For most organizations, performance reviews have become part of the furniture. Managers and staff join firms assuming that appraisals have always been there and always will be there, and they have no reason to question the existence of or need for these appraisals. Employees and managers just get on board the performance review train without a second thought.
But perhaps appraisals should not be taken for granted; maybe we should do some more questioning. Research from Leadership IQ found that only 13 percent of managers and employees and 6 percent of CEOs believe their appraisals are effective.
Confidence in employee appraisals is at a serious low. If your business is continuing along with ineffective appraisals, then performance reviews are probably not only driving down employee morale, but also damaging your employer brand.
Employers can’t afford to leave their appraisals as they are. To help you enhance your performance management processes, I have outlined four changes your company can make to improve the appraisal process:
1. Get Rid of Forced Ranking
Deloitte and many other commentators have called for an end to forced ranking, a process by which managers are forced to sort employees into three categories: high performers, average performers, and underperformers.
Not only do managers dislike carrying out forced rankings, but also this crude approach demotivates underperformers. Deloitte suggests that the existing appraisal process, originally developed to review the performances of manual laborers, is no longer relevant in a world where 70 percent of employees perform service or knowledge-intensive jobs. Employees in such jobs are not easily or effectively compared via forced rankings.
It’s also worth mentioning that 6 percent of Fortune 500 firms have gotten rid of forced ranking, and more are set to follow.
It’s time to put an end to forced ranking. Doing so should make appraisals more palatable to staff and managers alike.
2. Replace Scores and Ratings With Constructive Feedback
Some companies have removed scores from the performance review process altogether after finding that such ratings were causing a lot of angst in the organization. Employees were more focused on the labels than on the actual feedback. In other words, a ratings fixation was hijacking and subverting the appraisal process.
To improve your performance review process, abandon ratings. Instead, use something like the CERN Competency Model. This particular model traffics in “achievements and competencies demonstrated” and “areas needing further development,” both of which are far more constructive than numerical scores.
3. Conduct Appraisals Quarterly or Monthly
Replacing “heavy” annual appraisals with more frequent, lighter-touch quarterly/monthly check-ins has many advantages. For example, many staff members don’t believe that annual performance reviews present an accurate picture of a given employee’s performance. More frequent check-ins, on the other hand, allow managers to give feedback that is more closely tied to an employee’s day-to-day performance.
4. Let Employees Lead the Way
Most, if not all, employees will feel that performance reviews are more helpful and less critical if they are able to uncover their own areas for development, rather than having a manager point them out.
Why not let staff lead the way? Give employees the chance to honestly assess their own performances, and then have managers simply confirm what the employees have said or add a little more if necessary. Encouraging more self-generated feedback should help to create a more permissive and supportive environment.
Ineffective performance reviews damage employee morale and employer branding efforts. By following thee four steps outlined above, employers can begin to reclaim their appraisal processes from the realm of mediocrity and develop performance management processes that engage staff members, drive greater performance, and enhance their employer brands.