What percentage of employees do you think strongly agreed that performance reviews inspire them to improve in a recent Gallup poll?
No, the results were even more disappointing: just 14% feel motivated to improve as a result of appraisals.
Of course, it's no secret that employee performance evaluations have limited success in many organisations. As we've reported before, 95% of managers are unhappy with their current appraisal process, while 90% of HR professionals see these evaluations as inaccurate.
So, what can we do to ensure our organisations carry out effective performance reviews? Here are the 6 key things you need to include in any appraisal.
- The basics
This may be obvious, but it's also important. Your performance review form needs the basic information including the name, ID, and role title of the employee, the name and title of their reviewer, their department, and the review period covered. Consistency is key in the performance review process so including all these details every time is essential.
It's also useful to keep the exact responsibilities and competencies of a role in mind during evaluations, so a description of the job itself is useful on your performance review template. This way, it's clear if an employee is failing to meet the expectations of the role or is going above and beyond in their job.
Tired of filling out the details every time? Fortunately, if you use performance management software, you can use configurable performance review templates that already include all this essential information.
- Recognition of achievements
Although people often think of performance reviews as an opportunity to critique employee performance and create plans for improvement, they're equally an opportunity to celebrate successes. An effective performance review will acknowledge the positives as well as the areas for improvement for each employee.
As we know, it's essential to recognise employees' achievements and major milestones at the time, but reiterating this praise in a performance review can also be important. The performance review is a formal opportunity to record these career successes, making employees feel seen and appreciated. Moreover, this is especially useful if the recognition is accompanied by financial reward like a bonus or as part of a salary review.
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- Constructive feedback
Sadly, it can't all be positives in performance reviews. It's essential that all feedback given in performance reviews is constructive. This type of feedback gently encourages employees toward improvement instead of making harsh judgements or negative comments. In the context of a performance review, constructive criticism is a key way to supportively and positively guide employees towards changes.
While most people naturally try to give constructive feedback, getting it right can be tricky, especially if the employee's performance has been disappointing. It's essential that feedback focuses on the employee's actions and behaviours, such as attendance rate, rather than their personality or character as a whole. Failing to do this can lead to the employee getting defensive or causing the relationship between manager and employee to be damaged.
Let's look at some examples of performance review feedback where some are constructive and the others are not.
Non-constructive feedback examples
'Your time management has been disappointing in the last quarter, with two major projects being started late and therefore missing key deadlines. Failing to prioritise tasks effectively in the early stages of the project disrupted the workflows of your coworkers and led to the deadlines being missed. This is not good enough; your time management skills need to improve.'
'Your attendance and punctuality have been poor since you started working at this company -- do you even want to be here? You need to show up on time or we will be forced to take disciplinary action.'
'Compared to your team members, your creativity and problem-solving skills have been lacking. You're limiting the effectiveness of your team.'
'When working remotely, you fail to respond to emails and instant messages. This leaves the rest of the team unsure whether you have completed the work and causes confusion. Your communication urgently needs improvement.'
Constructive feedback examples
'While in Q3 and Q4 of last year you showed good time management skills and always started projects on time, I notice that this has slipped in Q1. The two projects you worked on in this quarter were of high quality once finished but they were late to be completed and this led to a damaged relationship with a client. Moving forward, it's important that we work together to improve your time management skills. We will have a meeting to discuss how to prioritise tasks to ensure that projects kick off on time, as well as regular check-ins throughout the coming months to ensure that you have the support you need to manage time more effectively.'
'Attendance and punctuality are important in this organisation and we appreciate it when you show up on time. I've noticed that you tend to arrive late to the morning meetings on Mondays and Tuesdays -- is there a personal reason for this, and if so can we discuss a way to resolve this? The morning meetings are an important way to start the day on a positive and productive note, so please let me know how I can support you to always be there on time.'
'You are a methodical worker who shines when sticking to routines and completing tasks in a logical way -- you can always be relied on to carry out your work on time. To take your work to the next level it would be great to see you thinking outside the box and applying some creative problem-solving to tasks. I know from the latest project that you often have innovative ideas even if you don't always share them with the team; in Q1 I think you would benefit from some coaching to help you feel comfortable speaking up with your creative solutions.
'While your verbal communication skills in the office are very good, I notice that you seem to struggle with communication in writing, especially when working remotely. You often do not respond to important emails which can delay projects and cause confusion among the team. It's important that we work together to help you focus on written communication -- let's set some goals together for improvements in Q1.'
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- SMART goals
Anyone can set a goal; not everyone can set effective goals. To ensure that the goals set with employees are effective, always use the SMART framework. This means that each goal should be specific, measureable, achievable, relevant, and time-bound.
A specific goal is one where it's clear what needs to be accomplished. Sounds simple, right? In fact, it's harder to set specific goals than many people assume. A specific goal defines what should be achieved, who will do it, and which steps need to be taken to do this. For example, a specific goal may be for a marketing employee to increase the email open rate using A/B testing to try different subject lines and use segmentation to target different audiences.
