Some of you may have read Samuel Culbert’s article which appeared in the Wall Street Journal entitled “GET RID OF PERFORMANCE REVIEWS”. Dr. Culbert is a distinguished professor, but I think he is missing several key points about the performance review process. He proposes something he calls a “performance preview” as a better alternative. Unfortunately, the “performance preview” process that he describes is not a realistic alternative. This is because the utopian setting he outlines, does not exist in most organizations. If it did exist, the traditional performance review process would work in the first place!

I think it is important to address what we can do as business leaders and HR practitioners to make the performance review process a more meaningful experience for all the stakeholders — managers, employees and the organization as a whole.

The review process will be most effective when the following components are included as part of the process:

ALIGNED WITH BUSINESS OBJECTIVES
Organizations must take great care to ensure that the performance review process supports the key objectives of the organization. HR needs to get in front of the business objective-setting process and work to ensure that there is a proper cascading of objectives from the strategic plan right down into individual performance reviews.

TAILORED TO THE ORGANIZATION
It is seldom that an off-the-self performance review template will work successfully! The components that make up the core of any performance review process must be tailored to the organization’s specific culture and values.

MANAGERS & EMPLOYEES ARE TRAINED
By training on proper use, I do not mean on how to complete the forms! Of course, training should be provided on the technical steps within the process, but the real value comes from improving the interaction and feedback aspects of the review process. This is where trust and honesty is critical and where straight talk is needed. Just as many rating errors can be made in giving people too rosy of a picture of their performance as not giving them adequate feedback information.

CULTURAL VALUES ARE SUPPORTED
My recommendation is that every performance review contains a section that supports the company’s values. This section of the review should have a meaningful weight. The most important aspect of a cultural value section is to provide guidance on “HOW” the employee should performs their job duties. You want results but you don’t want to destroy moral in the process and lose key staff members.

ACTUAL JOB PERFORMANCE IS MEASURED
Too often organizations substitute a laundry list of “skills” as the basis for rating performance. A good performance review will define in an objective and measurable way, the expectations of the job and clarify what it means to perform in an exceptional manner. It will then allow for a measurement of how the employee performs against the standards.

SKILL RATINGS ARE USED FOR DEVELOPMENT
Rating skills is useful for creating development plans but they should not be used to rate an employee’s performance. If you have included a development section in the review, then rating skills is appropriate. But do not factor skills into the review score.

FORMALIZE WEIGHTS & SCORES
It is very important to provide structure within the review so that performance measurement can be as objective as possible. I like to see at least a 30% weight placed on cultural values and 70% tied to actual job performance. Non-exempt staff should be reviewed against actual job performance either based upon their job descriptions or some other type of instrument which outlines performance criteria. Exempt staff typically have defined goals, objects or project based outcomes that should make up the core of their performance reviews. (See my white paper “How to Write Meaningful Goals & Objectives” for more information on this topic.)

DON’T USE REVIEWS (EXCLUSIVELY) FOR MONETARY REWARDS
There are lots of different approaches to using performance ratings to determine pay increases. I would encourage organizations NOT to position the performance review as the sole basis for salary increases. In today’s economic climate, there are many factors that determine salary increases and these factors are typically outside of any individual’s control.

AN ONGOING DIALOGUE
I believe creating an ongoing dialogue between the manager and employee is one of the most value-added aspect of a good performance review process. The review process should be an open discussion that encourages regular feedback about performance, whether positive or negative.

But alas, this is where the process usually breaks down, especially when the performance news is not positive. You must focus on providing timely, accurate and constructive feedback, if you want to use your performance review process to drive individual performance and meet organizational goals.

Author Bio: Tony Rea is managing principal of 20/20 HR LLC based in suburban Chicago, IL. For more information visit http://www.2020hr.com

Category: Business Management
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