❣️Looking for Plai.team? You're in the right place! Check out Peoplelogic Impact! - Learn more
A chapter from:
A Guide To Effective Performance AppraisalsDownload Your PDF Now!Ensure the employees don’t suffer from stress and anxiety when they go through evaluations. Here are seven steps that help.
Never hold performance appraisals just because others are doing the same. Companies, specifically the HR department, must establish the proper purposes for conducting appraisals. As mentioned in Chapter 1 (Performance appraisal goals), you shouldn’t appraise your employees merely for banding them as good or bad.
It isn’t hard to understand why employees might react badly to performance reviews that lack wholesome objectives. As individuals, they dislike being judged for mere formality. Employees want the entire process to be respectful, stress-free and contribute to their professional growth. In the end, they want the appraisal to be the catalyst for their growth.
It helps when the HR team takes a more proactive role in creating the awareness of performance appraisal. Merely setting up the evaluation guideline is not enough. Instead, the HR team should correct any misguided views and explain why the performance appraisal is necessary.
Instead of being wary, you’ll want to have your employees anticipate the performance reviews. To do so, make growth-seeking a habit in your company. Encourage your team to be proactive in improving themselves and use performance appraisals naturally as a means to support them.
When employees are accustomed to the idea that constructive feedback is pivotal to career growth, appraisals become less intimidating. They will be more receptive to the assessment and less anxious throughout the process.
If you want to conduct effective performance appraisals, you’ll need to start by convincing the department managers of its benefits. Some managers are not aware of the true benefits of appraisals, while others feel that doing so is a waste of time. When left unchecked, your managers will be reluctant to hold the appraisals properly.
Sometimes, your managers believe that performance reviews are necessary, but they lack the skills to do so. For example, they are uncomfortable providing feedback to their subordinates, particularly if it involves criticism. Or they thought that holding 1-to-1 sessions was unnecessary and solely depended on evaluation forms.
Therefore, the HR team needs to train business managers on the performance appraisal best practices. The HR team can set a performance appraisal framework for the business managers. For example, the HR department spelled out the instructions and timeframe to conduct the appraisals.
Giving feedback is an art that takes time to master. An evaluation session might go south when done wrongly, leaving employees hurt and confused. Therefore, it’s essential to educate your management on how to provide relevant feedback. Always take a positive approach and avoid direct criticism, especially in public.
While performance appraisal is all about transparency, you should be aware and avoid certain harsh terms. For example, words like ‘fine, fired, and pressure’ automatically instill negative perceptions. Using such terms is not helpful even if you have the best intention.
Instead, any hints of punishment during the appraisal will shut down the communication channel with the employees. This is even more so if they have traumatic experiences with previous appraisals. So, choose your words wisely when providing feedback to employees.
Given that employees expect frequent and honest feedback, you’ll want to use performance appraisal software to reduce the workload on the HR team and managers. Investing in performance automation tools allows the company to scale the appraisal process as the company grows.
It is also easier to convince the management and employees that holding appraisals isn’t a waste of their time when you can quantify the resources involved. When used appropriately, the performance appraisal software leads to positive growth of the entire organization. You’ll also end up with a grateful team that thrives on the constructive, honest feedback.
Salary based on OKRs leads to understated targets and overstated accomplishments. It's an expected and logical outcome because of the incentives it creates. I doubt you'd like to create such a culture in your organization.
Below are the main problems that appear if you try to link OKRs and performance reviews tightly and tips on how to avoid them.
Originally, Objectives are designed to be aspirational. Team members are encouraged to set stretch goals that are beyond what they think is achievable. And seek for creative solutions to try to achieve such targets. Of course, most of the time team members would miss several such targets. And if they would be punished for it, the next time teams would set lower goals they know they'd hit. And the next time — even lower, to reduce the risks.
Eventually, you'd end up with the list of trivial tasks for OKRs, that everyone uses only to get their salary and bonus, and nothing else.
As a consequence of the previous problem, when team members start to lower their targets, they still need to present themselves are high-achievers and justify their contribution to the organization. And such teams would overstate their impact on the organization. You'll get the culture of "pretending to contribute higher than it is in reality." And for people that play such games, it takes mental effort and energy, thus leaving them less focus to do the work.
employees are evaluated only based on % of accomplishment of their goals, they don't have incentives to help other team members or other teams. Such an approach creates the culture of individualism, or the tribe of the 3rd level, as Dave Logan mentioned in the book "Tribal Leadership."
Instead of having the OKRs and performance reviews tightly coupled, separate them as much as possible. OKR cycles and salary review cycles should have different cadence. Laszlo Bock, in his book "Work Rules!" suggests making at least 1-month gap between OKR review and performance reviews. By creating this gap, you'd allow your employees to focus on development, contribution, and collaboration during the OKR meetings, and take away salary and status concerns.
Of course, you cannot separate OKRs from Performance Reviews completely. Moreover, we believe that you SHOULD take OKRs into account during the employee performance reviews. However, make it only one of the sources to evaluate the performance, and by far not the main one. And take into account many other factors when evaluation OKR completion score:
No formulas can take into account all the factors that determine the contribution of each team member. Moreover, even if you could create such a method, it would become outdated in a few months. Don't waste time and effort trying to develop such formulas, and rely more on the peer and manager feedback for evaluating performance.
