Maximizing Outcomes of Performance Reviews

In an organizational setting, evaluating job performance is a key factor in rewarding and recognizing performance of an employee.  If conducted properly, the performance review can serve to set goals, acknowledge personal strengths and provide career guidance and development opportunities. If the review is mishandled and treated as an administrative burden, the result can be devastating individually, departmentally and to the overall organization.

Here are 5 steps to maximize the results of the performance review process:

Getting started:

1.      Understand performance measurement.
The performance review format should be aligned with the organization’s brand and service strategies along with financial and operational objectives.  Performance standards must be created from the beginning of the fiscal year so that the review process, which should occur throughout the year, is a success.  Having employees participate in setting the performance standards is crucial to the acceptance of the standards as a viable measure to one’s performance.

The most common litmus test to apply to the review format is the SMART method. 
Each performance standard on the appraisal form should be:
Specific:  Leave no room for misinterpretation of the question or the answer.  Make sure that all performance related information is clear and concise.
Measurable:  Make sure that the achievements can be quantified.  Having measurable data allows for the organization to compare and analyze performance within and across business units.
Achievable:  Make sure that performance and goals can be accomplished under reasonable conditions and the employee has full accountability to achieve the results within the agreed upon timeframe.  Nothing is worse than being evaluated on an objective that was unattainable.
Realistic:  Only evaluate performance on areas that are important to the overall organization’s strategy and mission.
Timely:  The performance should be reviewed for a specific period of time. Many organizations are reviewing members more frequently than annually.  Conduct performance reviews for everyone at the same time, so that leaders are evaluating and ranking the department members performance in aggregate.

There is a growing trend in the way that organizations assess performance.  Many organizations utilize 360 degree feedback and subordinates and other department heads are asked to provide input in the performance review process. 
 Maylett and Riboldi (T+D 2007) note,
“Where past measurement typically focused on what was accomplished, an increasing number of organizations today incorporate elements of how things are accomplished into their individual and company performance assessments.
Feedback tools, such as 360-degree feedback and employee engagement assessments, have gained popularity in evaluating individual behaviors and overall levels of engagement-the ‘soft’ side of performance that is not typically included in a company’s profit and loss statement."
Knowing what and how to measure performance is the first step in maximizing the outcome of performance appraisals.

2.  Train the leadership.
Anything that is critical to the success of the organization must be reinforced by training the leadership and providing a nexus to the overall success of the organization.  After training the leadership about the value of the performance review process, the leadership should be trained in the technique of delivering the review.  The delivery of the review is as important to the process as the actual results.  A well documented/written review, delivered improperly may not feel like a superior review to the recipient.  Likewise, a “below standard” written review delivered improperly may be delivered in a manner that could be completely misconstrued by the recipient. Make sure management is consistently trained to deliver a review in a GREAT format.
Generate a feeling of comfort for the employee. Make sure that the environment is free and open for communication.
Recognize individual and team accomplishments.  Make sure that credit is given to significant achievements.
Establish goals and needs for the future.  Together create a PMP-personal motivation plan.   Develop an educational and professional growth plan.
Assess performance realistically and honestly.   Honest feedback is the foundation for personal growth.
Thank the employee for their contribution to the team/organization. Always end on a positive note.

3.  Indoctrinate new employees in the performance review process.     Within the first week of an employee joining the organization, management should sit down and go over the performance review process. The new employee should understand how and why performance is measured in the organization. Many organizations conduct 90 day “probation”/ “orientation” review. It is often the case where a new employee is evaluated after 90 days and is unaware of the standards and criteria for which he/she is being evaluated. Reviewing the performance review form within a new member’s first week on the job displays the importance of the organization’s view about rewarding, recognizing and correcting performance.

DO NOT surprise a new employee at the 90 day review by showing her/him the performance rating format for the first time.

4.  Conduct Effective Performance Reviews.

·        Have the employee conduct a self-evaluation- This gives the employee an opportunity to elaborate on performance items.

·        Do your homework.  Review the last performance review.  Review the results of the performance review at least twice or four times a year. This will ensure that the employee is coached and counseled on areas to improve throughout the year, giving him/her an opportunity to achieve a good performance by the end of the fiscal year.

·        Make sure that there is ample time to have a meaningful conversation and elaborate on all the points made in the written review during the face to face meeting.

·        No interruptions-dedicate the time to the process.

·        Stick to the review form and do not get sidetracked by personal issues of the employee.

·        Always give the review on time.  Delaying the performance review makes the review less effective in accomplishing a positive outcome.

·        Allow employee to write comments on the review.   If a review is conducted properly, the comments should generally be positive.

·        Always end on a positive note.  This is not the time to dole out discipline or to give final warnings.

·        Give a copy of the review to the employee so that the appraiser and employee can review the form together.

·        Keep the money talk for another day. Discussing pay weakens the focus of the performance review.

5. Audit the results of the performance reviews.
At the end of the performance review process, an audit should be conducted to see if individuals were fairly rated according to the established guidelines.  This step is necessary to ensure fairness and equity to the process.    This step also reinforces the organizations commitment.  Any inconsistencies should be discussed with top leadership. 

The leadership in an organization can begin by understanding that the performance review process is the foundation for recognizing, rewarding and correcting performance. Ensuring alignment with the overall strategic business plan of the organization and creating measurable performance standards is crucial to the purpose of the performance evaluation. Training the leaders on delivering performance reviews provides a way to maintain a level of communication to the employees on the values and goals of the organization.  Delivering the performance review consistently to all employees reinforces feedback and career guidance to employees. Auditing the results of the review enables the organization to view the effectiveness of the leaders’ commitment to the process.  Maximizing the outcome of the performance review process should be the aim of every organization that seeks results oriented members.