Are you under the impression that everything is going well with your existing performance management efforts? If so, you may need to think again. Up to half of all managers (58% to be specific) dislike the employee performance review system used at their organization. They state they would rate it at a C or below. This data points to a significant issue regarding how most companies are managing performance today.
The issue is that rather than focusing on the development and improvement of employees and their overall performance, the old and somewhat outdated methods of performance management are being used. These outdated methods are emphasizing ineffective sources of motivation, such as incentives based on salary and other unsuccessful practices.
For companies facing these issues, there is a solution. It is to develop an ongoing performance management system that is focused mainly on the development and improvement of employees. Here are some tips to ensure you achieve this.
Eliminate Traditional or Ineffective Performance Review Methods
There are several issues related to yearly employee performance review models that are used by many companies today. For example, only assessing employee performance one time per year is ineffective. This won’t give your employees the opportunity to make improvements. There’s very little actionable feedback provided, and it isn’t provided in real-time. Underperformance or bad behaviors have already gone on much too long at this point.
Another disadvantage of this method is that traditional reviews are typically measured against the Normal Distribution. The problem with this is that most employees (those who are only getting by) aren’t encouraged or inclined to change if their performance is being judged against the curve. After all, they are “average.” Even worse, two of the three performance appraisals that are done this way will result in no change. Either that or a reduction in overall performance.
Find and Praise Exceptional Talent
As stated above, appraising your employees (i.e. talent) according to the Bell Curve is somewhat problematic. While this is true, when it comes to finding the top performers, this can be helpful. In most situations, up to 10% of employees will make up the lowest and another 10% will make up the highest. It is a good idea to pay attention to those outlying employees. These are the ones who aren’t somewhat buried in the middle of the Bell Curve. They are creating their own paths to success as a standout, dedicated contributor.
After you have identified these individuals, you must do everything you can to retain their services. This means ensuring appropriate resource allocation to offer ongoing opportunities for your top performers to continue to develop and grow. It’s also necessary to keep your communication open using a continuous feedback loop.
According to research and experts in the industry, an efficient way to improve employee performance and to make it easier to manage is by linking a person’s contributions to the highest priorities in the company. The OKRs – objectives and key results – promote ongoing alignment by making sure the CEO-level goals are achieved. This is because all your employee’s efforts are working to support those goals.
By using OKRs, employees can see for themselves how their efforts will impact overall goal execution. This helps boost employee performance in an organic manner and with a measured method of tracking goal progress.
Create and Use a Continuous Feedback Loop
When you exchange feedback performance regularly, you must continue communicating with your employees on a weekly basis (at a minimum). A portion of this exchange can be a check-in each week. Using weekly progress reports for employees also offers a great way to ensure that the lines of communication remain open.
By using an employee progress report, you have an opportunity to ask questions about potential roadblocks employees are facing. You can also discuss weekly wins, and any pressing concerns that your workers may have. This lets you get a snapshot of performance each week and you can provide comments to the reports and provide actionable feedback, all in real-time.
Transform Your Managers into Coaches
Every manager in your organization needs to focus on improving the strengths of their employees using coaching. While this is true, and a widely accepted fact, it’s estimated that approximately 50% of managers will spend under 10% of their total time coaching their team. This makes it no surprise, then, that only about 28% of employees actually feel like their managers are holding effective or meaningful discussions regarding their performance.
To be an effective coach, a manager needs to ensure that the employee performance feedback they give employees is focused on the future. Attempting to punish past underperformance or mistakes will not help ensure development in the future. An effective coach is going to provide specific and frequent feedback about how and what an employee can do to continue improving their efforts right now. To make sure that your managers are coaching their teams, encourage them to ask the questions. This can be things like “What is it that you need from me?” and “What are you planning to accomplish this week?”
Create an Effective Way to Measure Employee Success
After you have replaced your annual review with the continuous approach for performance management, you still have to consider a few things, such as are your performance management efforts really happening and are they effective?
If you implemented the use of week by week progress reports, it should be easy for you to figure out if performance management is occurring regularly. If there are reports that are being completed and there’s a continuous exchange regarding performance among your managers and the reports they provide, you can have confidence that it is happening.
The question you must answer though is – is it really working? In order to answer this question, you must have a specific set of standards in place to measure your performance against. Remember, your goal isn’t to gauge all your employees against a specific criterion (the above-mentioned Bell Curve). Instead, you must specify what’s expected from each of your employees in their specific roles. By doing this, you can then assess performance against these pre-established expectations.
It is also a smart move to engage in more frequent appraisals to formally talk about how your workers are performing according to set expectations. Take some time to develop individualized, strategic plans to improve employee performance.
Implement a Web-Based System
A web-based system, like the solutions used by Salesforce Chicago, will allow you to collect data and facilitate your cascading goals. It also offers a common framework for employees and leaders so they can take part in various parts of performance management. This helps increase application consistency.
Web-based, well-developed employee performance management tools will help facilitate the ongoing application of processes across your entire organization. The objective nature offered by this helps enhance the perception that it will be both accurate and fair. However, using web-based systems won’t do much along to enhance employee performance.
To ensure your performance management system is successful, leadership competence is necessary across all four of the related elements – coaching, goal setting, job performance evaluation, and development planning. If you don’t have these essential skills in place, no rating scale, technology, or form will help the system work effectively.
Training helps increase consistency. This is a key driver of things like overall value to the business, accuracy, and fairness. Training in development planning and coaching also helps increase the likelihood that managers will give feedback regarding performance while working with direct reports to implement development plans. In turn, this will have a positive impact on a direct report’s perception that the system in place will help build their competence and skills.
Consider Using Multi-Rater Feedback
Also called 360-degree feedback is a process that accumulates feedback from several sources, including senior leadership, managers, and co-workers. Because feedback is taken anonymously and gathered from several people, it makes the overall assessment process seem much more accurate and fairer to most employees. While multi-rater feedback offers several benefits, trying to incorporate it into a performance evaluation strategy is sometimes counterproductive.
Many people won’t be forthcoming or candid when they believe the comments. They may impact compensation decisions and employee performance ratings for their co-workers. As a result, you should not gather multi-rater feedback directly before performance reviews are given. Also, it is essential that employees and managers have a shared understanding of the purpose behind multi-rater feedback. They should understand this along with how the data will be used.
Using self-assessments for employee performance reviews is also a beneficial practice. That’s because when employees have input into their evaluation, they are more likely to see the process as accurate and fair.
However, just attempting to introduce self-assessment alone won’t have the desired effect. What can make the difference is how the self-assessment data is used during the performance review process. To do this properly, the management team needs certain skills and using the information provided goes beyond a simple form.
Keep in mind though, self-assessments are not likely to have a huge impact on the bigger performance management system. If they are perceived as yet another “task,” and the leaders don’t have the skills to implement the self-assessment information into the discussion, then they are essentially ineffective and a waste of time.
Creating a More Effective Process
While performance management is a necessary part of any organization or company, there is almost always room for improvement. You can evaluate the methods used. Keep the information here in mind to see how changes and improvements may be made now, or in the future. Making these changes will improve processes and ensure the performance of employees is properly evaluated and reviewed in a fair and accurate manner. Having the right processes in place help make a more productive company.