Monday, November 10, 2008

Performance Reviews

It’s that time of the year again, annual performance review time. The time of dread for employees across companies, all sectors, and all over the world, cue ominous music.

Yes I have talked about this before, but it is a very important topic.

Why is this? Why are reviews so stressful for the employee and even the reviewer? Does it have to be? Couldn't the entire process be much less stressful? Perhaps even enjoyable?

Without a doubt.

Communication between leaders and their employees is essential to the success of projects, the professional relationship, all individuals involved, and the companies themselves. Communication breakdowns affect everyone involved. Esprit-de-corps decreases, productivity decreases, and the all important employee satisfaction decreases. Leaders need to deliver timely, accurate, and effective feedback to employees all year, not just at performance review time, though performance reviews do play an important role in this continuous process.

So why are performance reviews so disliked?

Most people don’t like to receive constructive criticism, and most people don’t like to give it. The manager and the employee need to set aside at least an hour to discuss the good and the bad of the year. For the manager, especially the new manager, it can be one of their most daunting tasks. For the employee, they stress about their performance, and the salary/bonus numbers that may also come with it.

How do you make performance reviews less disliked?

You need to tackle the problems of performance reviews, and work hard to alleviate them.

Problem 1 - The surprise review

A common problem, and a huge cause of stress for employees. Basically, the manager doesn’t schedule the review in advance, leaving the employee to stress about it—in some cases the employee doesn’t even know a review is due. Then WHAM, one day when the manager has 20 minutes, the manager pulls the employee into a surprise review. Or, even if the review is scheduled, the employee doesn't know what to expect, and not sure of the feedback he will receive.

When this happens, the employee walks into a big, stressful unknown. But it’s an "easy" one to solve.

Managers need to get into the habit of keeping their employees informed all year long of progress towards their goals, and how well they are performing their jobs.

If they are doing a great job, tell them so! Throughout the year, you want to praise and reward good performance to reinforce it and encourage more of the same. And if the performance isn't so good, you need to let your employee know as soon you realize this. It’s only fair to the employee. And it’s good for you because it allows them to correct their behavior as soon as possible. It’s the manager's job to mentor them, ensuring they have the tools, training, and opportunity to succeed. It will also be easier on you, the manager, as you can work with the employee to improve the performance before it gets to the point where it is critical.

Another key benefit of keeping your employees informed of their performance throughout the year is that you can focus more on their goals and career planning during the review, after all, they already know how they did. It will be an opportunity to build relationships and discuss the future.

Problem 2 - The last 2 month review
Annual reviews are, well, annual. They need to encompass the whole year, or at least the time since the last review (if you do twice yearly reviews). It is often easy to focus on only the last few months since that’s what you remember best. But that’s unfair to your employees.

One trick I use is to keep notes on all the people I work with throughout the year. Not because I‘m keeping track of them, but because it lets me remember the significant and not so significant events throughout the year. This helps the manager or leader when it comes time to write the review and makes the review more honest and objective.

It’s easier to remember the bad than the good, and it is easy to focus on just the bad to the detriment of the good. Keeping notes will help alleviate this. It would not be fair to the employee who had a stellar year, but made a mistake in the last month of the review cycle to focus on just that mistake.

Another benefit of keeping notes throughout the year is to ensure "data integrity" as you won't be struggling to remember the facts. Of course when in doubt, double-check your facts.

Problem 3 - The unprepared manager
Nothing is worse for an employee to see the manager "wing it" during the review. Perhaps they are writing it front of the employee during the review, or are not prepared to discuss goals and career aspirations. Managers and leaders need to spend time ahead of time to write the reviews, and think about how they will conduct the review. So start the process early, and schedule lots of time for the actual review. Also, don't schedule them back to back, it’s hard to predict the end times and you don't want to cut it short just for the sake of your three o'clock.

Problem 4 - The one sided conversation
A review should be a two-way conversation. In fact, it should be a 80/20 conversation. (Isn't it great how often the 80/20 rule comes up?) where the employee speaks 80% of the time. After all, it is about them. Provide your feedback and let the employee do the talking. Most of the review should focus on employee reactions and takeaways from the discussion. Don't talk just to fill the awkward silence.

Problem 5 - The inaccurate performance review
It goes without saying to be honest and fair in the review, and not to play favourites. Everyone knows this. That being said, also don't wimp out! Don't gloss over the negatives in order to maintain relationships, or because it’s too hard. Addressing real problems, especially the ones about employees, is one of the hardest parts of a manager's job. It’s an important part of being a good leader.


Matt Hately said...

Great article! I think at one point or another I've been guilty of each of these. It's great to have a refresher before we head into review season.

Jason Mawdsley said...

Thanks Matt!

Agreed, it is easy to make these mistakes, refreshers are always good :)

John said...

Hi Jason,

Enjoyed your article - makes a lot of sense - always good to get perspective like this for our business !


Sargsyan Tigran said...

Fantastic article!

I guess the most important point of the review (at least for me) is the advices that my leader can give. I think there is some situations when employee doesn't understand what is expected from him and how should he do that.

I completely agree about "Point 4", I guess it will be very disappointing to hear how your leader is saying "Mmm... so ... ok .. so what we are going to talk about? ... oh yes..." during the review.

maeis said...

Great article!
the interesting part for me was your way of keeping the notes about each employee for his/her performance throughout the year. This assures employees that they will be reviewed fairly which is very important.

Alexander Nazarian said...

Hi Jason... Thanks for this great article:)
i think that when the manager first concentrates on positive points of the employee and then talks about the improvement areas is better, because the employee may get disappointed and confused for the next few minutes(native human reaction i think) and may leave bad impression.what do you think ?

Lusine Karapetyan said...

Useful article.
The part that I liked mostly was the idea that the manager needs to keep an employee informed regularly. This way both will benefit: the manager will have the possibility of getting the maximum effort from an employee, whereas an employee will be sure that he/she is doing the right thing which will give him/her more confidence.

Jason Mawdsley said...

Hi Alex,

Yes one valid way to handle reviews is to talk about the good points first, then follow up with the areas to be improved. But, don't forget to re-emphasize the positive aspects of the year at the end, it will help people leave the review motivated! :)

Personally, I like to get the person I am reviewing doing most of the talking, get them to talk about what they did well, and what they think they need to improve upon. I will then add any points I think were missed. To be honest, it is usually not very many, people tend to be very much aware of their strengths and weaknesses.

Jason Mawdsley said...

Lusine you are exactly right. It is good leadership.

Jason Mawdsley said...

Maeis it's a trick I learned in the military.