Do you remember what you were doing one year ago today? Were you having a good week? Which projects were you working on?
Unless you have the memory of Sherlock Holmes, you probably have a tough time recalling every detail. But that’s exactly what we ask employees and managers to do when we use an annual performance review system.
Hold on—I thought we were moving into an era of modern performance management. Out with the annual reviews and in with the frequent feedback, right? Actually, a recent SHRM report shows that 71% of organizations still use an annual review system.
At the same time, HR professionals are recognizing the inherent flaws in this type of performance management. According to that same report, 54% of HR representatives doubt the accuracy of annual performance reviews. And for good reason—if you depend solely on employees and managers recalling things that happened months earlier, you aren’t going to see the results you want.
Perhaps you aren’t ready to completely overhaul your organization’s annual performance review system today. That doesn’t mean you have to suffer through poor results and inaccurate data. We have a few ideas for making every performance review more accurate and meaningful, whether it happens once a year or once a month.
1. Supplement with frequent feedback
Just because you only have a formal sit-down between managers and employees once a year doesn’t mean that’s the only time they can exchange feedback.
You can encourage everyone in your organization to offer a constant flow of feedback. While giving and receiving criticism (or even giving and receiving compliments) might be uncomfortable for some, if you create a culture of frequent feedback, such habits will become second nature for employees and managers alike. You know what they say: Practice makes perfect.
Feedback, both negative and positive, is most relevant and meaningful in the moment. When too much time passes between an incident and the feedback surrounding it, then criticism can feel spiteful and praise contrived. You can imagine, then, how employees feel when an entire year has passed. Feedback in the moment, however, gives employees a chance to understand, discuss, and improve. That’s probably why 76% of HR professionals believe that ongoing feedback can make annual assessments more accurate.
2. Integrate peer feedback
Another way to ensure accuracy in performance reviews is to take the 360-degree approach. Consider this idea in the context of eyesight. Try staring at the stapler on your desk. Your two eyes take in slightly different images, and your brain combines them to create stereoscopic vision, or what you perceive as “3D.” You can reach out and grab the stapler easily enough. However, when you cover one eye, your vision becomes flat and it’s difficult to determine the depth of the stapler. It’s not as easy to grab.
Likewise, when you ask for only a single view of an individual’s performance, you’re limiting your vision. Integrate both manager feedback and peer feedback, and you’ll get a more complete picture of an employee’s performance.
As an added bonus, peer feedback may also encourage employees to improve their performance more than any other incentive. One study at a hospital in California examined the impact of peer influence and monetary incentives on employees’ performance during a 90-day hand hygiene initiative:
“On average, bonus-eligible hospital employees improved their performance during the 90 days of the initiative, but then progressively trailed back to levels of performance as low or worse than prior to the initiative. Physicians [who were ineligible for bonuses but were exposed to peer encouragement]...demonstrated a slower improvement relative to the other employees, during the 90 days, but maintained a significantly improved hand hygiene performance over the remainder of my observation period.”
In other words, those who had no incentive other than the praise and appreciation of their peers made more permanent improvements than those who had to step up their performance for a limited-time monetary bonus. If peer feedback is new at your company, consider providing employees with a list of performance review phrases to use as a guide.
By incorporating peer feedback into your performance review process, you can get a more accurate reading on employees’ performance while motivating them to make long-lasting, meaningful changes in their behavior.
3. Ask the right questions
Of course, even if you asked everyone in the company for a performance assessment of the same employee, you still wouldn’t reach 100% accuracy. That’s the nature of working with human beings—they are subjective!
In fact, the feedback we give is often based on how we view our own behaviors rather than how we view others’ performance. For example, if I say that Miguel is a good listener, that probably means he is a better listener than I am. Conversely, if I say that Nikki isn’t a strong writer, that means I believe she’s not a skilled as I am.
When you work with people (which almost everyone does), the measuring sticks are always changing.
That’s why asking the right questions is so important. Questions that drill down to the root of employee performance can help you cut through the weeds of subjectivity. Instead of asking managers to rate abstract performance metrics on a numbered scale (listening, collaboration, etc.), use open-ended questions with room for explanation. What is one thing this employee does well? What is one thing upon which this employee could improve? Taking this approach can help tease out what matters most from a performance review.
4. Address biases
While we’re on the topic of subjectivity, we need to address bias. Whether it’s a manager’s personal, unconscious biases or circumstantial biases that are skewing performance review results, the best way to fix the problem is to face it head on.
There is a whole pile of research on unconscious bias; we all hold biases in our guts, and those are what we lean on in stressful situations (like the ones we may face at work). It’s tough to shake such beliefs, but we can start to address them by consciously deciding to do the work. Make a concerted effort to diversify teams, and encourage managers and coworkers to build positive relationships with those from different backgrounds.
Personal biases aside, performance reviews may also suffer from circumstantial effects. Sharlyn Lauby, an HR consultant, lists examples of these biases, including contrast, halo, leniency, and more. If a manager compares one employee to another, favors one employee especially, or gets burned out by too many reviews at one time, you can be sure that those reviews won’t be very accurate.
Take a close look at your review process to make sure you allow managers the time and guidelines they need to evaluate each employee fairly.
5. Follow up
Once you’ve laid the foundation for more accurate performance reviews, you need to make sure they stay that way. And that means knowing what to do with the performance review data after the assessment is over.
Encourage managers and employees to set goals together. This gives each party something to measure and follow up on during the next review period. Plus, when employees are invested personally in the goals they set, they are more likely to achieve them.
However, it’s not enough to hold employees to improving their performance. It’s vital to receive and act on employee feedback for the organization. According to our own research, only 38% of non-management and non-HR employees are comfortable being honest with their feedback during performance reviews. Are your employees worried about being ignored or even punished for providing feedback?
You must create a safe, respectful space for employees to make suggestions for improvement, both to their managers and to the organization. And then you need to walk the walk.
Consider their feedback, and make changes based upon it. Sure, you can’t act on every piece of employee feedback; but if you hear the same suggestions again and again, it might be time for an adjustment. Employees will see that your organization listens, and they will be more likely to offer honest, accurate feedback during the next round of reviews.
No matter how your organization’s performance management system is structured, you can take small steps now toward more accurate assessments. Not only will this improve the experience for managers and employees, but it will also give you more meaningful data to use in engagement, retention, and performance efforts. Try these tips today, and get more out of performance reviews.
If you're ready to take the next step toward building an extraordinary organizational culture, check out our latest guide: