Many business leaders and experts say that performance reviews are just not that effective. It’s true that there are many ways employers can tank one of these reviews and make it less helpful for workers. Some employees feel unfairly targeted or find it hard to listen at all.
The reality is that performance reviews have evolved into a fairly standard procedure that often fails to motivate employees, and even triggers more complaints than compliments.
However, I don’t think the performance review is a useless tool whose time has come and gone — at least not completely. Reviews can be helpful for both the employer and the employee, as well as the company itself. All you need is a few strategic tweaks to the process.
1. Make reviews more frequent than once a year.
By their very nature, annual reviews cover a lot of ground. A lot of tasks, projects and accomplishments get missed. The same is true of challenges and areas in need of improvement.
Moreover, focusing on employee assessment and motivation only once a year leads to a perception that the appraisal process is more a formality than a truly important business strategy.
Instead, use a shorter quarterly review to help both you and the employee keep accurate track of their progress towards company and personal goals throughout the year.
Related: 4 Unconscious Biases That Distort Performance Reviews
2. Always be preparing for performance reviews.
As beneficial as more frequent employee appraisals may be, they’re not always realistic for every company. For example, you may have a large workforce that would render four appraisals a year unworkable, no matter how short you make the appraisal meetings.
If that’s the case, you can still work with the employee to set specific work-related goals at an annual performance review. Just don’t wait until the last minute to make notes for that review.
Throughout the year, touch base with the employee when you can, and talk to their coworkers and direct supervisors. Then you can regularly update a word file or spreadsheet outlining the employee’s progress towards agreed-upon goals.
3. Don’t perform a solo.
While the traditional performance review is generally a solo act, where a manager shares their own opinions, a better approach is to crowdsource your reviews.
Include customers, colleagues and other stakeholders with whom the employee regularly interacts as valuable sources of information in preparing a performance appraisal. This will not only help you form a more complete picture of the worker’s strengths and weaknesses, but will also help you identify new areas for potential additional training or advancement.
Maybe the customer service representative has a talent for sales, or perhaps the marketing team member is ready for a management role. A solid way to find out this kind of information is to ask all the people who regularly interact with that employee.
Of course, you’ll want to apply this policy evenly to all employees, at all levels. And you’ll also want to insist that any feedback or commentary you collect from others should be productive and positively framed, and also stay confidential. It’s not typically another employee’s job to critique a coworker, after all.
4. Make it mutual.
The most productive performance reviews are dialogues, not monologues. Use the opportunity presented by the performance appraisal process for an authentic, in-depth conversation with your employee.
Solicit the employee’s input, and really listen. Take notes, listen thoughtfully, ask clarifying questions and then try to implement any good ideas your employees might share this way, giving the employee credit.
5. Acknowledge and praise.
It’s all too easy to focus on the “correct and motivate” part of the employee performance appraisal, and forget about an equally important aspect of the process: recognition and praise. Don’t simply criticize and correct. Remember that an appraisal requires assessing the entire “big picture” of the employee’s performance. That means the positive as well as the negative.
Acknowledgment encourages deeper employee engagement and commitment to both your company and its mission.
A dedication to helping employees grow and reach career goals must be baked into company culture, especially for startups. Part of that culture revolves around ensuring your employees, as well as your product, stay one step ahead of the competition. The employee appraisal should be geared towards helping improve their work performance so it helps your bottom line.
The ultimate goal of the entire process is to ensure that your company finds a product market fit (and profit), so that it’s attractive to investors at some point down the road, be it through an initial public offering, an acquisition or some other investment vehicle. Improving your employee appraisal process so that they’re actually helpful to your employees as well as your company is an essential step in reaching those company goals.