How to revamp your company’s employee performance review

Does anyone actually like the annual performance review? According to Gallup, only 14% of employees strongly agree that their employee performance reviews inspire them to improve. And they can actually do more harm than good. Yet most companies continue with the same old model of sitting down once a year for that uncomfortable conversation.

It’s no surprise, then, that many companies have been ditching the old model and instead, bring managers, employees, and team members together for weekly, monthly, or quarterly performance conversations. And early evidence indicates that organizations who train managers and employees to have these types of meetings are able to improve engagement and performance.

But what if your managers and employees don’t know how to effectively communicate? What if they fall short of identifying progress – or setbacks – based on clearly defined short and long-term personal and corporate goals? Here’s how to foster a culture of performance that replaces annual reviews with strategic, candid, growth-centered communication.

Train managers to lead and communicate

To successfully replace annual employee performance reviews with more frequent development-focused communications, managers must hone their communication skills. They’ll need to coach, give meaningful feedback, and discuss career development, says Human Capital Institute Vice President of Research Jenna Filipkowski.

“Coaching is a discipline,” she says. “You need to learn skills and techniques; it’s not commanding and directing people to do something. It’s drawing potential and development and letting them do their best work, rather than giving everyone a set mandate to be successful.”

Provide managers with the resources they need to lead and coach, such as in-person and online courses. Without this foundation, your new employee performance review strategy turns into all talk and no show.

Explain why feedback matters

On-the-fly employee performance review and feedback programs are common in Silicon Valley. Implementing one requires a huge paradigm shift in larger, more established corporate cultures.

“When you’re growing as a company that’s the best time to do that paradigm shift,” says Gelena Sachs, Director of People Operations for Udemy for Business, a globally diversified company offering online courses, including topics like coaching for performance.

What’s the key? Show people that feedback is a tool to help upscale their skills, better understand themselves, and measure the value of the work they produce.

“People shouldn’t be afraid of giving or receiving feedback – it’s a gift,” she says. “Without that feedback, you don’t know what you don’t know. That’s the area that gets brought to light for people,” says Sachs.

Communicate with care

Along with being honest, you have to care about the person to whom you’re giving feedback, says Kim Scott, CEO of Candor Inc. and author of Radical Candor: Be a Kickass Boss Without Losing Your Humanity.

“Radical candor gets measured not at your mouth, but at the other person’s ear,” Scott says. She recommends that you tailor the message in a way that suits the listener’s personality.

A manager who challenges an employee directly, but doesn’t care personally, will come off as obnoxious and aggressive. Conversely, an overly empathetic manager who is unable to share negative feedback deprives their employee of the chance to learn and grow.

The worst managers don’t pass along genuine advice and only share feedback when it’s politically expedient for them. They’re guilty of manipulative insincerity. Scott says that the best managers practice impromptu radical candor.

When you see somebody do something fantastic in a meeting, speak up right then, she says. When someone screws up, tell the person in private immediately after the meeting.

“You have to have the presence of mind and emotional discipline to have that two-minute conversation. You have to be willing to be late to your next meeting or have slack time in your schedule,” adds Scott.

How to retool your employee performance reviews

Companies that successfully replaced annual employee performance reviews with more frequent performance conversations cited these characteristics to retool performance reviews:

  • Have a performance review system that collects and shares performance feedback from key stakeholders, including managers, co-workers, customers, and investors.
  • Encourage employees to take ownership of their careers by choosing development tracks or career paths and then decide what they need to achieve their goals, like classes, stretch assignments, or rotations in other areas of the company.
  • Train and hire managers who can identify employee strengths and opportunities to improve and who can coach for improved performance and career guidance.
  • Foster a culture that encourages candid conversations about what’s working and what needs improvement among co-workers, bosses, and subordinates.
  • Measure employee performance against objective individual, team, and/or position-related key performance indicators (KPIs). Don’t punish those who rank lower than others in the company, as long as they meet their KPIs. If they continually fail to meet KPIs, counsel them into different positions.

Improve your hiring and management skills

Nobody wakes up one morning suddenly gifted with the knowledge of how to manage a team and conduct perfect employee performance reviews. It takes time and the ability to adapt your management strategies to new trends in the workplace. And it means hiring the right people. Basically, as a leader, you’re always learning. Could you use some help along the way? Sign up for Monster Hiring Solutions and you’ll receive the latest recruiting tips, hiring trends, and management strategies to help you hire stellar employees and develop successful leadership skills.