Updated: October 2020
Individual employee performance is both important and powerful.
It’s, therefore, essential to get performance reviews right. However, even before 2020 unleashed its changes on us, there were inconsistencies, lack of preparation, and confusion about where performance reviews should sit in an overall performance management strategy. Everyone keeps telling you that annual performance reviews don’t really work, but with the performance review being such a crucial part of managing and increasing your workforce’s performance, what are you supposed to do?
This guide will help you determine what kind of performance reviews are right for your organization, how to plan and implement them, and offers suggestions and resources to help you get through what for many HR professionals is the busiest time of the year.
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Are Performance Reviews Required in 2020?
Performance review season is upon us...or is it?
Like Google, many companies are delaying their performance reviews for six months until COVID-19 is hopefully under control. Facebook is giving all its employees an extra $1,000 in their next paychecks, along with a universal “exceeds expectations” review.
For some companies, this approach may work. After all, many employees are struggling with a new normal and trying to manage both home life and work-life, including increased child or elder care demands, unexpected financial burdens, decreased productivity due to distractions or home office inadequacies, or emotional stress. This doesn’t even cover the employees who have actually suffered personally from the pandemic in the form of physical illness, symptoms, or caring for a family member who has the virus.
However, as we all continue to adapt to the new normal, many companies are choosing to move forward with the performance review season as usual. In some cases, it may be necessary to reevaluate positions and performance as continually shifting priorities and workloads may have fundamentally changed how we evaluate and empathize with one another. In other cases, there may be a genuine financial need to assess performance and establish standards for the coming fiscal year.
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Just remember, you shouldn’t be trying to weed out poor performers or base merit raises on this process right now. Instead, look to strengthen your company culture and reinforce its values. Whatever your company’s reason(s) for having performance reviews this season, ClearCompany has the resources you need to create an effective performance review process.
How to Prepare for a Performance Review Cycle
Conducting an effective performance review seems simple...to those who have never done it. However, for the HR professional, there’s nothing simple about it. You have to:
What You’ll Learn in this Guide
- Are performance reviews required or changing in 2020?
- How to prepare for a great performance review cycle
- How to conduct a successful performance review
- Tips on conducting a performance review remotely
- The best way to structure a performance review
- What to ask during a performance review, including conversation starters and prompts for employees
- How to effectively train managers in performance reviews
- Writing effective goals for performance reviews
- Ideas for successful performance reviews
- Best practices for giving a performance review
- Performance reviews during COVID
- Decide the type of reviews
- New Hire Reviews (30, 60, 90 Day Reviews)
- Competency and Roles-Based Reviews
- Time-Based Reviews
- Peer and 360 Reviews
- Decide the frequency of reviews
- Annual Performance Reviews
- Feedback Loop
- Select your evaluation criteria
- Employee Goals
- Company Performance
- Hiring Competencies
- STI/LTI Compensation Schedules
- Constantly and consistently gather performance data from a variety of sources
- Microfeedback platforms
- Reward and recognition program
- Manager and team lead feedbackFellow employees
- Build processes and documentation to support your reviews program
- Find the right technology to support your performance reviews
- Annual review costs are approximately $120,000 in time spent
- Companies with engaged teams have 8.6% higher profit margins than those with disengaged teams
- 9 in 10 managers are dissatisfied with how their companies conduct annual performance reviews
- Select, train, and prepare managers on effective performance review practices
- Manage any employee dissatisfaction post-review. According to a 2019 study from Gallup, only about 10% of U.S. workers felt engaged after receiving negative feedback on the job. 30% were so put off by a negative review that they actively looked for a new job.
- Document and manage goals and performance data until the next round
While all of the above considerations are very important, there are a few necessities that will make any performance review useful for the employee and the company and less stressful for anyone in the room.
How to Conduct a Performance Review
Knowing how to conduct a basic performance review will serve you well in both your role and in the managers and leadership you need to train and prepare for a performance review cycle. The basics are to inform, educate, and collaborate with employees on their past performance and their plans for the future.