No formulas can take into account all the factors that determine the contribution of each team member. Moreover, even if you could create such a method, it would become outdated in a few months. Don't waste time and effort trying to develop such formulas, and rely more on the peer and manager feedback for evaluating performance.
It is one of the common complaints that we hear when we suggest that OKRs and Reviews should be separated.
On paper, the formula such as Salary = f (salary base * % of goals achieved) might seem objective, but in reality, it is not. It depends on the highly subjective notion of how difficult the original targets were. Such formula also depends on the negotiating skills of employees to reduce their goals.
It is one of the common complaints that we hear when we suggest that OKRs and Reviews should be separated.
On paper, the formula such as Salary = f (salary base * % of goals achieved) might seem objective, but in reality, it is not. It depends on the highly subjective notion of how difficult the original targets were. Such formula also depends on the negotiating skills of employees to reduce their goals.
Overall, it's almost impossible to create an objective performance review process. It always will be highly subjective. Just accept it.
Our tip is to make the performance review process transparent. It would build trust in your team that nothing is hidden, and would make employees feel like the process is more objective and trustworthy.
Review the top 7 common mistakes organizations make when conducting performance reviews.
Problem
Many teams have only annual review cadence (especially the ones with old- fashioned management approaches). In the modern fast-changing world, it's simply not enough. Memory tends to fade, and we might not remember a lot of valuable insights in a year. Plus, we tend to have the recency bias and recall only the latest events. Furthermore, bad habits have time to form during the year when not corrected promptly. Postponing the review is terrible both for the person and for the organization.
Solution
The obvious solution is to make the review process more often - twice per year or once per season.
Besides, it should be complemented with frequent, ongoing feedback conversations. A good practice is to have regular 1:1 meetings and encourage peer-to-peer feedback on-the-spot. Check out the article "The power of feedback" to learn more on how to set up the feedback process in your team.
Problem
When the review process is linked with the performance appraisal, participants are more likely to hide the issues and highlight only the excellent achievements. They might also treat reviews only as the necessary bureaucracy to get the promotion. And not as a source of valuable information to grow and perform better in the team. And thus, employees miss valuable feedback.
Solution
You need to set up separate processes that would clearly communicate the goals: which review is focused on growth (usually 360 degree reviews), and which — on performance and compensation evaluation. By separating the conversation, you create a safe space for your team members to be honest, to innovate, take wise risks, and thus bring business value for the company.
Problem
We, humans, tend to avoid tough conversations and critical feedback. Especially when it is connected with some personality traits, like being too aggressive, or too soft. As a result, not all team members receive the feedback and review they deserve, thus miss opportunities to grow and improve.
Solution
Create a safe space for your team to share honest critical feedback. It's easier said than done, and for sure doesn't happen overnight after a single event. Check out this article on HBR on how to create psychological safety in the workplace.
Problem
Often teams focus on weaknesses rather than strengths when giving feedback or evaluating performance. A popular concept about growth is that it should be fixing mistakes and overcoming weaknesses.
Solution
It's equally (if not more) essential to multiply and maximize the strengths of your team members. It can bring even more value for the organization if you leverage your team member's strengths. When conducting reviews, ask participants to identify both strengths and weaknesses.
Problem
Different teams have different cadences of work. Engineering teams might work on the bi-weekly sprint basis and quarterly product planning, enterprise sales - on the monthly sprints and half-year evaluations. The process that suits one team does not necessarily suit another one.
Solution
The key to effective performance reviews is to design the process that works best for your employees, not the one that is most convenient for HRs or top- management.
Work closely with your team and team leads to understand their needs. And build the review process that would help them achieve their goals and integrate into their workflow.
Problem
Since reviews are often focused on personal growth, there's no required follow-up about the results and the subsequent actions. Especially taking into account that most employees are busy anyway, and often just forget to implement the suggestions from the review. Thus the whole process brings little or no value for the team. That's why 82% of report performance reviews were not worth the time (according to Deloitte).
Solution
The solution is to assign a responsible person (HR, direct manager, or Learning and Development specialist) to follow-up on the review results and steps taken to improve. The team needs to remember that the impact of the reviews lies outside of the process, and it's their responsibility to take the next steps.
Problem
Many teams tend to start with spreadsheets or even paper-based forms to track reviews. Such a process is hard to implement, requires a lot of HR's time, looks unfriendly, and time-consuming for teams and managers.
Solution
Specialized performance review software can help automate the process. Professional software can automatically send nudging reminders, help to build the questionnaire with tips and templates, and make it easier to track progress. It also helps to calibrate the reviews, analyze, and share the results.
Performance management is an ever-changing process. Progressive organizations make the review process effective following these best practices:
Run effective reviews that inspire growth and high performance.
Adapted to fit your unique company needs.
Peoplelogic helps you build and maintain a skilled, engaged, and continuously improving workforce.
Schedule a Demo