Are Performance Reviews Really Helping Your Organization?

 Each year thousands of companies across the country have their managers fill out review sheets about their employees. Those employees have a meeting with their manager, discuss what they’ve done well and what they need to work on, and then they go back to work.

The thought process behind these performance reviews is that they are an effective way for managers and their employees to discuss openly about how they’re doing and what they can do to improve. A recent article by The New Yorker found that these reviews are falling out of favor with some companies.

But, do they really work?

In a recent study by BambooHR they found that only 16 percent of employees prefer to receive feedback in a formal performance review process. And, surprisingly, only four percent of employees feel that performance reviews are the best way to motivate and engage employees.


The problem with the system is that it’s antiquated and broken. Too often employees don’t feel like they’re heard during the review. Employees feel that the review usually turns into an unloading of what they’re doing wrong instead of what they’re doing right. Managers can flip the script on the review process and position it as a roadmap for what they need to do to progress in the company. Imagine these three scenarios:

 

Scenario 1: Jake, employee, goes into his performance review meeting with Tim, his manager. Tim praises Jake for his dependability and work ethic. Tim talks about Jake’s recent project, auditing a client’s financial accounts looking for irregularities, and discusses with him the good and the bad of project. Tim, again, thanks Jake for all of his hard work and to keep up the good job.

 

Scenario 2: Jake meets with Tim to go over his performance review. Tim, again, praises Jake for his dependability and work ethic. Tim asks Jake, “Where do you want to be next year in the company? Do you want to be in your same position or somewhere else?” Jake answers, “I like my position, but I’d like more responsibility and move up in the company.” Tim then responds, “Great! Let’s talk about what you can work on to give yourself that opportunity.”

 

Scenario 3: Jake and Tim meet to go over his performance review. Tim asks “Where do you want to be next year in the company?” Jake answers, “I’d really like to move up in the company and get more responsibility.” While Jake has desire to move up in the company, his work record hasn’t been very stellar recently. So, Tim responds, “That’s great! I think that if we work on ‘X, Y, and Z’ you would make a great candidate for a promotion. You already do ‘This and This’ good. Let’s work on ‘X, Y, and Z’ and get you to where you want.”

 

Which one sounds the worst? Obviously, it’s scenario 1. In scenario 1 Tim is very complimentary of Jake, but there is no discussion of Jake’s goals. In scenarios 2 and 3 Tim looks to find out what Jake’s goals are in the company to tailor the review to best suit Jake.

 

The performance review process has gotten easier over the year with the implementation of performance management software. These software programs all managers and employees to fill out forms and it populates them into a report that both parties can have.

 

Many companies are leaving performance reviews all together. Three out of four HR professionals are critical of them. So how can we improve performance reviews?

 

Top 5 ways employees want to inspired and motivated:

 

  • Open, informal conversations

  • Personalized recognition

  • Raises & promotions

  • Ideas heard and implemented

  • One-on-ones geared toward career path

 

Whether you decide to ditch the performance reviews or stick with them, you’ll find that the performance IMPROVES when you focus on cultivation company culture and inspiring employee growth. Stop focusing monitoring performance and start focusing on improving performance!

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