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Performance reviews are supposed to help both employees and companies succeed. But for many organizations, evaluations have become time-consuming, ineffective and unpopular.

If you think your review process could use an overhaul, begin by asking the following questions.

Are Your Performance Reviews Annual?

Many companies stick with a yearly evaluation because of tradition. “This is the way we’ve always done it.” The biggest problem with this system is it provides feedback rather than feedforward. For example, let’s say your company does reviews every January. An employee makes a mistake in February. And, guess what? The error comes back to haunt him eleven months later. Can you feel the frustration? Not only is this old news, but there’s nothing that employee can do about it now. Former Chief Talent Officer at Netflix, Patty McCord, recommends a coaching approach instead. In sports, coaches don’t wait until the end of the season to tell players what they did wrong; they give suggestions and praise as they go along. In business, this may mean quarterly reviews, more frequent one-on-one meetings or even the implementation of performance review software.

 

Do You Rank Employees on a Scale?

Rating scales and check boxes make people feel like they are back in school looking at their report cards. And, despite possible good intentions, these ranking systems can be both counterproductive and discouraging. Employees who score “Exceeds Expectations” will be thrilled, but they may receive no direction as to how to make further progress. Meanwhile, employees who “Need Improvement” will feel defensive and angry, and they too may receive no direction as to how to make further progress. Try to focus not on scores, but on rich and meaningful conversations about achievements, personal goals and expected outcomes.

 

Do You Give Raises and Promotions Based on Evaluation Results?

The primary purpose of a performance review should be to offer the guidance, tools and resources employees require to do their best work. Unfortunately, if an individual’s income and/or future depends on their annual review, they will be far more interested in their score rather than in their professional growth. Plus, especially for averages employees, attempting to determine who is a shade better or a shade worse wastes managers’ time, demotivates employees and does little to improve performance. (McKinsey & Company, 2016)

How effective is your employee evaluation process? If you answered Yes more often than No to the three questions above, you should consider revising your system. However, before you make sweeping changes or dump performance reviews altogether, remember, what works for one organization may not work for another. Some companies, like Microsoft, feel revamped performance reviews have produced positive results, while others have given mixed reviews. (The Washington Post, 2016) Figure out what is in your best interest based on your business’s leadership and culture.

 

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