How you do that specifically can be broken down into four general categories:
- Illustrating to employees how their goals fit into the company’s bottom-line goals
- Connecting constructive performance feedback, as well as praise and recognition to employees in a personal way
- Creating a feedback loop that is both fair and meaningful for employees
- Integrating performance management with business priorities and company values
When you facilitate a performance review cycle that hits all these notes, you can be assured that both your company and your employees will benefit. Performance appraisals are a key part of any performance management strategy.
Before the Performance Review:
- Get to know who your employees are based on their interests, likes, and dislikes.
- What does good performance look like to you? Define what your ideal comprehensive list looks like. This may include:
- Job-specific tasks
- Contextual behavioral performance
- Specific and measurable goals
- Record your employee's performance through an automated system to help you keep better track of reports and ensure timely feedback.
- Self-assess employee performance to help get a realistic view of where performance needs to be improved.
- Focus on building lasting relationships and trust with each employee. Ultimately, you are there to guarantee that they have the essential tools to succeed throughout their role.
- Assemble a list of developmental opportunities and goals with your employees to help further their performance and to hold them accountable for achieving those goals.
During the Performance Review:
- Highlight positive feedback on tasks that the employee has done well throughout the course of their position.
- Sit down with employees and assess their job performance. Make sure to explain the factors that went into their overall performance rating.
- While you go through each element of their performance review, you and the employee should have a thorough understanding of the employee's duties and tasks and understand the difference between good and poor performance.
- Thoroughly explain to the employee how ratings are measured and provide reasoning behind high or low ratings.
- Provide as many (specific) examples as possible. Feedback is only effective when you are clearly demonstrating which areas need improvement, rather than just stating that performance needs improvement.
- Provide a clear explanation regarding any changes in performance and ensure that the employee understands the designated actions.
- Always provide clarification and be open to questions if an employee is unsure about the feedback that is presented.
- Feedback should be focused on improving performance. Suggest guidance tips or develop a plan on how the employee can do better.
- Ensure that strengths and weaknesses are highlighted. Once identified, managers will be able to assess what training needs to be done. Combining performance feedback with a developmental plan of the established goals for the employee will allow them to perform their job effectively.
- End the performance review on a helpful note. Summarize to the employee that you are there to help them succeed.
After the Performance Review:
- Schedule a follow-up meeting with the employee to create an individualized and designated developmental plan.
- Tie together your organization’s core objectives with the individual’s performance. Managers should align individual goals to the organization’s objectives to motivate and engage employees. This allows them to see how their performance contributes to the overall company objectives.
- Take time to develop contextual performance goals with the employee that includes set tasks. When developing goals, establish goals that are concrete, specific, and measurable.
- Make certain that feedback is ongoing, consistent, and task-specific.
- Set up weekly or monthly meetings to review the individual’s progress. Use this time to ensure they are still on track to complete their performance goals.
- Request input from other members of your team to enhance the employee’s performance.
How to Conduct a Performance Review Remotely
Recognize your employees are stressed, and these reviews may go very differently than they have in the past. If possible, communicate how your performance review process will be changing to a remote performance review cycle.
The difference does matter. Zoom fatigue has now entered our professional lexicon, and it may not be going away anytime soon. While many companies have successfully handled remote work and performance management, it’s a brand new experience for others.
With that in mind, conducting a remote performance review cycle is possible. Here’s how:
- Communication is key. Your communication with your employees should start well before the reviews. Let your employees know exactly what to expect from the technology you’ll be using and tips on troubleshooting any issues to the length of time the review will take. Consider some or all of the following variables to communicate to your workforce:
- Type of review
- Agenda for the review
- Company mission, vision, values, and/or goals to review
- Notes or documentation from the last review to have handy
- Whether the review will be audio or include video
- When to log on (you don’t want employees overlapping one another)
- If they need to prepare questions for you/their manager
- How or if you will be using different metrics during this time
- Give it time. When on video, context cues are a little harder to pick up on. Do NOT be vague. Now is the time to be explicit with praise, specific with constructive feedback, and offer solutions and calibrations to your employees. Traditionally, performance reviews are used to implement PIPs or merit increases. However, in this climate, experts recommend offering more grace and time for your low performers to shift gears.
