Year end performance reviews: Dos, don’ts and do-betters

With year end here and quickly winding down, your organization is likely undertaking its annual performance review process. Or, perhaps you conduct your reviews on a fiscal basis and are just getting started laying the groundwork. In either case, with an entire calendar year’s worth of data to draw from, now is a good time to think about what your organization accomplished in 2014 and how you should evaluate the employees who helped make it happen.

Performance reviews can be a complex process. But they can also be relatively simple in that there are things you should always do, other things you should never do and still other things you could always do better. Let’s take a look at a few items from each of these three categories.

Dos: Must-have parts of the process

If you’ve ever bought or received a wedding ring, or even just watched a TV commercial about doing so, you’re probably familiar with the “four C’s” of diamonds: color, clarity, cut and carat weight. When it comes to the “dos” of performance reviews, there are three C’s:

Clear. Just like a diamond, your organization’s annual strategic objectives must be clear. Every employee’s individual goals must unambiguously drive your organizational objectives while being reasonably attainable.

Each staff member’s objectives should describe what you’d like him or her to accomplish and the desired end result. For example, a customer service rep’s goal might be to answer phone calls and e-mails within 24 hours. You can track this objective in call logs, so his or her performance evaluation can include an open discussion — supported with data — regarding whether the goal was met.

Concise. Do you set too many organizational goals? Do you require or allow employees to set too many individual objectives? Goals need to be concise in number and in language. Limit the number of goals — both organizational and individual — so staff members can properly execute them and you can demonstrably improve performance.

Otherwise, employees may give up on objectives altogether — leading to many difficult, conflict-ridden reviews. Or staff may choose to focus on only a few goals, which may or may not be the ones most critical to your organization’s success.

Comprehensible. Do your employees fully understand and support your performance evaluation process? Are they ready for the preparatory phase(s) of the review and do they really understand what they’ve been told after meeting with their supervisors? If employees are on board with the goal-setting process and fully informed of the outcomes, they’re more likely to support the process.

Sometimes, as organizations try to improve their performance review process over many years, they inadvertently make them more complex and confusing. It’s critical to ensure that you have employee buy-in regarding how your performance reviews work. If you’re unsure of how your staff feels about the process, follow up your next round of reviews with a concise poll to get some insights.

Don’ts: Approaches and behaviors to avoid

Naturally, there are many things you shouldn’t do as part of your process. But let’s narrow our focus to a couple of common don’ts, namely:

No surprises! This is what some might consider the “holy grail” of performance review no-nos. Among the worst things an employer can do is sit an employee down for a review and start clobbering him or her with unexpected criticisms. That’s not to say a supervisor can’t bring up areas for improvement. But major shortcomings in job performance need to be pointed out and addressed well before year end (or whenever the review is taking place).

For this reason, ongoing performance management is highly recommended. It works more like a conversation, allowing supervisors to play the role of coach throughout the year in providing regular support and feedback. Typically, informal performance evaluation meetings should take place quarterly with the final, actual job review occurring at a specified end point. But the actual frequency may vary given the size of your organization and the nature of its work.

No sugarcoating! At the other end of the spectrum is supervisors’ tendency to avoid negative job reviews to avoid conflict and lower or diminish the risk of losing a well-liked staff member. No doubt about it: Employee retention is important. But an organization can put its own success at risk by sparing employees’ hurt feelings.

How can you prevent sugarcoating? The only way to really ensure it’s not happening is to “review the reviews.” A big part of developing leadership at any organization is having upper management double-check the efficacy of the middle managers conducting performance evaluations.

Watch out for common missteps such as “haloing,” when a manager lets one employee trait influence his or her rating on all other factors. Often this is coupled with “recency,” whereby a supervisor lets a recent event influence the entirety of an employee’s review.

Another typical problem is “centralizing,” when a supervisor doesn’t give high or low ratings but sticks stubbornly in the middle. This may not seem like sugarcoating. But it can be if the staff member in question is underperforming, as centralizing tends to elevate poor performance to a middling level.

Do-Betters: Asking the right questions

Performance reviews should always be an evolving, malleable process. Then again, as mentioned, it’s important not to change the process too much, or you’ll risk confusing and frustrating your employees. (In some extreme cases, an organization may need to completely overhaul its performance review system. But these are relatively rare.) Striking the right balance can be challenging. Here are some simple questions to incorporate into the process to balance things out:

“What does this person do particularly well?” After carefully reading over a staff member’s evaluation materials, a supervisor might ask this. If nothing comes to mind, maybe it’s time to really start finding ways to draw out that person’s strengths. If, on the other hand, a clear answer (or two) appears, the manager should look for ways to more directly apply that strength to the employee’s future goals.

“What do I wish this employee would do more often?” On the flip side of that coin, supervisors should explore more specific ways to determine how each staff member could improve. A good way to make this determination is to ask this question. You might also ask, “What do I wish this staff member would do less often?” Specifics are the key to a good review.

“So what did you accomplish next year?” Although this may sound like a contradiction or even nonsensical, it can be helpful to encourage your managers to ask staff members about the future during job reviews. That is, prompt each employee to look ahead to the end of next year and imagine that he or she has had a remarkably successful year. Now ask them to list all of their imagined accomplishments. The results can be remarkably insightful about what employees want to do, as well as where their strengths and passions lie.

Worth the effort

Performance reviews represent a significant investment in time, money and energy for every organization. But, if you’re doing it right, it’s an investment well worth making. Studies show that effective goal management in particular is strongly correlated with positive business outcomes. And your review process determines whether your employees are setting goals that “cascade” from your organizational objectives and, most important, whether they’re accomplishing these goals.

What’s more, one size does not fit all. Every organization needs a review process designed to suit its size, culture and distinctive characteristics. Performance Dimensions Group has been helping create custom solutions for performance management for 15 years. We stand ready to work with you to create and refine a system that everyone on your staff will understand, use and appreciate. Please contact us!