Performance Reviews Need Help
In a recent survey conducted by Adobe, 88% of the survey participants indicated they were part of a performance appraisal process. This same study found that managers in these programs spent, on average, 17 hours per employee preparing for their performance reviews. Yet, these findings were overshadowed by the discovery that 59% indicated that performance reviews “do not have an impact on how they do their jobs;” instead, they called them a “needless HR requirement.”[i]
The Society for Human Resources Management (SHRM) has reported that 95% of employees are dissatisfied with their company’s performance appraisal process, and, according to SHRM, 90% of these employees do not believe their performance review process yields accurate information.[ii] Statistics like these might account for some of the reasons why companies like Adobe, GE, and The Gap have substantially revised or even eliminated their traditional performance appraisal systems altogether.[iii]
Scary statistics, however, do not justify eliminating performance appraisal programs. Employees want to know if they are succeeding; they want meaningful feedback. Bill George, a professor of leadership at the Harvard Business School, has suggested that, “[S]elf-awareness is the starting point of leadership.”[iv] Indeed, other researchers have commented that self-awareness may be more important to a leader’s success than formal business training.[v] It’s axiomatic that if one is self-aware, he or she can learn and improve. If one is closed-minded, however, development and growth will be blocked.
In a similar vein, our experience and research at DecisionWise confirm the following principles: (1) employees want meaningful feedback (with more being better than less); and (2) understanding others’ perceptions about one’s performance is critical to that person’s leadership potential, personal development, and good management practice.
How to Fix Your Process Quickly
For these reasons, we have two performance appraisal tools that are designed to augment and support an organization’s existing performance review process. We think of these tools as bolt-on solutions that do not disrupt current processes while providing more actionable data. Our first solution uses a multi-rater (a 360-degree) survey that measures performance competencies for employees at all levels within an organization. It is also designed to give insight into performance and potential because it contains survey items that also measure an employee’s likelihood for future success (i.e., their potential). Thus, the instrument offers two assessment in one.
Our second solution is focused on evaluative information for teams. Our survey system gathers performance data upon completion of individual, discreet projects. For example, an accounting firm might use this tool to evaluate how well each of its audit engagements went during the last 6 months.
With the rise of ad hoc and self-directed teams, employees are now working closely with others who may not be linked together in the organization’s hierarchy or performance review process. Our tool gathers feedback from team members, and feedback can be gathered immediately after a project closes so that memories and suggestions for improvement do not fade with time.
Again, these tools are not designed to replace an organization’s current performance appraisal process or its talent review methods. Instead, our firm is looking to help practitioners with easy-to-use solutions that gather cleaner and more meaningful data to help them in their talent management efforts.
Why Our Solutions Work
A standard performance appraisal process is designed to help an individual employee and their manager understand two important things: (1) how well is an employee aligned to the organization’s objectives, culture, and strategy (alignment); and (2) to what extent are an individual’s personal efforts contributing towards team and organization success (accomplishment).
In addition to understanding these two questions of alignment and accomplishment, our instrument, as noted, is designed to evaluate potential. Some research has suggested that understanding your employees’ potential may be more important than simply identifying a current slate of strong performers.[vi] For this reason, we show both datapoints at the same time.
Typical performance review programs are built around processes that range from evaluations based on business metrics (e.g., hitting sales goals) to narrative essays that offer in-depth detail about a person’s strengths and weaknesses. Here is a sampling of some of the more common performance management methods:
- Manager’s report and assessment;
- Ranking systems (everyone is given a ranking);
- Behaviorally anchored rating scales;
- Critical incident methods (something happens, and everyone takes time to document how performance could have been improved);
- Continuous feedback and coaching systems;
- Job responsibilities review; or
In addition to some of these more common methods, there are many more performance appraisal programs used around the world, as organizations customize and develop programs to meet their specific needs.
