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Employee Evaluations

5 Elements of a Healthy Performance Review Process

Before you start defining the elements of a healthy performance review process, it’s worth investigating how or where your process went wrong. Historically, performance reviews were created with the best of intentions and remained unchanged for centuries.

The idea that people are motivated by knowing where they stand within an organization gave birth to the “rank and yank” method of ranking employees into top, average, and poor performing tiers (and eliminating those at the bottom). This was popularized by Jack Welch, former CEO and Chairman of General Electric (1980-2001).

As with many common business practices, the millennial generation is challenging the way performance reviews work. Not only have forced ranking and merit-based raises been found ineffective, leaders and human resources professionals have reported performance reviews to be a significant waste of time.

While performance management is sometimes a necessary evil, thankfully, the delivery system and the value it provides is trending in a healthier direction. Let’s have a look at five elements of a healthy performance review process.

1. Regularity

The traditional performance review that takes place once or twice a year tends to be an anxiety-inducing event in which employees are sometimes blindsided by their supervisor’s perception of their performance. To be effective, performance feedback should be delivered on a regularly scheduled basis so it becomes less stressful and includes more than an overview of how they have performed over the last twelve months.

Employees will have a better chance to grow, improve, and possibly change their approach to work if they’re receiving timely, specific feedback rather than waiting several months to a year after the fact to hear about their performance.

2. A Strong Focus on Goals

A healthy performance review process includes more than just feedback, it’s a great opportunity to establish goals and expectations. This is another reason the review process should be done more regularly. As soon as current goals are met or exceeded, you can put new ones in place, rather than waiting until a formal review to adjust strategy. This will help keep your team members from growing bored or frustrated and keep them focused on imperative business objectives.

Meeting to discuss an employee’s performance, as well as their goals, helps you as a leader understand the direction they’re heading and how you can guide them, as well as how you can align their strengths and interests toward the shared goals of your team. If you have a learning management system in place, you can also pair some of these performance goals with specific learning or training objectives and track progress in real time.

3. Two-Way Conversations

“Talking at,” your employees can make them feel intimidated, or worse, annoyed. The lack of two-way communication is one of the many reasons the traditional performance review is ineffective — more than anything, the employee just wants it to end as they might be feeling belittled, unimportant, or unheard.

Instead, use the designated review time to have a two-way conversation. Spend time discussing how your employee feels about their own performance and how they feel about your performance as a leader. Ask for their thoughts on the company’s current mission and goals. Encourage them to be decisive, and solicit their ideas. Where possible, put what they tell you into action, so they know that your interest in their opinion isn’t perfunctory. This method of communication is more aligned with the modern workforce; today’s employees, especially the millennial generation, prefer coaches to managers.

4. Balanced Feedback

You already know that going into a performance review with only negative feedback can discourage an employee from making the corrective behavior necessary to get on track. A poor performer still needs to understand how their skills are valuable to the organization, the areas they are making strides in, and where you see potential for improvement.

Similarly, providing only positive feedback (even to an outstanding performer) isn’t helpful either. A healthy review should balance both positive and negative feedback. Growth only comes from pushing people past what they thought they were capable of, and an ambitious employee will look for a manager willing to do just that. Your job as a leader is to do the pushing; by acknowledging areas of improvement, and establishing new goals.

5. Performance-Based Incentives

A system of goals and evaluation criteria is a step in the right direction if you’re hoping to boost performance. But your employees will never feel intrinsically motivated to improve unless there is some benefit or reward tied to success. If they know the only reward for above-average work is the approval of their manager, you won’t see much growth.

Make sure your performance reviews are connected to a tangible reward or incentive for each employee. How you reward the employee should be individualized, and is dependent on available budget, but it could be anything from a restaurant gift card to a quarterly bonus, or even a permanent raise for the highest performing employees. Don’t let your most valuable employees feel unappreciated, demonstrate their value to them with tangible assets–verbal affirmation is nice, but it doesn’t pay the electric bill.

When you do away with forced rankings and outdated goals and start having meaningful conversations with your team, you can soften the cutthroat atmosphere at work and engage your employees as individuals. This in turn will create a culture of trust, allowing for constructive criticism and healthy performance reviews that include regular, balanced feedback, goal-setting, and an opportunity for a two-way conversation. Furthermore, a healthy review process tied to measurable incentives will not only result in higher performance, but happier employees as well.

To learn more, check out 6 Tips to Tackle Performance Reviews for Managers and Employees.

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About the Author
Jessica Barrett Halcom is a writer for TechnologyAdvice.com, with specializations in human resources, healthcare, and transportation. She holds a bachelor’s degree from the University of Wisconsin, Green Bay and currently lives in Nashville, TN.

