How to Conduct an Effective Employee Performance Review in 2020

Whether you call them performance appraisals, employee evaluations, or a stand-alone annual punch in the mouth - for many people, employee performance reviews are disliked, avoided, and painful processes. But they don't have to be.

In today’s climate, most modern performance appraisal methods that are successful, align with the company culture and goals. Companies create a cohesive plan for the culture they want to develop and identify what employees value from performance appraisals to define a process that works well for company needs. 

By putting people at the center of employee performance reviews, it offers an opportunity for impactful dialogue to advance employee careers and strengthen relationships. A modern appraisal process encourages employees to learn and grow while standardizing reward and promotion decisions.

Deloitte reported in the 2017 Human Capital Trends Report that 90 percent of companies that redesigned their performance management saw improvements in engagement, and 83 percent say employees and managers are having more quality conversations. By investing in continuous learning and fostering a growth mindset in every employee, companies can outperform and out-innovate their competitors.

Here are 13 tips for conducting effective performance reviews that will help you to empower, support, and grow your people:

1. Avoid The Shock Factor

When it comes to reviews, employees must have a good idea of what will be discussed before they walk into the conversation. When managers have regularly scheduled touchpoints with employees, they can provide consistent feedback, increase employee engagement, and co-create solutions for both people and business. By combining a weekly one-to-one meeting, quarterly reviews, and the once-per-year formal review, companies can ensure feedback is open, honest, and constructive and happening throughout the year.

2. Grow Your People Into Leaders

Capturing performance means exploring employee contributions holistically. Google is a prime example of how they develop their employees to their full potential through people management, on-the-job coaching (Project Oxygen), peer-to-peer feedback, outside training, and through 360-degree feedback. Google wants to know how employees adhere to their company values, how they apply problem-solving skills with work situations, and how they deliver high-quality work with little guidance. They encourage employees to lead and be heard in an increasingly large organization. 

Google’s performance process involves:

• An annual performance review including a mid-year checkpoint
• Monthly check-ins which include one-to-one meetings that focus on the person holistically, including career development, coaching, personal issues
• An engagement survey
• An annual upward feedback survey where direct reports review only supervisors
• Objectives and Key-results which are generally within a 3-month cycle and capture the objective and the key result  
• Compensate people through bonuses, equity stock grants, and prizes.

Reviews are the perfect place for people to explore their career trajectory and grow their star contributors into managers and leaders.

3. Have Courageous Conversations

Research has shown that managers consider delivering negative feedback as one of the most challenging and stressful interactions. Leaders can create and curate resources to help people thrive. By providing specific learning, training, and resources on how to deliver honest and constructive feedback, creates the space for conversations around performance and compensation, and how to discuss areas of improvement when negative feedback is provided. By coaching managers to lead discussions, companies will find that there can be an increase in the number and quality of reviews being completed. Imagine a workplace with quality conversations that embrace open, honest, and transparent discussions, where people bring their whole selves to work.

4. Set Clear Goals and Expectations

Companies must be clear about their annual and quarterly goals. The yearly goals can be more aspirational, whereas quarterly milestones must explain how you will get there. Quarterly goals are a more accurate reflection of an employee’s overall performance. Josh Bersin, Forbes contributor, and HR expert reported that “companies that set performance goals quarterly generate 31% greater returns from their performance process than those who did it annually”. 

 Many companies adopt goal-setting frameworks such as SMART goals and Objectives and Key Results (OKR) to drive consistent goal setting. As part of setting goals, learning milestones must be identified as part of your quarterly metrics. Developing a learning-based plan provides the platform for growth. Learning objectives can incorporate reading a few articles a week, interviewing colleagues, watching e-learning courses, or attending an outside training. Ongoing conversations must tie in the employee’s learning connection to overall performance. 

Companies such as LinkedIn, Google, and Target have embraced OKR’s to measure employee goals. They use a formula of “I will (Objective) as measured by (Key results).” The objectives are usually qualitative goals, and the key results are a series of metrics that show you have met the goal. For instance, increase brand recognition by increasing new site visitors by 25 percent.

5. Utilize the Right Combination of Internal and External Tools 

Rather than grading employees based on their performance, Fortune 500 companies are replacing antiquated annual employee ranking systems with consistent feedback and coaching conversations throughout the year. 

Adobe, Accenture, Deloitte, and GE have all changed their performance reviews from traditional rankings to implementing frequent performance conversations. GE developed a mobile app to provide a platform for an employee to define their goals and encourage numerous conversations about progression towards goals. By providing tools to formally document employee feedback such as GE, employees can request direct feedback from managers.

Managers must be provided with the tools and technology to collect data, communicate, and learn about performance review processes. When companies offer a central hub for information, it streamlines accessing information and allows people to be more responsive in completing procedures. LinkedIn Learning can support employees to access resources and expert learnings to help their development and gain confidence. 

