Is your company still doing the same type of performance reviews that it was 10-20 years ago? Unless it has really proven to be effective, you might be ready for a change.
Historical evidence shows that performance reviews date back as far as the third century, with Chinese emperors rating the performance of imperial family members. Even then, complaints arose that the emperor “seldom rates men according to their merits, but always according to his likes and dislikes.” (Just imagine if the ancient Chinese had access to social media.)
The modern performance review—using numbered ratings and related comments—began in the late 1950s with the workplace philosophy Management by Objectives. Managers were to rate workers on completion of work and attainment of goals, which had been agreed upon by both parties. Professional skills and personal qualities were often rated as well. Managers came to the meeting with scores in hand and did most of the talking, though employees were encouraged to respond.
Though not perfect, systems like these were used for 40-50 years. But, as far back as the 1990s, just 5 percent of companies were very satisfied with their performance review process, according to the Society for Human Resource Management.
Why are attitudes changing toward a process that worked for a half century?
As most of us have learned, employees generally dread performance reviews. In a recent survey, about 80 percent of American workers were dissatisfied with their reviews.
Here are several criticisms from employees of the traditional performance review:
- Causes anxiety, anger, and humiliation
- Defeats morale
- Destroys teamwork
- Focuses on finding faults
- Shows favoritism
But why now? First, the American workplace experience has been evolving over the last decade.
Employees work more in teams; some of them work remotely; others have more than one supervisor.
Second, millennials—those born from the early 1980s to late 1990s—have grown up with instant communications and thrive in workplaces reflecting that. They want prompt, immediate feedback.
Employee attitudes affect their work and, ultimately, the corporate bottom line. As a result, many businesses, led by a number of Fortune 500 companies, have instituted less formal, more frequent conversations with employees held throughout the year, rather than annually.
These ongoing discussions are more collaborative:
- Are more two-sided—feedback and coaching from the supervisor and input from the employee.
- Don’t include grades or scores, which can be subjective or biased.
- Offer regular check-ins several times a year but may last just 30 minutes or less.
- Concentrate more on the future than past, with an emphasis on employee development.
- Are more focused on improvement and success of both individual and team.
Here are several advantages of ongoing feedback:
- Improves motivation and productivity
- Creates opportunities for achievement
- Focuses on employee development and achievement
- Encourages collaboration and teamwork
- Leaves employees feeling less anxious
- Builds loyalty because they are less threatening
The 2017 Global Human Capital Trends report from Deloitte found that 83 percent of companies that adopted regular, less formal performance conversations said the quality of conversations between employees and managers improved.
Despite this more positive, productive approach, employers must still be direct in dealing with under-performing employees. This means developing a performance improvement plan with specific, measurable goals and deadlines. Achievement, or lack of it, must be documented in their personal file.
Need advice on performance reviews or other perplexing HR issues?
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