It’s an annual ritual. A manager gets together with each of his or her employees, gives them cogent advice on how to improve their performance, and the grateful employees walk away astounded by the boss’s astute insight.
The problem is, most managers suck at employee reviews.
Research from CEB, a business advisory company, found that two-thirds of employees who received the highest scores in a typical performance management system were not actually the organization’s highest performers. Moreover, conventional reviews only generate a 3- to 5-percent improvement in employee performance. Even HR folks believe there’s lots of room for improvement—just 23 percent—said they were satisfied with their organizations’ performance evaluations, down from 50 percent a decade ago. In fact, 30 percent of performance reviews actually end up decreasing employee performance, research shows.
It may be that traditional evaluation methods are too stringent. The stack ranking, for instance, only allows managers to give excellent ratings to a small percentage of employees, and dictates that bad ratings are given to another percentage—a pool of people who typically are then laid off or leave. And this results in bad morale at a number of companies, most notably Microsoft.
For that reason, a number of companies are doing away with performance evaluations altogether, the Washington Post writes. “CEB found that a small but growing 3 percent of companies in 2012 had dropped traditional annual performance reviews, up from 1 percent in 2011.” Instead the companies are moving to more frequent evaluations that don’t rank people.
Can’t talk your company into just ditching performance reviews? Here are some ideas to help make the performance evaluations of your employees more productive.
- Offer feedback more often. Don’t wait for the review to let employees know how they are doing. Nothing in the review should be a surprise, particularly negative things. Otherwise employees work all year assuming things are fine. Getting regular feedback, even if it’s negative, is easier to handle if they hear it more frequently, writes the Wall Street Journal.
- Don’t feed them a sandwich. You may have learned that it’s a good idea to “sandwich” negative feedback between two pieces of positive feedback. But in business, that doesn’t work out well, experts say. In fact, it could lead employees to discount the positive feedback as insincere. “Effective leaders are transparent about the strategies they use when working with others,” writes Roger Schwartz, an organizational psychologist, leadership team consultant, and president and CEO of Roger Schwarz & Associates, in Harvard Business Review. “The sandwich approach is designed to influence others without telling them what you’re doing.”
- That said, provide positive feedback. A good rule of thumb is five positive pieces of feedback for every one negative one, writes Kristi Hedges, a leadership coach, speaker and author, in Forbes.
- Provide negative feedback. Highlighting how employees can improve is important, too, writes Harvard Business Review, because, believe it or not, your employees want it and expect it from you. “A significantly larger number (57%) preferred corrective feedback; only 43% preferred praise/recognition,” according to the publication. Moreover, “fully 72% said they thought their performance would improve if their managers would provide corrective feedback.”
- But be careful. Even though people say they want negative feedback, they hate getting it, research finds. “What's meant to be a constructive and helpful discussion quickly gets lost once someone—even those who are sincerely interested in developing their talents and skills—hears critical feedback,” writes the Washington Post. “If negative feedback has the potential to discourage even the best performers and the most industrious employees, then managers need to be especially careful that what's intended as praise doesn't get misconstrued as criticism.”
We feel confident that, given this feedback, we’ll see marked improvement in your company’s employee evaluations next year.
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