Each
year millions of companies across the county go through the process of
reviewing employee performance, ranking their employees against their peers then
communicating their strengths, weaknesses in face-to-face discussions as a way
to motivate staff and presumably to improve productivity. The question is should this process continue
or is it such a failure that this key management tool should be discarded and a
new way of evaluating performance be developed?
Using
our employee engagement survey tool as the backdrop to this question the data
suggests that the process is not broken but the way the process is administered
and communicated needs to be fine-tuned to better reflect the current workforce.
What is a Performance Review?
First
of all, let us define what a performance review is and why it is such an important
tool in managements toolbox. The performance review is a mechanism to
document an employee skill level based upon a clear understanding of the duties
and responsibilities of the job and the results expected. The performance review is a unique way for
management to motivate and maximize performance and productivity, as well as outline
career goals and expectations. It also facilitates
a ranking mechanism for management and is an excellent way to provide
succession planning services.
What is the Manager’s Role in the Process?
The
manager’s role in the process is to properly set the stage to ensure the
success of the discussion as well as encourage employee motivation and
engagement for the future. The manager
must discuss the job, standards and expectation and summarize their subordinate’s
strengths and weaknesses by providing specific examples of successes and
challenges in their performance.
Highlighting these areas in generalities will not support the specific
areas for improvement that the employee faces nor will it support the overall
rating. In our survey data our
respondents indicate that they want a timely review, that is layered with
specifics and offers them a path to improve.
The respondents also indicate that they want to seek agreement with
their manager on the performance improvements desired and work in an
environment where the company will support their professional development. Where managers fail is that they are not
prepared for the discussion, do not provide specifics and are unwilling to hold
their direct reports accountable.
Successful managers also need to let their employees know that they have
a responsibility in the performance process as well.
What is the Employee’s Role in the Process?
The employees need to come
prepared with a self-review so that they can provide honest feedback about
their performance. They should also be
prepared to express their short term and long term goals and what they expect
from their manager over the next performance review cycle. If there are any ambiguities with respect to
the job, standards or expectations they should be addressed during the
performance review discussion. Finally,
if improvement is necessary both the manager and the employee should come to a
mutual agreement on what is expected in the future.
Where Does the Process Fail?
The process will often fall
short when several key principles are not adhered to by the manager and they
include the manger not being honest about their employee’s strengths and
weaknesses. It is often easier to just
gloss over the employee’s substandard performance than it is to address the
challenges and work with the employee to make them successful. The survey data suggests that it is easier for
managers not to hold people accountable.
Also, managers will often not tie pay and performance but rather take
the approach that all employees should receive the essentially the same merit increase
regardless of performance. Once again
this may be the easiest path; however, it does not recognize contribution and
excellence on the job. The merit
increase program administered through an effective compensation strategy can
motivate those employees that are high potentials and successful.
Key to a successful
performance review process are managers being honest and prepared and
recognizing the differences in the performance of their subordinates. Employees need to have an attitude that is
open to improvement and learning in order to further develop their skill-set.