- Be clear. Right now, employees are struggling with a great deal of uncertainty. Overall, they simply want to know if their job (and maybe the jobs of their colleagues) will be there tomorrow. With the news full of layoffs and rising unemployment numbers, if you can offer certainty, or assure them their jobs are safe, do so.
- Be transparent. Train your managers to be as open and honest with employees as possible. Understanding where the company is going, getting a clear line of sight into what other departments or colleagues are contending with on a professional level can help create additional empathy in the workplace.
- Document everything. A great performance review process is only as good as the performance management software that underpins it. Ensure all your employees have access to their performance reviews and the career plans or goals that came from it.
- Plan for interruptions and technical difficulties. Because so many of us are working from home and using remote conferencing technology, having an alternate time, a second line or tech option, and being flexible with time are all important. Your employees may be grappling with schooling children at home, a partner or spouse working at the same time, dogs barking, delivery people ringing the doorbell...the list goes on. Perhaps you and your managers are also dealing with these things. Setting the stage for interruptions and what you will do about them during the performance review makes those seem like less of a disaster if and when they happen.
How Do You Structure a Performance Review?
What do you want them to take away from this review?
Whether you want to assist an employee in refining their goals, fix some poor habits, or help create a career map and plan, write down the ultimate objective of the review.
Expect employees to be prepared and demand it of yourself. Have a quick conversation before the formal review to highlight the main topics and next steps, so you both leave the review ready to tackle whatever the next day holds.
As a manager, constructive feedback is part of your job, and Harvard Business Review found 57% of employees actually prefer corrective feedback, and 72% said they thought their performance would improve if their managers would provide this corrective feedback.
Be sure you’re ready to offer up a potential solution for performance improvement. Encourage your managers to brainstorm solutions for employees who are struggling or not meeting goals.
You need to accurately portray their performance, all of their performance, since the last review. This means you have to have a reliable means of tracking issues, goals, employee-company alignment, managerial feedback, and so much more. One of employees’ biggest gripes (especially about annual reviews) is that they seem confined to the most recent work, and not the body of work that’s occurred in the chasm between their current appraisal and last review. This is particularly true now as many employees’ productivity and performance may have declined due to circumstances beyond their control.
Performance Review Statistics
From the Workers' POV
- According to a 2019 study from Gallup, only about 10% of U.S. workers felt engaged after receiving negative feedback on the job. (Source)
- Nearly 30% were so put off by a negative review that they actively looked for a new job. (Source)
- 55% of workers believe annual reviews don't improve their performance, according to a 2019 Workhuman Analytics & Research study. (Source)
- In 2016, 82% of workers surveyed said their company used an annual review. That number dropped to 65% in 2017, 58% in 2018, and 54% in 2019, according to the Workhuman report. (Source)
- A 2018 OfficeTeam survey supports the trend toward shorter, more frequent performance evaluations. (Source)
- According to a TriNet study on performance reviews, 22% of full-time, U.S. employees surveyed said they’ve called in sick because they were anxious about receiving their reviews. (Source)
- A whopping 62% of respondents said they felt “blindsided” by the feedback they got from their managers. (Source)
- A study at the University of Colorado found that executives who are women and people of color that push for other women and people of color to be hired suffer from their own reviews. (Meanwhile, white men are actually rewarded for doing the same thing.) (Source)
From the Companies' POV
- According to a survey conducted by Mercer, only 2% of companies believe their performance management process delivers “exceptional value.” Less than 3% find their feedback practices to be excellent. (Source)
- 70% of companies represented in the study said there should be a stronger link between performance management and other talent considerations. (Source)
- Related, so-called "thriving" employees are four times more likely to work for a company that understands their unique skills and interests than their "non-thriving" peers. (Source)
- While studies have shown that more frequent feedback can improve employee learning and task performance, there’s also a limit to its effectiveness. If feedback becomes overwhelming for employees, it can actually reduce learning and performance. (Source)
Steps for Managing Your Performance Review Cycle in 2020
- Work with company stakeholders to determine how your review process will be different this year.
