“True motivation comes from achievement, personal development, job satisfaction, and recognition.”
~ Fredrick Herzberg
Employee performance reviews are a critical component of effective human resource management. They provide an opportunity to assess employee contributions, set goals, and align individual performance with organizational objectives.
However, many organizations encounter common mistakes that undermine the effectiveness of these reviews. Here, we explore four key pitfalls and how to avoid them, ensuring your performance reviews are both meaningful and productive.
“Performance management, when handled skillfully in an organization today, can increase job satisfaction, employee retention, loyalty, and overall performance of the organization”
~ Soumyasanto Sen, Co-Founder & Partner at People Conscience
What’s the cost of ineffective employee performance reviews?
When done well, performance reviews can help avoid several significant risks:
High Turnover Rates
Ineffective performance reviews can lead to employee dissatisfaction and increased turnover. By providing clear, constructive feedback and setting achievable goals, organizations can improve retention and reduce the costs associated with hiring and training new employees.
Legal Issues
Poorly conducted performance reviews can expose a company to legal risks, particularly if they are inconsistent or biased. Ensuring that reviews are fair and based on clear criteria can help mitigate these risks and protect the organization from potential lawsuits.
Skill Misalignment
Without regular and effective performance reviews, organizations may fail to identify and address skill gaps within their workforce. This can lead to decreased productivity and competitiveness. By linking reviews with professional development plans, companies can better align employee skills with business needs.
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Lack of Regular Feedback
Performance reviews should not be the only time employees receive feedback. A common mistake is waiting until the annual review to discuss performance issues or achievements. This delay can result in missed opportunities for improvement and development.
Ongoing feedback and communication, ideally weekly or even daily, between a manager and each employee is a key to retention, engagement and productivity.
“80% of employees who say they have received meaningful feedback in the past week are fully engaged — regardless of how many days they worked in the office.
In fact, the boost from meaningful feedback gives four times the lift in engagement than having the ‘right number’ of days in the office. The problem is, Gallup found in a recent study that among nearly 15,000 employees, only 16% said the last conversation with their manager was extremely meaningful.” Gallup
Nowadays, the emphasis should be on ongoing feedback, rather than the once-a-year performance review.
Consider implementing periodic “performance conversations” to bridge the long gap between annual reviews. We recommend quarterly formal check-ins and weekly touchpoints.
Implementing Effective HR Feedback Strategies involves providing continuous feedback throughout the year. This can be achieved through regular one-on-one meetings, informal check-ins, and real-time feedback mechanisms.
By fostering a culture of open communication, employees are more likely to feel supported and motivated to improve.
Unclear Expectations and Criteria
One of the most significant dangers in employee performance reviews is the lack of clear expectations and criteria. When employees are unsure about what is expected of them, it becomes challenging to measure their performance accurately.
According to a Gallup study, only about half of employees strongly agree that they know what is expected of them at work. This ambiguity can lead to frustration and disengagement.
Only 47% of employees strongly agree they know what is expected of them at work. That’s down from 56% immediately preceding the pandemic and 61% in 2015.
2% of CHROs Think Their Performance Management System Works
To avoid this pitfall, establish clear, measurable objectives at the beginning of the review period. Use specific criteria that align with the company’s goals and ensure that these are communicated effectively to all employees. This approach not only enhances the transparency of the review process but also empowers employees to take ownership of their performance.
Neglecting Employee Input
Another risk is neglecting to incorporate employee input into the performance review process. Including employee input can be challenging, but when done well it can be an excellent resource.
Have employees share their achievements and challenges, prior to writing the review, and then make sure all conversations about performance are two-way dialogs, including the delivery of the evaluation.
The conversation should be driven by the manager and focused on the message, with allowance for comment/input from the employee.
The performance review meeting (or any meeting with constructive feedback/discipline) should not be a 2-hour argument about whether they really need to improve.
Reviews that are solely managerial assessments can feel one-sided and fail to capture the full picture of an employee’s performance.
Involving employees in performance reviews can enhance satisfaction and engagement. This is because participation in the process allows employees to have a voice in their evaluations, creating a more balanced and comprehensive assessment.
By valuing employee input, you create a more balanced and comprehensive review process.
Failure to Link Reviews with Development
Performance reviews should not only assess past performance but also serve as a foundation for future growth.
A common mistake is failing to connect reviews with career and professional development plans.
When reviews are not linked to development opportunities, employees may feel that the process is merely a formality rather than a tool for career progression.
To address this, ensure that each review results in a clear development plan that outlines specific goals and training opportunities.
This plan should be tailored to the individual’s performance improvement needs, in a supportive way, and/or their career aspirations, and aligned with organizational needs. By doing so, you demonstrate a commitment to employee growth and retention.
Consider implementing a Total Rewards Program.
An effective Total Rewards program will incorporate ongoing feedback and recognition systems, which help maintain regular communication between employees and managers.
Conclusion
Avoiding these common pitfalls in employee performance reviews can significantly enhance their effectiveness and impact.
By setting clear expectations, providing regular feedback, incorporating employee input, and linking reviews with development, you create a more engaging and productive review process.
These strategies not only improve individual performance but also contribute to the overall success of the organization.
Implementing these changes can transform your performance reviews from a dreaded obligation into a valuable tool for growth and development.
Custom HR solutions to transform your business through your people. Schedule your free consultation now.
“I guess we all like to be recognized not for one piece of fireworks, but for the ledger of our daily work.”
~ Neil Armstrong
Prove It!
“80% of employees who say they have received meaningful feedback in the past week are fully engaged — regardless of how many days they worked in the office.
Only 47% of employees strongly agree they know what is expected of them at work. That’s down from 56% immediately preceding the pandemic and 61% in 2015.
The boost from meaningful feedback gives 4 times the lift in engagement than having the “right number” of days in the office. Gallup found in a recent study that among nearly 15,000 employees, only 16% said the last conversation with their manager was extremely meaningful.
HR Should Be Front & Center
