected. Performance reviews have been viewed as an effective
tool for management to help motivate and maximize performance and productivity. It is also a way to outline career goals and identify
expectations for the future. The
performance review if consistently applied across the organization can facilitate
a ranking mechanism for management which helps identify high-potential
employees as well as provide succession planning services for key positions in
the company.
Do Employees find Value in the Process?
Based upon our employee survey data areas of employee
satisfaction with management are varied; however, employees find the management
responsibility of conducting the annual performance review very important for
ensuring high levels of performance along with the maintenance of superior employee-management
relations. Holding all employees accountable
creates a team environment where honest and constructive feedback is valued. Employees; however, do not view the annual
performance review as an isolated event but rather a
continuous process.
Do Managers find Value in the Process?
Our survey data
suggests that the need for managers to motivate employees through a progressive
performance review process facilitates a stronger organization which allows the
employee to grow professionally. The
opportunity to present a strategy for continuous improvement and tie pay to
performance along with recognizing excellence on the job creates an environment
that is more innovative and creative. If
done properly, managers believe that the annual performance review can retain high
performers and lower turnover. Furthermore,
if performance, pay and incentive plans are linked the performance review
process will have more significance and importance.
What is the Problem with the Annual Performance Review?
With managers and
employees finding value in the process why are there so many issues with this key
Human Resources program? Managers will
often wait to deliver bad news to the employee during the annual performance
review rather than addressing any challenges immediately. This approach creates the environment where
the employee can’t alter their behavior or make changes until it brought to
their attention and by then it is too late.
Employees will often not want to appear lacking in their performance and
when challenges surface they are reluctant to bring any impediments to their
success out of fear on not being viewed as knowledgeable. Both parties want a successful process only
the communication process is lacking and not cascading through the organization.
What is
the Role of HR to make this Process Work?
HR’s role is to create an environment where
all employees are treated fairly and their manager is viewed as a strong coach
and mentor. Human Resources is also a facilitator for
change and thorough a performance management training program this very
important management task can remain relevant and a key metric for managing
overall talent. HR professionals will need to devote more
time and attention in the future to providing leaders of the organization with
the training on how to deliver an honest assessment of their direct reports performance
in a timely manner.