Four Steps to Better Performance Reviews
Direct reports-people who need direction and leadership-rely on their leaders to give them feedback and mentoring, not just management and evaluations. However, these people who most need their boss’s help frequently lack the guidance that would enable them move to the next levels of success-theirs, their team’s and the company’s. Too often leaders are not prepared or trained to conduct an appraisal that stretches performance and ensures their direct reports’ development. Instead, the appraisals become confrontational and judgmental; goals are not clear; neither person is prepared; and the discussion occurs when it’s too late to do anything about the problem. Today’s organizations demand more from their leaders. Therefore, a well thought out performance appraisal system, clear expectations, reviews that inspire, and action plans are critical to the individual’s and organization’s success.
Create the System
The advantages of an effective performance appraisal system are many: better performance, improved relationships, coordination of personal goals and business objectives, identification of high potential individuals, and justification for monetary rewards. However, much depends on the efforts that go into crafting the system.
The first step is to have clearly defined job descriptions that specify the tasks, functions, and responsibilities of each job. What does it take to do this job right? What are the success indicators? What are the derailers? Answers to these questions form the foundation for deciding behavior-based competencies for the particular job, the area of the organization, or the company as a whole.
Many organizations start by defining roles and responsibilities as they relate to the level the person holds in the organization: executive, manager, or employee. Other companies choose competencies that address certain areas of the organization, such as accounting, manufacturing, human resources, or sales. Once decision makers decide how to measure performance, they are ready to identify specific behaviors that demonstrate competency in relevant areas and to choose the scale that makes sense for them.
Usually competencies relate to one of four areas: ability to get results, capacity to form relationships, decision making, and leadership. Specifically defined competencies might also include business acumen, customer focus, coaching, integrity, vision, communication, teamwork, flexibility, technical skills, and innovation. Once the company decides on 8-10 competencies, the next step is to establish the rating scale.
The most basic scale is three points: exceeds expectations, meets expectations, or fails to meet expectations. However, a four-point scale gives more options for evaluation and forces the evaluator to avoid a middle of the road review.
Once the criteria for evaluation have been determined, the decision makers need to set the timeline. In short, the year begins with goal setting, continues with ongoing feedback, and concludes with the end of the year evaluation that is often tied to raises and bonuses. This sort of schedule avoids surprises and the "once a year" mentality that dooms most performance appraisal systems. Also, the periodic reviews give the employee a chance to take corrective action when there are still opportunities to make a difference.
In general, four meetings per year work well. The first is a goal setting meeting; the second addressees progress on the goals; the third surfaces any problems that might interfere with the end of the year appraisal; and the final one is a formality that ties the progress to rewards. This does not imply that ongoing feedback should not take place between meetings. On the contrary, the four meeting format is the minimum number of meetings the boss should have with the direct report. Even though bosses often resist adding to the number of formal meetings per year, they soon learn that the increase in productivity and morale among their direct reports more than compensates for the extra time they commit to the process.
Clarify Expectations
The purpose of goal setting is to tie individual performance to the organization’s mission, vision, and values and to link short-term objectives to long-term targets. People are most committed to goals they’ve helped construct. When the boss and the direct report work together to clarify these goals, the direct report is more likely to commit to rather than comply with the efforts that will drive success. Well written goals serve a variety of purposes: they create opportunities for objective, fair dialogue; they define the "score card" that will be used to determine rewards; they energize and motivate; and they focus efforts.
By now almost everyone has learned about SMART goals, objectives that are specific, measurable, attainable, relevant, and timely. Specific and measurable mean the goal is concrete, clear, and descriptive to the point that results can be measured. For instance, giving feedback that a direct report "needs to be more positive and have a better attitude" is not helpful. Identifying the particular improved behaviors is: greeting others, smiling, saying "thank you," and giving praise.
"Attainable" is often a source of disagreement between the appraiser and employee. The boss’s perception of results that are achievable and realistic might differ from those of the direct report. Here are some questions for the boss to consider:
