Performance reviews can be nerve-racking and awkward. You have to tell someone what they are good at, not so good at, and what they need to improve. If not done correctly, a performance review can leave your employees feeling confused, disappointed, or worried.
On the other hand, performance reviews are an essential part of running your successful business and critical for team growth. They provide an opportunity to ensure that everyone is on the same page about expectations and tasks. A well-executed performance review is a powerful mechanism for positive change in your company. It will help reinforce strong performances, redirect poor ones and provide cohesion and vision for your team.
How Did the Performance Reviews Even Begin?
Performance reviews evolved out of the U.S. military’s merit-rating system created to identify poor performers for discharge or transfer. After World War II, 60% of U.S. companies used performance reviews to manage workforce performance. By the 1960s, 90% of companies were using them. Unfortunately, there are remnants of fear and frustration in the review process that persist today.
What Went Wrong?
The traditional performance-management approach has become outdated. Generational attitudes about work have shifted. The types of business products and services have transformed. Styles of communication have changed. Just think about social media. Giving and receiving feedback can be pretty scary.
On top of these dramatic changes, the Covid-19 pandemic hit, and business as usual stopped. Companies wanted to avoid the typical stress that comes with performance reviews. Twitter canceled their annual 2020 performance reviews. Google called off their mid-year reviews. However, only 5% of U.S. companies reported putting reviews on hold or canceling. Many businesses adjusted and took a more lenient approach for their 2020 reviews. After all, if you lost a significant portion of your team or transitioned how your team worked, you weren’t in the best position to follow through on the structured review process, and it may not have been fair to yourself or the remaining employees.
Time to Change
Performance reviews should be conducted routinely, and the frequency of those reviews will depend on your company. However, the trend is moving to more frequent review cycles with a less formal review feel and a more of a “check-in” approach. The annual review has been falling out of favor since 2016. The percentage of workers who said their company used an annual review fell from 82% in 2016 to 54% in 2019.
We see that feedback is more effective when check-ins are frequent. This more frequent approach lets you clarify expectations before an employee gets too far ahead in an assignment. Workers who check-in with their manager at least weekly are five times less likely to become disengaged than those who never check-in.
Chance to Change
Now is the time to make changes to better support the work and goals of your employees. In 2021, we are helping our clients to process the lessons they learned in 2020 and finessing their performance review techniques.
Going through the review process with an employee requires a balance of looking back and looking forward. Tightening up the time between reviews enables people to operate in the present and face forward.
We are also steering our clients to focus on encouraging, forward-looking discussions about performance and easing concerns about metrics and pay decisions caused by the pandemic. For many employees, their pre-existing goals are no longer appropriate. Performance reviews allow you to set new targets and allow you and your employees to feel better about the future
Sources:
https://hbr.org/2016/10/the-performance-management-revolution
https://www.gallup.com/workplace/249332/harm-good-truth-performance-reviews.aspx
https://wiw-report.s3.amazonaws.com/Women_in_the_Workplace_2020.pdf
https://www.shrm.org/hr-today/news/all-things-work/Pages/performance-management-evolves.aspx
