Performance Reviews, Part 2: What Managers Should Know

This post first appeared on the Five  O’Clock Club’s website
In Part 1, I summarized how performance reviews can help individuals and the organization as a whole. In this blog entry, I’ll share with you some of the key details that can help you to conduct the actual review and get the most out of the process.

When should the performance review process start?

Reviews are most effective when the process begins right after the prior year’s review.  Starting 12 months prior means aligning with your employees throughout the year on how they are being measured.  Not only is this fairer to the employee (i.e. no surprises), but you are more likely to get the performance results you want.

But how can we start 12 months prior when organizational priorities change frequently?

Yes, priorities change, but there’s a huge benefit to putting a stake in the ground wherever you are, so you can get some traction around measurement and organizational goal alignment. That said, there’s got to be room for reasonable movement of the goal posts.  And when priorities inevitably do change, communication about how that impacts performance goals needs to happen.

What kind of goals should be set?

Start with your own goals as a manager, and ensure that your employee’s goals directly support yours (as your goals should support your manager’s).  You and your employee should agree on specific, measurable goals.  “Improve the efficiency of marketing campaigns” is not specific enough— were they improved a little or a lot, and was the improvement above or below expectations?  Much better is “Shorten marketing campaign processing time by 20%”.

How do I rate performance?

Most organizations use a numerical scale to measure performance.  Having a numerical scale helps both the employee and the organization understand the strengths and weaknesses of its most important asset, its employees.  The scores ideally should fit together, so that your score as a manager is reflected in the score average of the people working for you.

A scale of 1 to 5 is common, where 1 is “exceptional”, 5 means an “exit strategy” for the employee, and 3 is “met expectations”.  The ratings for individual goals and behaviors roll up into an overall employee score.  In the “goals” section of the review, each goal should be rated, and weighted based on an organizational determination of how important that type of goal is.  For example, goals might be weighted differently based on whether they are customer-focused or employee-focused.  Similarly, each component of the “behaviors” portion of the review (how goals were achieved) should be rated as well.

How do I conduct the actual review?

First, ask the employee to write their own review, including the numerical scores, a couple of weeks before the actual review will occur.  This way, you are encouraging the employee to engage in their development and performance achievement– so it’s not just the manager “telling” the employee.

At the same time, ask the employee for three co-workers to be “references”.  Get these names from your subordinate so you preemptively address concerns about negative bias. I’ve seen many situations where making the effort to get this feedback has paid off in a substantially revised (for better or for worse!) perception of performance.

Then, set up a separate time, at least an hour, to go over the review.  Make sure you are in a room with a door and you are not disturbed— that is, communicate how seriously you take this, and respect your employee’s privacy!

What should I bring up in the review?

Go over each of the goals step-by-step.  Always strive to give specific examples to illustrate your point of view.  Don’t say “You are annoying others in the department”.  Instead, say “I heard from participants in that meeting about how you interrupted several times to bring up off-topic subjects.”  Specifics enable people to see the real issue, and reduce the likelihood that your observation will be perceived as unfairly biased.  Make sure you use examples to both reinforce good performance and address sub-par issues.

Don’t bring up salary—that should be in a separate conversation.  Having the two in one conversation could hurt delivery of the message on performance and goals.

Aren’t reviews too subjective or biased to be of any use?

There’s always the potential for bias in the review.  Following the principles described in this blog post, as well as Part 1, can go a long way to reduce that possibility.  Other things can be done on an organization-wide basis, including 1) education on how to be alert to potential sources of bias in order to avert them, and 2) analysis of systemic problems within departments to identify problems, for example everyone getting top reviews or poor reviews.  Managers should work closely with HR in conducting this type of education and analysis, as well as ensuring that performance reviews meet legal requirements.

A good performance review process can have a huge benefit for both individuals and the organization.  I worked with a client who was having trouble with an employee on her staff.  He was hired with high expectations, but was not meeting them.  This particular client worked in a division that believed in a rigorous performance review process.

The review process forced all parties to focus on what the problem was.  Where one organization might have said “it’s just not working out” and let the employee go, this leader was able to rely on the review process to take a far more productive approach.

In this case, the review process uncovered the employee’s weakness with data analysis, but strength in more creative areas.  The result was the employee shifted to a different department within the same division, and became a star in the organization!