 

the value of coaching

Why Millennials Want Coaches, Not Managers

Your workforce is increasingly made up of millennials; this is unsurprising – they’re the ones with the most contemporary skills, and with each passing year they become a larger percentage of the working world. With close to 10,000 baby boomers turning 65 every day, millennials now represent the largest subset of America’s workforce. Approaching these younger workers with the attitude and expectations of a coach, rather than the antiquated characteristics of a traditional “boss,” is key to maintaining their engagement. Here’s how a coaching style differs from the approach of a traditional manager, along with a few insights about why this shift in managerial style is so important.

Coaching responds to failure with empowerment

A manager who behaves in the classic “boss” tradition is likely to take a disciplinary tone after an employee fails or does a poor job on a project. Getting “chewed out” by the boss is a familiar trope in the stereotypical work environment. Coaching, on the other hand, takes an entirely different approach. If a player on a sports team does badly, the coach may feel frustrated, but he or she is well aware that scolding and criticizing the player is not likely to yield better results in the future. Instead, a coach views failure as a sign that the player needs more training, support, and encouragement.

Harvard Business Review (HBR) describes the behavior of award-winning college coach Mike Krzyzewski after a player’s carelessness caused his team to lose. He took the whole team out for an ice cream sundae party, emphasizing encouragement and team-building, and then he held an extra practice to help everyone come together again.

Millennials want more frequent feedback

When you picture a coach guiding a team to victory, you probably imagine lots of feedback was involved. The coach is on the sidelines, shaping the choices that the players make and shouting encouragement or suggestions. After the event, the coach probably holds a video session and works together with players to identify areas that need improvement. It’s all very hands-on.

Now, contrast that leadership style with the annual employment evaluation that typifies an old-school manager’s pattern. An employee is called in to the boss’s office and given an evaluation containing praise and criticism that might be outdated, perhaps even a year old. A coach wouldn’t have a successful team if he or she only gave feedback once a year.

Furthermore, millennials want the high-touch guidance of a coaching culture. A global survey finds that overall, millennials want feedback 50 percent more often than older employees, with most of them preferring feedback on a weekly or monthly basis.

Employee success depends on rewards and recognition

While frequent feedback is a proven method for increasing employee engagement, the quality of that feedback is equally important. An effective coaching approach is based on recognizing each person’s individual strengths. Best practices include creating a company culture that emphasizes positive feedback and employee appreciation. Positivity is necessary in every workplace, but it’s especially crucial when you’re leading a team of millennials.

A recent Gallup report noted, “Only 19 percent of millennials say they receive routine feedback. An even smaller percentage of millennials (17 percent) say the feedback they do receive is meaningful.” This same report states that fewer than 15 percent of millennials ask for the feedback they really want; so it’s up to leadership to establish these employee recognition best practices.

Managers are an important source of professional learning and development

Forbes states that most millennials identify their manager as their main source for learning and developing skills, but only 46 percent of those surveyed believe their deliver on this hope. These numbers are helpful because they indicate a direction you can take with your management style. One millennial worker quoted in the HBR article states, “It’s very important to be in touch with my manager, constantly getting coaching and feedback from him so that I can be more efficient and proficient.” And to further illustrate how much millennials crave learning and development, it’s been reported that 62 percent of executives say millennials will consider leaving their jobs because of a lack of learning and development opportunities.

Coaching takes the whole person into account

Though today’s cutting-edge companies invest serious effort into making sure their employees have a good work-life balance, they also realize that this new approach looks at employees as whole people, not just a drone carrying out a task with little to no thought. A great deal of research has gone into the psychology of coaching and the need to consider the “inner game,” but this mindset is still very new to the corporate world.

As more managers realize that helping their employees to maintain a healthy work-life balance will result in more highly engaged employee, they will likely change their style of supervision to emphasize encouragement. It’s all part of a more holistic approach to talent management; a recognition of workers’ inherent humanity and a step away from viewing them only as cogs in the wheel of a production assembly line.

It’s all about performance

Of course you want to treat your employees well for their own sake, but you also want to be an effective business person. You want to manage your team in such a way that productivity increases, both now and in the future. This often means understanding the unique needs of your millennial workers.

A coaching approach, versus a top-down “I’m-the-boss” approach gives you an incredibly powerful tool for increasing employee engagement among your younger team members. These workers will respond with higher performance and greater loyalty, bringing sustainable growth to your bottom line.

To learn more about how you can effectively introduce employee recognition to your millennial team, download our white paper, “Sink or Swim: How to Engage Millennials to Ensure the Future of your Business.”

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