Performance Review in the Real World

Anyone who professes how to run a traditional performance review is immediately on the defensive. Evidence around performance management’s ineffectiveness is too strong to claim anything substantial in the past has worked. Credible institutions like the ones linked below have leveraged massive resources to uncover traditional performance management’s ineffectiveness.

8 percent of HR executives thought performance management made a significant contribution to performance (Institute for Corporate Productivity).

14 percent thought that “no changes were needed” to performance systems (Corporate Executive Board).

23 percent thought that performance systems reflected employee contributions (Conference Board).

Considering the billions of dollars spent on performance management, these numbers are astonishing.

In the real world, “checking the box” on performance reviews is not a priority until the last month of the fiscal year. By then everyone is exhausted and ready for the holidays. Major errors occur in the performance reviews create very little value to the business as our data above proves.

But do not worry. This inefficiency spawns huge opportunity for anyone in a position to bring performance reviews to their teams and company.

Before diving into how to run a performance review in the real world, let’s first get the vernacular right. If you’ve noticed, this post has interchanged the words performance management and performance reviews interchangeably. They are quite different.

Defining the Performance Review Terminology

  1. Performance review: is the ongoing process of evaluating employee performance.
  2. Performance management: is the process of identifying, measuring, managing, and developing the performance of the human resources in an organization. Note: many leaders are leveraging Agile Performance Management

View the performance review as a view into the past and the performance management as the proactive, strategic, forward looking methods and processes to improve productivity and performance.

(defined by the experts)

Important curveballs to know: performance reviews are synonymous with performance appraisal, performance evaluation, employee evaluation, and sometimes even annual review. Just bucket all of those in performance review categories.

Many companies will do annual performance reviews and that will be the extent of their performance management. Don’t be like them.

This is the start of major break downs. Before we dive into breakdown and now that everyone is on the same page.

Go In With the Right Intent and Speak the Language of the Leaders

Before we talk about alignment, let’s first discuss the biggest mistake any manager or HR professional does when implementing performance reviews. The biggest mistake is they implement performance reviews for the sake of implementing performance reviews. In the real world, they should implement performance reviews so direct reports, managers, VP’s, all the way up to the CEO know where everyone stands relative to their performance. That’s it. Now leaders in the organization will be able to provide the performance management methods necessary to improve individuals, teams, managers, and divisions. If you are looking to bring performance reviews to your team or organization, speak the language of the CEO by uncovering who is performing relative to standards and potential.

Whether you are a CEO, manager, or HR professional, there are two main priorities of every leader: results and retention. Everyone in the organization needs to make sure results are being achieved and all employees are satisfied enough they stay.

There are 4 ways to make sure all results and retention happen.

  1. Build a great relationship with your directs.
  2. Communicate about performance.
  3. Ask for more.
  4. Push work down.

Source: Manager Tools.

Anyone who is focused on anything performance based, whether it be reviews or management must keep these 4 strategies top of mind when implementing anything. Here’s why, because anything else added to their plate that doesn’t align with these 4 strategies is busy work and will not be taken seriously by management.

It’s at this point in time you have the greatest opportunity to differentiate yourself from everyone else trying to find the next tool or put out the next fire. If you can help your managers execute these strategies, you will have a much easier time running performance reviews with your team or company.

Now that we’ve defined what we’re doing and have the right intent and objectives, let’s get to the good stuff.

How to Run a Performance Review in the Real World

Preparation: There are two significant, strategic decisions that need to be made before running your performance review in the real world.

Set the expectations on the frequency for the company: are you doing performance reviews quarterly, twice a year, or annually? You’ve likely read about the annual reviews falling to the wasteside within companies like Amazon, GE, and Walmart. I do not recommend just doing annual reviews. Even if you’re doing proactive performance management all year (for example: one on ones), having a-once-a-year meeting where you reflect backwards is not sufficient. Four times a year, sitting with your direct reports discussing previously set goals, adjusted goals, performance, and career coaching is the right amount. That is 4 times year. Goals, projects, outcomes, and progress is changing too fast to meet once a year and discuss goals set 12 months ago — it’s likely they’ve changed. That brings us to our next step: defining clear goals and action items.

Define the Core Competencies of the Role or Organization for the Employee: core competencies can range dramatically. Some companies will revolve the core competencies around company core values to specific skills or characteristics required. Good examples of these include:

– Functional Knowledge and Skills
– Action Oriented / Takes Initiative
– Delivers Results
– Integrity and Trust
– Attention to Communication
– Fostering Teamwork
– Decision Making / Problem solving
– Interpersonal Skills

Try and keep the competencies away from job descriptions. They should be a mixture of skills, values, and characteristics. Short and sweet.

Execution: The preparation is now set. We have a standard for behaviors and expectations around frequency looking backwards at performance.

Review Previous Quarter Goals and Objectives: this assumes quarterly goals and objectives were set. If not, then ask about their greatest accomplishments from the prior quarter or year. Reviewing these goals is the foundation of analyzing performance. There is a reason 3 months ago you sat down with every team member and wrote goals for the next 90 days. Regularly scheduled 1 on 1 meetings with each direct report will produce little to no surprises around the clarity of goals and objectives.

Analyze Performance: The next 3 steps are extremely difficult as managers. When analyzing performance of a direct report, there are so many pitfalls to performance reviews biases and mistakes. There is a strong rule of thumb here: analyze performance like you want your boss to analyze your performance. Ideally, you should have documentation in your 1 on 1 meetings around concrete behaviors regarding performance. If you do not, the biases creep into play. Be a professional. Be prepared here. Answer questions like: What is each direct doing really well? What specific behaviors caused greatness during the quarter? What specific behaviors lead to balls being dropped or objective not hit?

Keep Score: This is part of the review where the hair on the back of the neck with every direct report stands up. Let’s get an important fact out of the way. We have to keep score. That is non-negotiable. Tell me a University who doesn’t accept off of score or any professional match that doesn’t keep score. If you do not, the biggest detriment falls on the employees. They will not know where they stand. This could lead to sleeping giants in the organization not fulfilling their potential or even worse, people just cruising along at a mediocre pace throughout their career and doing enough to get by. That is not a way to live. There are many ways to keep score. The most popular is on a 1-5 performance rating scale. Align the scale with the core competencies set earlier around the company or role requirements. The employee should self-evaluate themselves without the manager knowing and the manager should do it for their directs. Doing this buckets people with an aura of transparency. That level of radical candor and transparency removes roadblocks, provides real feedback, and produces conversations that lead to growth and productivity.  

Provide Feedback and Resolve Any Conflict: One of the hardest parts of a manager is delivering feedback around performance. There are many ways to do this, but you must dig deep within your personal leadership style to deliver it appropriately. John Wooden always said: “A coach is someone who can give correction without causing resentment.”  

– Prepare in advance.
– Set a positive, helpful tone – not one of power or dominance over the employee.
– Show empathy.
– Use clear and specific examples when highlighting negative or undesirable behaviors. Provide reinforcing and correcting feedback for each negative behavior.
– Leave meeting with specific actions items to improve.

Set Quarterly Goals and Objectives: goals can be tricky if we’re not careful. Here’s why: managers make the goals are either too high level or too tactical. The SMART goal approach is a good one.  For example: if I have a personal, quarterly goal of losing 10 pounds, that turns out to be 3.3 lbs a month. Great! That’s a good goal. Now there are action items that need to be accomplished each week with those goals. For example: I need to go to the gym 3 times a week. I need to eat salad for lunch 2 twice a week. I need to make sure I reduce my carb intake. There are thousands of actions items I could take to hit that goal. Where leaders falter are when the goals are too tactical (drink a smoothie 2 twice a week) or too grandiose and fluffy (look like a Brad Pitt). The tactical action items should be set as deliverables within your 1 on 1  

Schedule 1 on 1 Meetings Until Next Quarterly Review: Scheduling 1 on 1’s are the best indicator they will happen. If you make sure you weekly or bi-weekly 1 on 1 meetings occur the following occurs:

– performance reviews become much less time consuming
– there are very little surprises about feedback, performance, and compensation.
– you have data (documented) on the “why.”
-our direct reports will know where they stand.

Running a performance review should be an energizing and inspiring meeting between you and your direct reports. If you follow the guidelines above it will be a very rewarding get together for you and your teams.