It’s the time of year again – many managers and individuals will be thinking about the annual performance reviews right now. Either they are in the process of finishing up last year’s review or setting out to plan the objectives. But let me share with you more about effective performance reviews.

When I talk to my colleagues and friends, I find that I’m not alone. The majority dreads the yearly performance reviews, either as an employee or manager. And the feedback I get is very similar.

Performance reviews often become a source of anxiety for managers and individuals. It does not feel like a natural conversation, and often both parties are nervous going into it, and the employee is often left feeling disappointed or frustrated.

As a manager myself, I always found this time a bit stressful. I felt a high responsibility towards my direct reports to be as fair as possible and provide actually meaningful feedback. I spent hours preparing the ratings, my feedback, development ideas and the conversations. And still, even with preparation, some reviews were just an awful experience for both sides. I often wished that I could just avoid the process altogether. But whether we like it or not, managing performance is an important part of the role of a leader. 

There has been a lot of research in the past decade that suggests that the traditional performance management process is no longer effective and has a negative impact on performance.

Several major companies, like Adobe, Dell, Microsoft, Deloitte, Accenture and PwC, have already stopped their traditional performance review processes years ago to replace it with a system that promotes continues and regular feedback conversations[1].

IN OFFICES ACROSS THE WORLD, FIRMS ARE REPLACING ANNUAL REVIEWS WITH FREQUENT, INFORMAL CHECK-INS BETWEEN MANAGERS AND EMPLOYEES.” [2]

A lot of companies, though, are still holding on to their old system, mostly because they don’t know how else to manage their employees’ performance and adapt their reward system. And to be fair, this is a very complex issue, and a lot of work still needs to be done to find the best solution. Furthermore, I believe that each company has to find its performance management system that works based for its size, structure, processes and business strategy.

I also think that the traditional process can be very valuable for both parties if we provide managers and individuals with more guidance around how to best approach this process.

The aim of this article is not to propose a solution for a new system, but rather to highlight some common issues managers and employees currently face and provide a few tips that can help make the process easier and most importantly valuable for both parties.

1) Lack of training

Performance reviews are difficult. Providing positive feedback is great, but addressing ongoing issues is the problematic part. (Yes, it can be tough.) And because it is so difficult, some managers just avoid it altogether. But this is not the solution. 

A lot of managers are not trained on effective performance management, target setting, reviews and development plans. They have never learned how to translate company targets to an individual’s level. Creating development plans requires creativity, research and lots of conversations with their team to understand their potential and ambitions. Managers are often thrown into the deep end and have to figure out how to provide feedback and motivate the individual to achieve their targets. This can lead to anxiety or insecurity in the manager. These emotions easily transfer to their employees.

Managing value-adding performance reviews require a variety of skills and competencies. The process is definitely not easy. To be effective and drive excellence in performance, every manager should receive training and coaching throughout their career on how to master performance management.

If you are a manager and have not received any training, ask for it or invest in it yourself. There are so many affordable and even free options out there. Look for articles, books and podcasts. Self-development and training are going to pay off. A smooth and valuable performance management plan will make it so much easier for you and your team to achieve excellence.

2) Managers don’t spend enough time on preparation

I have seen managers who either don’t understand the value of thorough preparation or are not willing to invest the time. But when it comes to people management, preparation is key, especially for every performance conversation. You want to set your team up for success from the start.

Take time to understand the company’s and your own objectives fully. Get to know your team. Understand who they are, their ambitions, and what their strengths are.

Then break down the objectives and make them applicable for each employee in your team. Focus on their individual strengths and align the goals accordingly. Not everyone can be excellent across everything. We need to allow for individualisation.

Prepare and brainstorm development opportunities. Each individual must take ownership of their development, but as their manager, you can help them grow in the right direction. Think out of the box. Yes, external training opportunities are fantastic, but there are so many other ways to offer development for your team. Your direct reports will highly appreciate your support.

Prepare your 1:1 meetings, define your intention and make notes of your talking points beforehand, so you feel more assured in your approach.  

3) Performance reviews can be emotionally challenging for everyone

The most important competency for performance management reviews is Emotional intelligence. The ability to manage your own emotions and the emotions of others is highly effective throughout the process.

“For many employees, a face-to-face performance review is the most stressful work conversation they’ll have all year. For managers, the discussion is just as tense.” [3]

Performance is often measured on a fixed scale from 1-5. It can be very disheartening to have your efforts and performance of a full year reduced to one number. Every employee handles these processes differently. Depending on the person, managers face a range of different emotions from apprehension to frustration, to over-confidence.

Trust plays a big part in delivering feedback and managing performance reviews. If the relationship is built on trust, the employee and manager are able to approach the discussions with a growth mindset. 

“We excel only when people who know us and care about us tell us what they experience and what they feel, and in particular when they see something within us, that really works.” [4] 

It is more challenging to accept and welcome feedback when one person’s intentions are unclear. Often our brain responds to critical feedback as a threat and therefore might limit our abilities to react rationally.