- Create clear guidelines about what you want to measure and how you’ll work with employees.
- Approach your managers and leaders with training, focusing on remote reviews and empathy during the process.
- Begin asking about more frequent check-ins or less formal review cycles in the future.
- Communicate clearly and specifically with all employees to manage expectations and create stability.
- Prepare your platform to handle the administrative details (Where will recordings be stored and for how long? If you have changed the performance standards, is that noted in the platform? Will you be changing the frequency of reviews or appraisals in the future? Are employee goals centered around reasonable expectations in the current climate?)
- Gather peer feedback as well as management input.
- Encourage employees to self-evaluate before their formal review.
- Set aside ample time for each review, and create an agenda for managers and leaders.
- Document all output and goals from the reviews and gain employee sign-off for alignment.
What to Ask During a Performance Review
What do you want them to take away from this review?
Start with them. If you’ve had your employees fill out a self-evaluation, you already have some information with which to work. Ask for clarification on anything they’ve written down or noticed. Explore their experience before launching into your managerial and peer review notes.
Go back farther. When discussing their overall view of their performance, ask for specifics, and probe for them to go further back. Annual performance reviews suffer from something called “recency bias,” and it doesn't only impact the reviewer. An employee's answer about their proudest moment would be very different in February than it is today. Help them remember all they’ve done over the time since their last performance review.
Frame constructive criticism within company values and goals. This allows for a slight separation between the criticism and the person’s performance. It offers up a yardstick applied to all employees and gives the employee something to think about in terms of alignment. Instead of “negative feedback,” try “areas for improvement.”
Search for meaning. Employees who are engaged are often working on meaningful projects. Ask your employees if they see meaning in what they’re doing. If they can’t see the meaning in their role, work with managers and leaders to ensure their projects align with what the company is looking to achieve.
To try: Right now, you may be measuring things besides the typical widget-making or percentage of sales we typically use. Qualities like collaboration, stellar service, resilience, and adaptability are areas in which you can praise and recognize employees. Even if the work they’re doing doesn’t feel meaningful, the way they treat customers, clients, coworkers, and colleagues can be.
Focus on the behavior, not the person. When managers deliver feedback focused on improvement, it needs to be seen as actionable and supported by facts. Feedback should always be about the behavior, not the employee or their intentions. For instance, an effective approach for managers to address an employee’s behavior can go as follows: “I’ve noticed that you’ve arrived late to our weekly meetings four times this month.” A non-effective way of addressing employee behavior would be stating, “You have been very inconsiderate.” For feedback to have real value, it needs to be supported by concrete evidence and not just opinion.
Performance Review Conversation Starters
No two performance reviews are the exact same. After all, your employees are different, and their performance reviews should be customized. However, here are some ways to phrase various accomplishments in order to convey how they created a better work environment with their performance successes.
Results and key accomplishments
You impressed leadership and exceeded expectations when you did _________ which impacted the company in the following ways...
Your project was completed ahead of the deadline and impressed the [client/manager/your coworkers].
Your work on the ____________ allowed your coworkers/colleagues/team members to ___________.
You completed ___________ by ____________ resulting in [number/percent/key metric] for the company.
Tying values to performance
You exemplified our VALUE when you did ___________.
Your performance on the ____________ project showed VALUE in action.
You’ve been a key contributor to our success and culture by showing others how VALUE is done in real life.
You regularly do BEHAVIOR, which is in total alignment with our VALUE.
The project you led contributed significantly to the team/department/company goal of ____________.
You made a huge impact on the bottom line by taking the initiative to do ___________ when you were only assigned _________.
Your work on PROJECT NAME helped us reach COMPANY GOAL by DATE.
On this team, you are well known for doing ___________, and this has made the team better at _________.
