There is no denying that performance reviews incite fear and loathing on both the part of employees and employers. This doesn’t have to be the case. Nor should it be.
Despite the discourse advocating for the abandonment of formal performance reviews altogether, The Workplace believes that formal performance reviews can serve their purpose for employers (in terms of employee productivity and engagement) and for employees (in terms of learning and development and career development) if adopted as part of a wider 5 step strategy.
1 Define expectations – While we don’t profess to be psychologists or social scientists, there is an abundance of academic literature which suggests that employees need to understand what is expected of them in order to channel their attention and focus and to drive their motivation.
This means that the first step in the performance management system (and an ongoing step) is to clearly articulate an employee’s duties, responsibilities (generally by way of a detailed job description) and to involve them in the development of their performance goals. This paints the picture for the employee about where they are heading and what is expected of them and will assist their manager when it comes to the assessment of their performance – which leads to the second step.
2 Enable managers – Unfortunately, many managers are to blame for employee resentment towards performance reviews. If your line managers receive specialised training in only one area, make sure it is performance management, as they are the ones on the front line and it can be costly (both from a legal and employee turnover perspective) if they take the wrong approach.
Research suggests that simple techniques such as open-ended questions, being specific, not using threatening language, and a two-way employee coaching approach drives results that negative one-sided criticism certainly does not. It’s not rocket science, but managers can’t be expected to know everything. It’s an employer’s job to make sure they are fully equipped to carry out their role.
3 Continuous, real-time feedback – Traditionally, performance reviews focus on past performance and are viewed by both employers and employees as nothing more than a bureaucratic HR exercise. However, continuous, real-time feedback is much more productive (particularly when coupled with the other steps).
4 Celebrate success – One part of the continuous, real-time feedback is the positive recognition that employees should be given when they have performed exceptionally. There is no doubt that employees who are recognised feel happier and are more productive and engaged and hence less likely to leave the business. Recognition loses its luster when its overdue or infrequent and therefore needs to occur in real-time and on an ongoing, even informal basis. The power of a simple “thank you” is truly amazing.
5 Formal follow-up – This last step brings us back to where we began. Formal annual performance reviews do have a place but need to structured in such a way that takes into account all of the aforementioned steps and which is tied in with the employee’s career development goals and any learning and development areas.
When it can cost a business up to 150% of an exiting employee’s salary to replace them, it makes sense to get performance management right. When done correctly, performance management is a very powerful and effective workplace tool.
If your business needs assistance with any aspect of performance management, contact THE WORKPLACE.
The copyright in this blog is owned by The Workplace – Employment Lawyers Pty Ltd. The content is general information only and is not intended to constitute, or be relied upon as, legal advice. The use of this blog by any person or company does not create any solicitor-client relationship between the person or company and The Workplace – Employment Lawyers Pty Ltd.