It is more challenging to accept and welcome feedback when one person’s intentions are unclear. Often our brain responds to critical feedback as a threat and therefore might limit our abilities to react rationally.

Emotional intelligence enables managers to manage their own emotions, gain confidence and show up calmly. They can build strong relationships with their team and build trust. Furthermore, it then allows the manager to use empathy to understand and manage the emotions of their team members throughout this process.

(Find out more here: Why Every Leader Should Invest In Emotional Intelligence (link to my article)

4) Joint Expectations are not set from the start

A lot of frustration stems from expectations that are not met on both sides. The conversation around expectation setting is one of the most important conversations with your team members to ensure you are on the same page. It is essential to have this conversation at the start of the year or onboarding of a new team member.

But remember that expectation conversations should be held repeatedly throughout the working relationship. The purpose is to clarify and align your expectations and to agree on short, medium- and long-term goals and aspirations (Click here for my pdf guide “Setting expectations with your manager and your direct reports”)

5) Meaningful objective setting is not easy

This is where many challenges originate when the performance review process starts every year. If the targets are not defined adequately between manager and direct report, the whole performance management process is going to fail. Here is what to look out for:

Targets are not individualised

I have often seen that managers take the company targets or their own objectives and copy-paste them into the performance management plan of their subordinates without any changes. If the objectives are not broken down and adjusted to the individual’s role, it will be challenging for the employee to succeed.

Start by sharing the company’s vision and your objectives for the year with your whole team and then break it down.

The objectives have to be meaningful to the role and level of the employee. Furthermore, targets should sit within their circle of control and influence. They also need to be specific as to what is expected.

Another challenge is that performance is often rated on a scale from 1-5. Employees often do not fully understand what is required to achieve a particular rating. In addition, there is this common theme around “not wanting to be average” and rated with a “3”. The truth is, most employees will sit on a rating of “3”. It does not mean, they are mediocre. It means they have fulfilled their role and all targets were met. Amazing. “Congratulations, well done!”. Set the expectations from the start. “If they hit their targets, they are a 3. It’s a goal” [5]

To avoid negative and frustrating discussions, try to define upfront how the rating might translate to the objectives.

Targets are not set in a joint effort

Often managers set the targets and present them to the employee without any room for discussion. However, the employee must be highly involved in defining their objectives. Ideally, they get to make their own suggestions. Help them work out the steps they need to get there and identify the resources and support required from you. This will increase ownership and motivation. It also ensures that the targets and outcome measures are fully understood.

A Team was inherited

Sometimes a leader inherits a new team and has not actually been involved in their target setting in the first place. In this case, it is so crucial that both parties sit together to review the objectives and ensure they are on the same page. Adjust objectives if necessary. If the digital system is “locked” and does not allow changes, just write them down and share with both parties (maybe also with HR, depending on your company’s processes) and adjust the system once possible.

Business Priorities change throughout a 12 months cycle, but the targets stay the same.

A lot happens in 12 months, and priorities and targets often change. Often, objectives are set at the start of the year, maybe looked at once more during the mid-year review, and then only for the “dreaded” performance review 12 months later. “Businesses no longer have clear annual cycles. Projects are short-term and tend to change along the way.” [6] 

It is essential to regularly check-in and update the objectives, if necessary, for each employee to ensure that they truly reflect their role and job requirements.

6) Feedback is always subjective

No matter how hard we try, our feedback and views of our team’s work are always subjective, based on our preferences, experiences and biases.

“Data shows that all kinds of personal quirks and biases, both conscious and not, influence our appraisals of other people.” [7]

Managers need to pay close attention to their biases and stay open to the views and input of their subordinates. It is important to gather feedback from other people as well, to ensure you get a well-formed view.

Ensure you keep in mind that your definition of success and excellence is subjective and only reflects your truth, not “the truth”. Of course, you are in your role as the manager for a reason. And you are expected to guide your team based on your experience and your skills. But be aware that you are managing and measuring them based on your standards, not everyone else’s. If you provide feedback, don’t forget that you obtain it based on your truth. You are only able to share your thoughts, feelings and experiences. This quote sums it up perfectly: “We may not be able to tell him where he stands, but we can tell him where he stands with us.” [8] 

When providing feedback, it is best to focus on behaviours. Try and use the start, stop, or continue framework. “What is the employee doing now that is not working? What are they doing that is highly effective? What actions should they adopt to be more so?” [9] And make sure that you always give specific examples of the situation. There is nothing worse than vague or general feedback. Make it count.

7) Feedback often focusses on “weaknesses.”

We live in a world where we are always measured and judged base on our weaknesses. It starts in school and continues throughout our education and career path. We are told what to “fix” to achieve excellence. But excellence looks different for everyone. We all have unique talents that allow us to create our own version of excellence. 

“OUR GREATEST ROOM FOR OVERALL PERSONAL IMPROVEMENT ISN’T WHERE WE’RE WEAKEST, BUT WHERE WE’RE STRONGEST.”

Focussing on individuals’ “weaknesses” does not enable learning and growth; it impairs it. Research by Gallup has shown that “people who have the opportunity to use their strengths are six times as likely to be engaged in their jobs.” [10] 

Gallup’s research also showed that people who learn to use their strengths every day have 7.8% greater productivity.[11] 

Of course, we need to manage and become aware of our “shortcomings” so that they don’t hold us back. But the truth is that not everyone can be good across everything. And we need to allow for individualised excellence profiles and align these to the strengths of the individual. 

Try to focus on the strengths of your team members, help them to improve and excel in those areas. Keep it positive. Ask them about their achievements and what they are proud of. Maybe offer a strengths assessment and explore together how they can best use their strengths in their work every day. (Read more on strengths assessment and development here: How to leverage your strengths and unleash your unique superpowers)

“WHAT WILL HAPPEN WHEN WE THINK ABOUT WHAT IS RIGHT WITH PEOPLE RATHER THAN FIXATING ON WHAT IS WRONG WITH THEM?”

I love this quote from Donald O. Clifton, Ph.D.

8) Performance discussions are treated as a one-off event 

Have regular 1:1 meetings

Don’t just wait for the performance/ mid-year review to talk to your team members about their objectives. “Research into the practices of the best team leaders reveals that they conduct regular check-ins with each team member about near-term work.” [12] 

Regular short 1:1 meetings (ideally weekly) with your team members allow leaders to set expectations for the next weeks, support with challenges, coach their team members and get an exceptional understanding of the progress on critical projects. These regular check-ins allow both sides to be clear on expectations and to be fully informed of changing priorities. The vital thing to note here is that this does not mean micro-management of your team members, but the opportunity for regular exchange and support if needed. Make sure that you take some short notes after each meeting. These notes will help to jog your memory at the end of the year.

Another great advantage is that regular 1:1s will also ensure that performance review meetings mid-year or end-of-year are much easier to manage. There won’t be any surprises. If a leader and team member have had regular interactions throughout the year, they most likely have formed a healthy relationship, and they know precisely what the individual has achieved and where priorities changed throughout the year. The performance review becomes more of a summary and final closeout of the year opposed to an awkward, emotionally charged conversation, where each person tries to look for evidence of good or bad performance with the risk to leave both parties frustrated.

Pay attention to small wins and call it out

Furthermore, make sure you create the habit of calling out successes and excellent behaviour on the spot. If an employee has achieved a new milestone, won a new client, had a great idea, point it out right there and then. Basically, “whenever you see one of your people do something that worked for you, that rocked your world just a little, stop for a minute and highlight it.” [13] 

By highlighting this regularly, you are sharing what excellence looks like for them. This way, they know what to focus on, and you enable them to thrive in their role.

Performance Management can be a daunting and vulnerable experience, but it does not have to be!

Many managers and employees have sleepless nights leading up to it. If it is not managed correctly, it might harm your team’s performance, become a waste of time and demotivate. But with a bit of time, investment, coaching, patience and practice, every manager can gain skills to facilitate an effective process and make this tool work for them and their team.

Final thoughts

Remember, the most important thing is to build honest and trusting relationships with your team members. Ensure you check in regularly and invest in your team’s strengths.

I ended up enjoying the performance conversations. Maybe you will too.

If you have found this article helpful, I would love to hear from you. What are you going to take back to your work and implement? Let me know in the comments below. Of course if you need this information (and more) on hand, download my FREE guide for performance reviews!

effective performance reviews

Sources:

 [1] Cappelli, P., Tavis, A.: The Performance Management Revolution, Harvard Business Review, October 2016 Issue

[2] Cappelli, P., Tavis, A.: The Performance Management Revolution, Harvard Business Review, October 2016 Issue

[3] Knight, R.: Delivering an Effective Performance Review, Harvard Business Review, November 3, 2011

[4] Buckingham, M., Goodall, A.: The Feedback Fallacy, Harvard Business Review, March–April 2019 Issue

[5] Knight, R.: Delivering an Effective Performance Review, Harvard Business Review, November 3, 2011

[6] Cappelli, P., Tavis, A.: The Performance Management Revolution, Harvard Business Review, October 2016 Issue

[7] Vara, V.: the push against performance reviews, The New Yorker, www.newyorker.com, 24/07/2015, accessed on 27/01/2020

[8] Buckingham, M., Goodall, A.: The Feedback Fallacy, Harvard Business Review, March–April 2019 Issue

[9] Knight, R.: Delivering an Effective Performance Review, Harvard Business Review, November 3, 2011

[10] Rath, T. (2007). StrengthsFinder 2.0. New York: Gallup Press

[11] Sorenson, S.: How Employees’ Strengths Make Your Company Stronger, Gallup Business Journal, February 20, 2014, www.gallup.com

[12] Buckingham, M., Goodall, A.: Reinventing Performance Management, Harvard Business Review, April 2015 Issue

[13] Buckingham, M., Goodall, A.: The Feedback Fallacy, Harvard Business Review, March–April 2019 Issue