For decades, it’s been an annual ritual for most white-collar employees that occurs around this time of year: Take stock of the past year’s job performance and prepare to discuss that and goal achievement with their boss and hope all the subjectivity adds up to a raise or a bonus.
But the old paradigm of how to reinforce and achieve desired behaviors is shifting from a once-a-year, face-to-face encounter to supervisors giving their employees quarterly, or even instant, informal feedback to guide them throughout the work year and avoid surprises along the way.
“The traditional performance review has been practiced in many, if not most, organizations as a once-a-year, by-the-seat-of-the-pants, informal discussion about very subjective topics that may, or may not, relate directly to an employee’s actual performance,” said Bettina Deynes, interim chief human resources officer for the Society for Human Resource Management in Alexandria, Va.
“It has been every bit as frustrating for the employee as for the employer and generally has not been productive in changing performance or behaviors,” she said.
What has changed and what is working is the increased frequency of the evaluation interview.
Some organizations that are making this change are adopting quarterly reviews, and some others, such as General Electric Co., are developing apps for smartphones that encourage supervisors and their employees to communicate regularly, even daily, on the subject.
“Another change, and a welcome one for many, is the direct tie-in between the performance management system and the strategic plan and job descriptions in a few innovative enterprises,” Deynes said. “This adds a quantitative element to performance reviews that can be more easily related to goal and objective accomplishment, as well as overall performance success.”
Companies that still cling to outdated performance metrics that focus on traits and characteristics as opposed to competencies and performance are increasingly in the minority, said Meloney Sallie-Dosunmu, founder and president of Precision Talent International in Allentown.
“Organizations that have transactional HR departments are not getting the best performance out of their employees,” she said. “They’re just checking boxes.”
All of her 15 clients are using a performance appraisal process, but they’re using robust talent management technology for succession planning and measuring performance more than once a year to help ensure employees are aligned with and understand the organization’s goals and vision.
“What I’m seeing is more of an evolution of the performance appraisal process, where HR is functioning as a business partner,” Sallie-Dosunmu said.
A certain amount of anxiety over being held accountable will always surface with employee-boss encounters over performance, but establishing so-called smart goals allows both sides to track and quantify the quality of work over the course of the year to help defuse the tension.
Some organizations use the acronym SMART to definite their goals as specific, measurable, achievable, realistic and timely (with a deadline).
“Organizations are trending toward smart goals because they’re specific and measurable, not someone else’s judgment,” Sallie-Dosunmu said, and allow employees to control their success during a year.
“Managers should be there to help someone through a career development process.”
NO MAGIC BULLET
To be sure, all employers are concerned with performance management and employee productivity, said Bob Orzechowski, a board member of the Berks County chapter of the Society for Human Resource Management.
“Employers are faced with many variables and must try to strike a balance among them daily,” he said. “The human asset component is usually one of the largest expenses for any firm, so managing employee performance is always on the employer’s mind.”
Given the vast array of firms (size, culture, workforce composition and technology), industries and other organizations today, there is simply no one formula for success, Orzechowski said.
“It is generally accepted that employees want to know how they are doing; they want meaningful work and recognition for good performance,” he noted. “Thus, the real question for HR is how to align employee expectations with the employer’s need to remain competitive and productive.”
There are tools and solutions that can be brought to bear for most workplace performance situations and conditions, and few people are experts in all of them, said Orzechowski, chief operating officer of the Lancaster Cancer Center.
“The key is to know which tools and solutions to use in which situations,” he said.
Lancaster Cancer Center, for example, employs highly skilled Registered Nurses and uses a competency-based job description and appraisal process for them and other clinical staff and office staff, and each has a performance appraisal document fit to their jobs, which focus on essential functions.
“The review is held annually, but interaction is regular and constant, as we are all in one facility,” Orzechowski said. “Any needed intervention and accommodations are addressed as they manifest. We do not see the anxiety or deleterious impact on the employee-manager relationship.
“Even when a marginal employee must be coached, counseled or disciplined, it is not a surprise and it all usually works out well,” he said. “A key is to hire well so we can manage more easily.”
Performance reviews in the nonprofit world also are commonplace but changing to accommodate more frequent conversations.
For the full-time staff members at Moravian College in Bethlehem, the annual performance assessment still applies.
“I think we owe it to our employees to sit down with them at least once per year and discuss how they are doing,” said Jon Conrad, vice president for human resources. “Ideally, it is a synopsis of discussions throughout the year about how their work relates to the strategic plan of the college.”
Moravian employees monitor their goals quarterly to make sure goals are on target and to avoid surprises during review time.
While acknowledging that no one looks forward to annual reviews, Conrad said they are “very necessary.”
From a legal standpoint, employers should be mindful of not giving false performance reviews, which can be tempting when work relationships evolve into friendships over time.
“When employees bring claims of discrimination or retaliation based on employment decisions, the employer must provide legitimate business reasons for the decisions being challenged,” said Keely Jac Collins, a Bethlehem labor and employment attorney.
“Even where the employee has a history of discipline, positive evaluations may undermine an employer’s ability to credibly assert that poor performance was the reason for the decision.”
Employers may want to consider assuming the role of mentor with their employees to keep the work relationship positive and productive without losing objectivity, she said, adding that employees are looking for opportunity and engagement as primary motivators “as opposed to just a paycheck.”
LINKED TO LOYALTY, MORALE
Although employee engagement is the buzzword in HR these days, companies are still concerned about employee loyalty and morale.
“All three are important to a growing and successful enterprise,” Deynes said. “Many companies are still trying to figure out how to make that trifecta work effectively for them.
“What they do not yet realize is that effective performance management systems will take them a long way in that direction.”
BUILD YOUR OWN
A successful formula combines much more frequent reviews; review conferences that are short and to the point; quantitatively measurable criteria for performance measurement; measurement criteria that are directly tied into the organizational strategic plan and individual job descriptions; and use of cutting-edge technology to assist in implementing reviews and review schedules.
“In addition, thought leaders in more progressive companies are encouraging supervisors and employees to develop their own standards of performance together as a part of the ongoing performance management system,” Deynes said.
“People will support this when they have a direct hand in creating it.”