Today we’re here to talk all about performance reviews —what they are, how they came to be, and how to do them right.
As always with our ‘how to’ series, we’ll also debunk some common myths and provide you with a clear step-by-step plan to help you successfully carry out your next appraisal.
To finish things off, we’ll take a quick look at how Facebook handles reviews, and what we can learn from them.
Table of Contents:
What are performance reviews?
A performance review, also referred to as performance appraisal or performance evaluation, is a method to regularly evaluate an employee’s job performance and overall contribution to the company in order to improve that performance.
They help provide feedback, offer a formal moment in time to evaluate job performance and help in distributing raises and bonuses among the employees.
A crucial element of the employee appraisal is that it is a shared responsibility between the employee and manager.
It is a part of the performance management cycle. The difference between the two is that the latter includes all the interactions between employee and supervisor that help in improving performance while the appraisal is a regular sit-down in which the employee is formally assessed.
A brief history of performance reviews
Though there’s no definitive source that points to the very first performance review, we do know that it may go as far as WWI, when the U.S. military created a merit-rating system to flag and dismiss poor performers. This same system was used to rank enlisted soldiers based on their potential to ascend to leadership.
Later came social psychologist Douglas McGregor who contributed much to the development of management and motivational theory. He showed that there was another way to view workers and leadership. Managers and their staff were seen in a collaborative way and performance could be positively influenced by encouraging development. Imagine that!
Fast-forward to 2001.
As dissatisfaction with the traditional process grew, high-tech firms ushered in a new way of thinking about performance resulting in the Agile Manifesto.
It emphasized principles such as collaboration, self-organization, self-direction, and regular reflection on how to work more effectively.
These principles changed the definition of effectiveness on the job—and they were at odds with the usual practice of cascading goals from the top down and assessing people against them once a year.
Today, many very successful companies no longer follow a traditional performance review process. For example, in 2012 Adobe ended annual performance reviews, in keeping with the famous “Agile Manifesto” and the notion that annual targets were irrelevant to the way its business operated.
Two common performance appraisal myths debunked
There are quite a few myths surrounding how most employees and managers think about appraisals. Let’s debunk two of the most popular ones:
1. Performance reviews have to be at least an hour long
According to a report from TINYpulse, the main reason employees and managers don’t like performance reviews is because they’re too time-consuming. Remember: there isn’t a rule that says they need to be long enough to bore all involved parties.
If you’ve kept track of performance all year long (data doesn’t lie!) and you’ve done your work as a manager prior to the review, then both parties should have a fairly good understanding of the employee’s review.
This brings us to our second myth:
2. Reviews should take place once a year
Not only will assessing your staff’s performance more frequently make the review process less burdensome, but employees will also receive more timely feedback and it will create a better relationship between them and their managers.
How to do performance reviews: a step-by-step plan
Every company does employee performance appraisals differently. However, there are several best practices that every manager should follow, and we’ve outlined them for you here.
1. Use a clear outline
Both managers and employees may feel uncomfortable during the performance appraisal. Using a job performance evaluation form or some other appraisal outline will be helpful for both preparing for and carrying out the review.
2. Involve your employee as much as possible
One of the key problems in employee appraisals is a lack of buy-in from the appraise themself. Employees who participate in their performance review are more satisfied, rate the session as much more fair, useful, and are more motivated to improve.
3. Start with the bad news
According to Daniel Pink (2018), employees are most satisfied when bad news is addressed early on in the appraisal. End the meeting on a positive note.
4. Give employees more regular feedback
Don’t wait until the end of the year to discuss issues (or recognize efforts) that took place in January.
Employees report that they are looking for regular, continuous feedback to do their work better. Find ways to let managers touch base with employees continuously using technology.
5. Meticulously document your employee performance appraisal sessions
Important decisions about who to promote, which salaries to raise, and who to terminate, are all based on performance management information. Performance appraisal meetings should, therefore, be meticulously documented.
This is just as important when you switch to more continuous feedback.
91% of companies that have adopted continuous performance management report better data for people decisions. These companies also report making major progress in removing bias in promotion and advancement.
– NeuroLeadership Institute, 2016
Example: performance evaluations at Facebook
Even though Facebook still uses traditional biannual reviews and a stack ranking system, the company has implemented a lot of innovative tactics.
Reviews are treated like checkpoints, with the goal that the employee should never be surprised by anything brought up in the meeting.
Additionally, Facebook managers and employees are able to give and receive continuous real-time feedback in between review cycles, thanks to internal software.
During its semi-annual reviews, Facebook focuses on peer-to-peer and employee-to-manager feedback. By zeroing in on peer feedback, managers get a good picture of how employees collaborate with one another. This is crucial to the company’s success.
In short, what we love about performance evaluations at Facebook:
- They treat them like checkpoints, which means no bad surprises!
- Their continuous, real-time feedback leads to continuous conversation
- Peer-to-peer and employee-to-manager feedback
The evolution of performance management is just one way the role of the manager is changing in 2021. The COVID-19 pandemic, coupled with changing expectations and the rise of hybrid work has meant managers need to develop new skills.