Of the myriad of options available, employees appear to prefer multi-rater feedback.[vii] A standard multi-rater feedback program solicits feedback and evaluative information from a variety of sources that surround the focal person (i.e., the participant). Feedback is solicited from one’s supervisor, from one’s peers and direct reports, and from other applicable categories. You may be most familiar with multi-rater programs in the context of 360-degree feedback surveys.
Some practitioners avoid a multi-rater performance process, believing it is more difficult to administer and track because it relies on input from a lot of people. This fear was probably justified in the past, but we designed our surveys and technology to address many of these historical problems. In addition, a multi-rater performance process is a net positive because it solves many of the problems associated with other appraisal programs.
For example, because multiple raters are surveyed, the process is sounder from a legal perspective, as it relies on variety of observations instead of just one or two. Employees also appreciate the fact that feedback is not contingent on just one or two people. Evaluations are received from a variety of sources including peers and others that might even have a rooting interest in favor of the employee. Moreover, a multi-rater system, by its nature, means evaluation criteria remain consistent from one rater set to another. In addition, the instrument focuses on well-defined competencies instead of relying on personal evaluations that may be subject to biases. External rater groups may even be invited to join the process, which extends the reach of the program to potential customers, vendors, etc.
On the backend, users are provided a robust analytics tool, which means HR leaders and analysts will be able to cut and slice their data and discover hidden pockets where things are going well or poorly. Our survey instruments are designed to not only assess performance but also potential, and our analytics tool can be used to develop nine-boxes. Nine-boxes are useful data visualizations that helps talent management professionals and others involved in succession planning quickly identify and track their high-performing employees.
Our team-focused solution addresses a different concern. Self-directed teams are emerging as useful tool for organizations to solve tricky problems that require innovation and cross-functional expertise.[viii] In addition, other industries rely heavily on ad hoc teams (teams created for a specific project and then they disband), such as heavy construction, accounting, marketing, etc. Many companies would like to evaluate these teams in order to conduct people analytics (e.g., What makes a good team? What characteristics help or hinder the process, etc.?).
While it is common for teams to conduct a debrief session after a project has been completed, these sessions often lack any hard data from which to conduct the debrief. Moreover, in-person debriefs do not yield data that can be aggregated to show larger trends or to make predictive analyses. Our team solution launches a quick evaluative survey (ideally taken on mobile devices) soon after a project closes. This tool is supported by administrative features to help automate and organize the process, and its analytics tool, as suggested, helps the user explore and analyze data for immediate insights along with laying the groundwork for potential predictive analyses.
For practitioners conducting talent reviews, these two solutions are an easy way to gather more actionable data from which to make decisions, to tailor learning programs, or develop succession plans. These tools also help organize and automate the process without disrupting current programs and systems.
Employees want to improve, and they want feedback to help them. The key to unlocking your employees’ potential is meaningful data that points the way for managers and employees to improve on strengths and narrow performance gaps. While some experts cheerfully proclaim the performance review is dead, the reality is that in a modern, data-driven workplace, and when dealing with data-savvy employees, the performance review isn’t ready to die. It’s too valuable a data source and management tool. However, it needs to be re-imagined and enhanced with technology, systems, and data collection that make the appraisal process better for both the individual and the organization.
[i] Adobe, Performance Reviews Get a Failing Grade, January 11, 2017 (retrievable from LinkedIn’s SlideShare.net).
[ii] Thomas Koulopoulos, Performance Reviews are Dead. Here’s What You Should Do Instead, Inc.com, February 25, 2018.
[iv] Hougaard, Carter, Afton, Self-Awareness Can Help Leaders More Than an MBA Can, Harvard Business Review, January 12, 2018.
[vi] CEB, The HR Guide to Identifying High-Potentials, CEB/SHL Talent Measurement White Paper, 2014.
[vii] R. Wayne Dean Mondy, Chapter 8, Performance Management and Appraisal, Human Resource Management, 12th Edition, P. 244, Pearson, 2012.
[viii] Chuck Blakeman, Why Self-Managed Teams Are the Future of Business, Inc.com, November 25, 2014.