The next step in setting effective goals is to make them measurable -- in other words, the effect of the employee's efforts should be quantifiable. In the previous example, the goal is specific but not measurable because it is not clear how much the email campaign open rate should increase by. Therefore, to make this goal measurable it's important to add a number or percentage to the goal. For example, the goal may be to increase the email open rate by 20%.
The goal is specific and measurable, so in theory it's ready to be put into action. But wait -- there are still three more letters in SMART to cover. The A stands for achievable, and while this may seem obvious to HR, it's important to include this step to ensure that employees' objectives are realistic. This depends entirely on the business, department, and employee, and therefore it's down to the employee and their manager to determine whether goals are achievable or not. For example, a 20% increase in email open rates might be extremely ambitious, whereas a 15% increase is still ambitious but more achievable for the employee with their skills and resources.
Note: it's always good to set ambitious goals, but keep in mind that setting goals that are too lofty can actually be detrimental to performance. Employees may become demotivated after chasing seemingly impossible goals, causing their engagement and satisfaction levels to decline. Assess the employee's past performance and that of their colleagues to evaluate whether a goal is realistic or not -- it might take some trial and error to get it right.
What makes a goal relevant? Think about why you're setting this particular goal and how it aligns with the big picture. Sure, this goal could be a great way to motivate the employee to higher performance, but does it align with the business' overall goals?
Take the example of the email open rate goal. If the data shows that your business' sales are largely driven by email marketing and that open rates correlate with purchases, this will be a very relevant goal. However, if open rates tend not to have a major impact on sales or brand awareness, setting a goal in this area may not be so useful. Instead, focus on creating goals that align the employee's professional growth with business goals.
Finally, when should the goal be achieved? A deadline is necessary for achieving the goal. Setting a time limit doesn't mean that the employee's performance after the time frame is up is irrelevant, but instead is an effective way to focus their efforts and performance. Without a clear deadline, it's hard for employees to stay motivated and tricky for managers and HR to track their progress towards it.
In this example, the timeframe for the goal might be throughout Q1 and Q2. Performance check-ins may be scheduled based on the timing of this goal to evaluate the team member's progress and offer them any support or training they need.
- Self evaluation
A self review is a great opportunity to encourage employees to honestly reflect on their own performance, making performance reviews into a more collaborative and effective process. Asking employees to complete a self performance review before the in person meeting gets them into the right mind frame for constructive feedback and helps them participate more in creating goals. This can have real benefits for the effectiveness of appraisals and goal setting; when employees are involved in goal setting they are 3.6x more likely to be engaged in their work, according to one Gallup poll.
Including an opportunity for self appraisals in performance reviews also contributes to a culture of self-assessment within the workplace, empowering employees to take a leading role in their own professional development. With a self-evaluation, employees are encouraged to critically evaluate their own progress and think about their intrinsic goals and motivations, instead of expecting this to all come from an external source like their line manager. As soon as team members start to see performance appraisals as a productive two way conversation instead of a hassle they dread, performance evaluations can become more productive and positive forces for growth.
To get the best results from self-assessments, it can be useful to provide employees with a clear template with which they can assess their own performance. The template may include questions such as:
- What parts of your job do you feel you perform best in?
- Where do you feel that you've risen above and beyond the minimum requirements of your role?
- Are there aspects of your job where you feel your performance is less effective?
- What parts of your job do you enjoy?
- What parts of your job do you not enjoy?
- Are there any obstacles or difficulties that prevent you from carrying out your work and performing effectively?
- How will you hold yourself accountable for achieving goals and results?
With a clear and easy-to-use template for performance self-appraisals, it's easy to get employees to share their own perspective on their work. Don't forget to include a space for additional comments at the end of the template for anything else the employee wants to raise.
- 360 degree feedback
As the name suggests, 360 degree feedback is performance feedback from all directions: from an employee's manager, their direct reports, and their colleagues they work closely with. Anonymous 360 degree feedback provides a broader and often more accurate picture of an employee's performance because it evaluates how they perform in a wide range of settings and working relationships. It can be a great way to identify opportunities or needs for professional development, especially in areas that their line manager may not be aware of.
Moreover, as is the case with employee self-evaluations, 360 degree feedback can contribute to a culture of reflection and peer-to-peer feedback within the organisation. Getting team members comfortable providing feedback to their peers is a key skill for their professional development and can build a recognition-rich workplace.
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Transform performance reviews using HR software
Performance management doesn't have to be admin-heavy and time-consuming -- with HR performance management software you can automate much of the process and use digital templates for streamlined performance reviews every time.
XCD performance management software has a range of features to transform your process. From fully configurable templates for every type of performance review to automated reminders to ensure employees and managers never miss a deadline, the software is designed with efficiency in mind. Moreover, it supports discrete and asynchronous contributions from employees and managers, ensuring a hassle-free process.
Are you interested in trying out XCD's performance management solution for yourself? Book a demo today or check out our case study showing how XCD performance management software helped B.Braun Medical boost productivity by 10%.