It’s clear you’ve been working hard on ___________ and it’s made a noticeable difference in SPECIFIC PROJECT.
Teamwork and Collaboration
Your handling of the SPECIFIC SITUATION between [client/coworker/leader/vendor] and client/coworker/leader/vendor really helped move PROJECT along. Thank you.
Your willingness to sacrifice ____________ so your team/coworker/boss could take on __________ made a huge difference on the team.
I’ve noticed you do _____________ lately to assist ___________. That is particularly helpful right now.
Want some additional performance review prompts? One of our most popular resources offers over 100 Starter Phrases to align employee performance and goals so you can give better feedback. Download Now
To Help Employees Articulate Needs
Employees do less than four of these per year (if their company offers anything beyond annual reviews.) With that in mind, it’s no wonder they might get tongue-tied when asking for performance feedback. Here are some phrases (courtesy of Robin Blandford, CEO of D4H.org) you can offer your employees during self-evaluation or even as a fill-in-the-blank exercise during the interview. You don’t need to use them all, but they’re a great way to determine needs that are below the surface.
I'd like to tell you about...............
Here's a status report on...............
I need more authority on...............
This is what I'll do on...............
A new goal or project I'd like to tackle is...............
I'd like your help in acknowledging............... for the success they had on ....
I'm concerned about............... and need you as a sounding board so I can decide what to do.
What do you think of ............... I'd like to discuss it before I go further.
I'm stuck and need some encouragement to move ahead with................
I'd like your vote of confidence on my idea to...............
Why do I want to ................ ?
I need more clarity on ...............
I need perspective. Am I making progress on............... ?
I need feedback on my work on ...............
I'm confused about...............
I'm overwhelmed by...............
Who could help me with............... ?
Why is............... important?
What do you want me to do on.............. ?
What are my goals for ....................?
What does a good .............. look like?
What do I need to know about ...............?
How do I start ................ ?
What are the next steps on ..............?
What resources are available to help me with ............... ?
What not to say in a performance review
Your performance goals before the COVID-19 crisis emerged are no longer the goalposts. You need to focus on individual employee growth and point to slightly different variables and values. Frankly, if you are focusing solely on performance via traditional measures, you may be missing an opportunity to overhaul your performance culture. Many HR professionals and managers are using this performance review cycle to ensure their remaining employees are taken care of and not suffering from burnout.
While it’s imperative to be empathetic during this time, businesses also need to remain productive. Often, HR is tasked with toeing the line between keeping the machine moving and simultaneously ensuring that employee experience doesn’t suffer. It’s never been more difficult.
Sometimes motivating employees to perform better requires an alternative route, but tread lightly. Take this example from Robert Lentz, part of the editorial staff at Business Management Daily:
“I kept giving everyone more and more work, and they kept saying, ‘We’re slammed!’ But it all kept getting done… I realized that people were constantly reshaping the way they worked in order to absorb the load. Changing their techniques, streamlining, pinpointing focus. When their backs were to the wall, they spotted inefficiencies and corrected them… The only problem, which I totally missed while thinking they were just awesome employees, was that I was making them miserable.”
How Do I Train Managers in Performance Reviews?
Training managers to give great feedback not only makes your job easier, but it can make the evaluation process even more accurate, given the manager is usually working with the employee(s) every day. However, managers are also typically busy, never more so than right now. Here’s how you can give them the training they need to create a fantastic performance culture.
- Tell managers not to schedule the review until the self-appraisal comes in. This meeting is important, and both the manager and the employee being reviewed should be prepared for it.
- Have them establish early in the review that this is a two-way conversation. Your managers should be doing more listening than talking, at least in the first half of the meeting.
- Teach your manager to focus on the gap between the company values, the employee’s self-appraisal, and how the employee and their peers have rated their performance.
- Be specific! Managers often try to couch their feedback in vague statements, hoping to spare employees’ feelings. In fact, employees need to hear specifically where they are excelling and should be made aware of the places they’re struggling as well.