6. Communicate, Communicate, Communicate

There are many mediums available within companies to communicate the value and importance of performance reviews. Companies can use email marketing, physical desk drops, posters, bulletins, meetings, external speakers, or lunch and learns to promote and keep the reviews as part of ongoing conversations. Buy-in must begin at the top by driving communication and being visible in leading conversations throughout the company. 

7. Offer Real-Time Feedback

People are crying for regular check-ins, real-time feedback, and agile goal management. Employees want more forward-looking performance reviews that involve 360-degree discussions where feedback is invited to obtain a complete picture of an employee’s performance. Simultaneously, employee self-evaluations can be adopted to promote engagement and communication from the candidate.

8. Create Growth Plans

Emphasis must be on the employee’s future performance by discussing a plan for improvement and growth. The purpose is to reflect on the skills and knowledge required to achieve goals that will support employee’s growth and in the company.

When co-creating growth development plans, the following checklist can be used:

• What skills required to meet the career goals of the employee?
• What are the critical areas of development?
• Highlight the employee’s strengths and skills that have developed throughout the year.
• Identify how the employee will acquire new skills – whether it be through online classes, coaching, reading material
• Define the measures of success for achieving each capability
• Recap how this plan fits within the employee’s role and expectations
• Confirm a quarterly check-in point to reflect on progress made in the growth plan

9. Provide Genuine Feedback

Every human being needs continual learning, and strength-based feedback must be the platform for conversation. A great place to start is within the designing of a development plan. The employee must be encouraged to reflect on their performance by conducting a self-review ahead of time.

By asking the right questions within the one-one-one, can keep the performance review focused on topics that are important to both employee and company success. Managers can foster a conversation that invites honest, genuine feedback and unlocks actionable ways to improve performance. Some questions may be:

• What are 3 accomplishments from the last quarter you are most proud of?
• What are your 3 goals for the next quarter?
• What obstacles stand in your way?
• What impact has your performance had on the team and company?
• What are three development goals you set for the next 12 months
• How can I improve as your manager?

10. Coach People in Real-Time

A study conducted by Wakefield Research reported that more than 90% of employees prefer their manager to address mistakes and learning opportunities in real-time. Companies are adopting regular check-ins rather than a once-a-year exercise. By engaging in informal undocumented conversations about performance throughout the year, people get to experience real-time coaching rather than having to wait for a meeting to recall mistakes from months ago. It is a perfect opportunity for managers to identify, resolve performance issues, and celebrate successes promptly.

11. Schedule Regular Check-Ins

Adobe replaced performance reviews with an approach called Check-ins to support ongoing dialogue between employees and managers. Adobe initially invested in management development programs before their implementation of check-in and coached managers on how to set expectations, give feedback, and support employees to grow their careers. Adobe promoted coaching their managers to embrace entrepreneurial thinking by giving them access to an internal salary tool that shows where each employee falls in the salary range for their role. Each manager has a pool of money allocated to their team so they can award in any way they deem appropriate based on three key things:

• What impact is the employee making in terms of objectives and the role they play in the company?
• What skills does the employee have that are unique and challenging to find in the market?
• Is this employee paid competitively?

By considering these questions, managers begin to view their people as the greatest asset in the company and with a lens as to how they can reward their people for outstanding performance. Adobe has bolstered support through its Employee Resource Center, which is a dedicated employee experience expert who can be accessed for coaching on compensation at any time.

12. Lead with Quality Questions

Through weekly one-on-one meetings, managers can lead to quality feedback questions to stay informed, address challenges, and celebrate performance success. Quality questions that managers can ask during check-ins are:

• What can you celebrate in your role?
• What challenges are you currently facing?
• What is one idea to improve company service?
• What are your top 3 priorities for the next week?

13. Choose Your Words Carefully

When designing the growth plan, consider your words carefully as they carry power - the power to motivate and deflate. Managers must consider staying positive, focused on problem-solving, use powerful action words, and must own their feedback. Managers and employees need to have a shared understanding of what high performance looks like. Employees must understand how metrics are used, what they mean, and how their role can impact and contribute to individual and company growth and success. 

Effective Employee Performance Reviews Help People Do Their Best Work

To set your company apart in the marketplace today requires new ways of thinking, being, acting, and working together. Real-time regular performance feedback trumps the one-time-per-year performance review. The modern performance review is about people, not just outcomes. 

Providing regular feedback and support to your employees help them to feel open, connected, and inspired to deliver their best work. By continually growing your people and supporting your talent, performance management, and reviews will drive better business results, and your people will thank you for it. 

Are you interested in making your workplace more efficient? Check out what Eden’s Workplace Management Platform can do for your office.