Performance review best practices for 2018
The beginning of the new year is well behind us and we are in the thick of the first quarter. By now, your finance team has done most of the work determining your financial results for 2017, and many companies are getting ready to launch their annual performance review process.
While there has been an ongoing debate about whether to do annual reviews, or replace it with a continuous feedback approach, many organizations still follow the annual review process. There are many reasons for this: the organization already has the tools in place, managers understand the current process, and employees have come to expect it. We’re not saying the traditional process is perfect…but it can nonetheless add value if done correctly.
Here are some tips to make the process go smoothly and more importantly, have meaning.
- Focus the review period: instead of requiring reviews be done on the employee’s anniversary, schedule the reviews to occur at one time of the year. This has many benefits: it makes financial planning for increases easier, ensures better compliance because the organization is focused on doing them, and avoids that feeling managers have that they are ‘always doing reviews’.
- Make it simple: if you’re a manager with ten reviews to conduct, you don’t need a process that will take hours and hours to complete. Don’t overwhelm them with dozens of factors to rate. And speaking of ratings, limit the number of ratings that can be given so that the distinctions in performance are meaningfully shown. We recommend three- or five-point rating scales.
- Add some constraints: some managers can barely write two sentences about someone, others can write a novel. Don’t make them use a format that requires them to write essays. And if you are using ratings, you should use a tool like MS Excel so that you can not only control the inputs but make the tabulation of the ratings easier.
- Collect, review, and use the data: after all the effort of conducting reviews, don’t let them disappear into a personnel file never to be seen again. Take the time to aggregate and review the ratings, both overall and by rated dimension. This can give you insight into your bench strength and focus your development efforts better.