Performance reviews and evaluations are how we keep our workforce in good shape. Retention and engagement both increase when good work is consistently and relevantly rewarded, and the documentation of poor work keeps the company safe and moving forward. Evaluations are how we keep a finger on the pulse of our workforce, but a lot of leaders aren’t using them optimally, or at all for that matter.
If your performance evaluation process is like a shocking amount of other companies out there, it is falling short and ultimately a waste of time. Mercer’s Global Performance Management, a consulting firm, conducted a survey that found while most management has a performance evaluation system in place, almost half of them admitted that their system needs work. Nearly half also admitted that their systems or processes don’t align performance with compensation.
According to Mercer’s study, only 3% of companies believe that their performance management systems provide exceptional value to the company. That is a shockingly low percentage. Almost all management has these systems in place, and almost all of these systems are considered sub par. Where could this short coming stem from?
We all know that the employer-management relationship is often the direct source of both successes and failures. Mercer took a look at how employees rated their employers on evaluations. Sort of like an evaluate the evaluator survey.
These numbers represent the percentage of employees who claim that their managers are “highly skilled” in these areas.
- 14% Holding formal performance evaluation discussions with employees
- 8% Setting smart goals
- 6% Linking individual performance to actionable development planning
- 6% Having candid dialogue with direct reports about their performance
Considering how low these numbers are, this could be considered the source of ineffectiveness in employee evaluations. Very few mangers or supervisors are actually trained in performance reviews and almost none of them like this part of their job. No one likes getting negative feedback and no one likes giving it. Therein lies the problem, why are these evaluations focused on the negative, and why is the manager the only one giving feedback?
In a Wall Street Journal article, Samuel Culbert contends that there might be a better way,
“The one-sided, boss-dominated performance review needs to be replaced by a straight-talking relationship where the focus is on results, not personality, and where the boss is held accountable for the success of the subordinate (instead of just using the performance review to blame the subordinate for any problems they’re having).”
The performance evaluation is in a state of disarray, and it sounds like the traditional way of doing things is not working. Jerry Bumgarner, a performance management pro, tells her story of a nightmare performance review that, thanks to one great HR Director, ended on a high note.
Jerry went six months at a company conducting business as usual, never having any problem with management, or receiving any negative feedback. So when it was time for her performance review, she was shocked to find a very negative report. She was disheartened and felt like management had been dishonest with her by not giving her any of this feedback on a regular basis.
This is what happens to a lot of employees during evaluation time. They miss out on a raise or a bonus, not because they were doing a poor job, but because no one bothered to evaluate them along the way. This is a huge moral killer and gives no incentive for improvement.
Instead of throwing in the towel, Jerry met with her HR Director and together they worked out what a real performance management review should look like.
“The HR Director, realizing I felt I had been treated unfairly, met with me and my supervisor to lay out a plan. His plan included several compensation related goals that were to be completed during the next six months. Each of these goals contained very specific expectations regarding what was to be achieved and how. I accepted them as a challenge and, after agreeing to seek frequent input and meet regularly with my supervisor to review my progress, I set out to prove what I knew I was capable of.”
While we don’t have the formula for the ultimate and most effective performance reviews, we can tell you that open communication and a continued focus on performance is vital in driving the success of any business. Don’t wait until the formal review to really focus on your workforce. If managers and employees are just interested in getting by day-to-day, there isn’t a performance evaluation program in the world that will improve productivity or the quality of work.