Performance Reviews Not Performing? Avoid These Mistakes

If there’s a common thread in much of the content written about performance reviews, it’s the idea that employees generally don’t like them. There’s a sense that they cause fear, stress, and anxiety. There’s also the fact that a lot of people simply don’t think they have much of an impact.

According to Gallup, only 14% of employees agree that performance appraisals help them to improve their performance. A higher proportion of responders suggested that these reviews make their performance worse.

Annual performance appraisals have been called ‘pointless and insulting’ and we tend to agree. There is plenty of evidence that the traditional annual appraisal simply does not benefit employee performance.

According to Gartner, even HR leaders don’t believe that this model of performance appraisals are helping, with only 23% of HR executives believing that their performance management processes accurately reflect the entirety of employee contributions.

So employees don’t like them and many people don’t seem to trust that they work. Certainly not the annual performance appraisals. Expert opinion is virtually unanimous. Continual two-way feedback benefits businesses and their people more than annual reviews.

But even if you have adopted the correct model for performance appraisals, regularly evaluating your people and using technology to provide 360 degree feedback, there can still be a sense that these performance reviews are failing to, well, perform.

That’s likely because, even with the best intentions and the best tools, human beings make mistakes. It can be difficult to be objective. That does not mean that performance appraisals are a lost cause – they can be extremely valuable, but managers must be aware of the errors that can creep into any performance evaluation.

Let’s dig deeper into this subject and explore the common mistakes that need to be avoided to ensure effective performance appraisals.

The Mistakes that Impact Performance Reviews

Failure to Mitigate Unconscious Bias

We’ve already spoken about how to overcome bias in performance appraisals but its worth going over again, because there are many different types of bias and any partiality on the part of the manager carrying out the appraisal will distort any discussion and can render any feedback given as part of the evaluation moot.

The problem with bias is that the consequences and effects it can have on employees is significant – ranging from impacting their mental health to affecting their job satisfaction, and even completely break down the relationship they have with their managers.

Recency bias is one of the more typical types of bias that comes up during performance reviews – this is where the person carrying out the performance appraisal evaluates a person’s performance unfairly because of something that has recently occurred. Whether this assessment is favourable or not is irrelevant – recency bias is a failure to evaluate an employee on the totality of what they have achieved within a given time-frame, instead giving too much weight to one aspect of their performance because it has stuck in the mind of the appraiser.

 The Halo Effect (sometimes referred to as the Horn Effect) is another type of cognitive bias and is one of the most common errors in appraisal meetings. This is where a single positive or negative trait on the part of the employee overshadows all others.  

This is a huge problem for appraisals because it is completely perceptual, whereas the review process should strive to be as objective as possible. It can lead to job performance being rated more highly – or not high enough – simply because the person reviewing them has allowed their judgement to be clouded.

The presence of bias cannot be completely avoided, but it can be mitigated by using evaluation methods that are consistent and accurate and applied equally to all members of staff.

Failure to Set Goals

Unlike unconscious bias, this is one of those performance appraisal errors that can be solved – so long as the appraiser adequately prepares for the review. Every single performance appraisal must be completed with a clear set of measurable goals. Employers cannot simply discuss performance, give an employee a rating, and then expect them to develop or improve without any next steps or measurable goals.

Any assessment of performance must be followed with a set of achievable targets and a sense of how the employer will help the person achieve those targets.

Its worth noting that the best way to do this is through S.M.A.R.T. goals – this acronym stands for:

• Specific – goals must be clearly defined, otherwise you cannot expect someone to meet them
• Measurable – if progress towards the completion of this goal cannot be measured or tracked, you cannot define its success
• Achievable – there is no point assigning a goal that is too difficult or that a person cannot meaningfully complete on their own
• Relevant – goals must be related to the skills of the individual and their job description
• Timely – goals must have a reasonable timeframe for when they should be completed

Goals give the person being evaluated a way to not only understand their path towards progression and development, but to be able to track their own journey on that path. It enables an organisation to see tangible results in terms of that progression, and most importantly, it allows a clarity and transparency to the process, helping an employee understand exactly what will be required of them.

Failure to Follow Up Appropriately

For many managers, it can be easy to forget about the review and the feedback until the next time they have to undertake a performance review. This can severely undercut the effectiveness of performance management, because it renders the entire process pointless.

If performance appraisals simply take the form of a quarterly discussion without any follow-up or progress against the plans that have been outlined, it will have been a waste of time for everyone involved.

A lack of follow up can mean that employees feel as though the appraisal and the goals they have been set were simply a box-ticking exercise. It can make it seem as though the goals were only important or relevant to that one discussion, rather than their performance as a whole. This can damage motivation, which will in turn hamper productivity.

Make sure that your approach to performance management is consistent and not simply something done for the sake of an appraisal meeting. Check in consistently with your employees and demonstrate that your business cares about their performance and development all the time – not simply a few times a year.

If you’re interested in understanding the impact XCD’s performance management solutions can have on your business, check out our case study showing how B.Braun Medical were able boost productivity by 10% after implementing out performance management software.