If you recently became a manager, you may be looking forward with some trepidation to the dreaded performance review process. Employees are now looking to you for guidance regarding the jobs that they are doing, and you were probably promoted to this position because, among many reasons, someone thought you have wisdom that others can benefit from. But what's the procedure for this task, and what do you need to think about to prepare for it?
Many companies set up processes to formally evaluate employee performance on a regular basis; typically annually or semi-annually. Some don't because employers and managers often feel that these are time-consuming exercises that do not yield desired results. That's unfortunate, because conversations about performance have the potential to lead to extremely fruitful results for people and the companies they work for. Perhaps your organization shares the performance management concerns released in a CEB study, which shows the following:
- 95% of managers are dissatisfied with their performance management systems.
- 59% of employees feel performance management reviews are not worth the time invested; 56% said they do not receive feedback on what to improve.
- Almost 90% of HR heads report that their performance management systems do not yield accurate information.
So why even bother with performance a management program?
Well, performance management, when done correctly, can ensure employees are meeting or exceeding expectations. Also, just think about it from the employee's perspective. It's hard to do a job if you don't know when you're hitting the mark. Even though you're a manager now, you'll probably still want feedback from someone else on how you're progressing and what you might do to tangibly improve in your designated roll. Additional benefits provided by a well-run performance management program include:
- recognizing employee achievements and valuing performers
- increasing employer-employee communication and strengthening relationships
- documenting incidents of poor performance for future reference and/or validating demotion, layoff, or termination actions
- providing employees with motivation and defining structure
- establishing employee goals to align with the organization's overall strategic direction
Choosing the right method of performance reviews for your organization can be challenging. The method that is selected should align with the company's culture. Whichever approach that your company uses today - or settles on, if there currently isn't one - it's extraordinarily helpful to use a Human Capital Management system that can support it by providing transparency into the process and tracking the details. The best of these solutions will ease the most painful parts of the process, freeing you and your Human Resources department to focus on the most important aspect: employee growth and development.
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In terms of the performance evaluation process itself, there are several methods to choose from, a few of which include:
Management by Objectives: Specific goals and timelines are agreed upon by the employer and the employee. Success and failure are easily defined under this method. However, without a way to document and track those objectives, the details can easily and quickly be forgotten. This outcome ends up frustrating managers and their employees when trying to evaluate the results. If you don't have an HCM system to help you with this, make sure you develop a tracking method that you and your employees can collaborate around.
Rating Scale: A rating scale methodology is commonly used and is typically easy for employees to relate to, as it is similar to how students are graded in school. A number scale is developed (e.g. 1-5), with the lower numbers indicating unsatisfactory performance and the higher numbers representing exemplary work outcomes. An individual's defined traits and skills are then rated by the manager on the scale to determine if employees are meeting expectations.
360-Degree Feedback: This method typically includes feedback from the manager, peers, direct reports, customers, vendors, and the employee his/herself. The process produces multiple perspectives, giving a well-rounded view of the performance (hence the name). This is probably the most thorough method of performance evaluation. Yet it is also the most complicated to track and evaluate, and a HCM software solution is almost mandatory if the results are going to be understandable and worth everyone's effort.
Regardless of the method your organization selects, keep in mind that it is critical for performance conversations to be ongoing and regular; not just a couple of times a year. The importance of performance management is also about providing continuous training and development opportunities, giving both positive and negative feedback, and following established procedures with great discipline.