- Have your managers be consistent and constant with when these reviews are happening. Every employee being evaluated should know precisely when it’s happening.
- If they only remember one thing, it is this: “We do not evaluate people, we evaluate results.”
Peer reviews give employees a chance to provide praise to their peers, which 76% of employees say is extremely motivating. It also gives employees a chance to get feedback from those they work with on a day to day basis, making team productivity likely to increase since they can be more open and honest with each other on performance issues that the team might be facing.
How Do You Write Effective Goals for Performance Reviews?
What should you include in your employee review plan to ensure it accurately measures their progress? Before writing out your review, begin by thinking about the employee’s core competencies, your business’ objectives and goals, and how they both tie into the employee’s specific role. Here are a few crucial things to do prior to your employee review meeting:
3 Crucial Things to do Prior to your Employee Review Meeting:
Review their Previous Performance Documents
Determine Goals and Objectives
Create an Agenda and Rehearse
- Review their Previous Performance Documents – Without this, you don’t have any benchmarks against which to compare their progress. Read their past self-evaluation/performance plan documents and analyze whether or not they met their goals, as well as their overall contribution to achieving your business’s goals. Take note of any areas of struggle.
- Determine Goals and Objectives – Once you have reviewed their previous performance records, you’re able to come up with goals and objectives for your next performance review. This conversation’s framework should revolve around what they can do to make your business more successful using their core competencies.
- Create an Agenda and Rehearse – In your agenda, be sure to include any follow-up comments relating to their previous review meetings, the goals you’ve just created, a slot for them to reflect on their progress and address concerns, and action items. Rehearsing may sound weird; however, it’s an effective way to prepare yourself for the conversation and avoid any hesitation during the meeting. Transparency is key.
Best Practices for Giving a Performance Review
Talk to leadership and coworkers about the company’s short- and long-term goals. Work together to figure out how to infuse those into your workforce as part of the reviews.
During the review process, you will be gathering a lot of information that will require feedback, dialogue, and action. If these things don’t happen right away, employees are left feeling like they weren’t heard and the entire process was a royal waste of time. In fact, a majority of employees expect feedback from their review as soon as possible.
Performance Review Tip: Send out a follow-up account of the review, what was discussed, what goals were set, and the next plan of action. It might seem like this is something that the employee should already be responsible for, but think of it to formalize the review and officially passing the baton over to the employee. If the employee takes no further action, you will also have a written confirmation with details of the review and what you provided them to improve their performance.
Performance Reviews During COVID
COVID-19 has thrown a wrench into many of the processes that organizations have set in place. With many employees working remotely, there are additional hurdles that leaders need to overcome when preparing and executing performance reviews. For many, this entails implementing and learning new technologies to help facilitate a remote performance discussion. Remember that within the last six months, many employees have had to:
- Learn and implement new technologies at home
- Adjust to a rapidly changing workplace as we adapt to the new normal
- Grapple with new challenges and responsibilities both at work and at home
- Shift to a remote work environment and create a productive workspace at home
Add all that up, and you have a performance appraisal time we all need to prepare for. Here’s how:
Beyond simply getting a sense of what matters to your employees and what’s going on in their lives, you can also use this to inform your review. Was Grace an A Player for three years and became distracted and difficult to work within the last six months? Knowing that Grace is now homeschooling 3 kids under the age of 12 and her partner is essential medical personnel may just give that assessment some context.
“There’s no template, and it’s not one size fits all,” says Anna Tavis, a clinical associate professor of human capital management at New York University and an editor at People + Strategy, a journal for HR executives. “Everyone is stretched in their own way,” she says. It’s imperative then, “to make an empathetic assessment” based on “where your people are.”
In short, preparing for performance reviews this year may be a uniquely challenging experience. With proper planning and support, leaders can facilitate an insightful and productive discussion. ClearCompany can assist and support your team as you wade through these murky waters. Our solutions can help your organization more effectively manage your team’s performance, even from afar. Reach out today to speak to one of our team members or set up a demo.