Performance Review Process Broken

A recent survey released by Globoforce shows that most employees feel that the traditional annual review is unfair, and not an accurate reflection of their value to the company. A full 22% never receive reviews at all; almost a quarter of those surveyed said they dread their annual review more than anything else.

In addition, surveys of human resource professionals, managers and CEOs all feel the same way & the process doesn't work and the annual review is ineffective. So why do most companies continue with the annual review? They need a way to evaluate their employees and they don't have a better solution.

Both supervisors and employees want a way to measure progress, set and make goals, and reward employees. Here are six steps to a better review process, resulting in clearer, more professional dialog about company expectations and employee desires.

1. Measurable Goals: Taking the subjectivity out of performance reviews makes the process better for both parties. Obtainable, measurable goals. Some companies design point systems that are 100 percent with the employee's control. For example, attending a class, a seminar, finishing their part of a project on time. Points are tallied and can be used to offer raises and bonuses.

2. Weekly / Monthly / Quarterly Meetings: Today's fast-paced businesses need the flexibility to change, and the annual review doesn't allow for that. Think of reviews as a continuous process, a form of back-and-forth that keeps everyone on pace to reaching their goals.

3. 360 Approach: Reviews should include all aspects of an employee's contributions, and therefore include the contributions of managers, peers, customers and others who are impacted by the employee. It should be assumed that everyone wants the company succeed. When that is the case, everyone wants their co-workers, supervisors and employees to succeed as well. The 360 approach encourages everyone to 'have each others back,' as it were, and in the process it often ends up that everyone is receiving constant (though informal) feedback.

4. Improved Documentation of Changes (hire, fire, bonuses, and promotion): One of the purposes of the annual review is to document changes in the employee's status. If there is a situation that needs to be documented, positively or negatively, there needs to be a process in place to handle it, including recording the incident in the employee's file.

5. Train Managers on Review Process: Develop a strategic process, from human resources down through supervisors, and then train everyone on how to use it.

6. Action Plans: Time should be given before the review process for the employee to develop a going-forward action plan. This can be reviewed in a 360 fashion, and then ultimately reviewed and refined between the employee and the supervisor. The final plan will reflect realistic goals, fulfill the employee's need for personal development, and line up with the companies needs. The action plans should not be static documents, but rather fluid plans that are often revisited, revised and tweaked.

Using a well rounded, 365-day approach to evaluating employees is better for the employee and helps to uncover the true nature of an employee's work and worth to the company. You may be surprised to discover the talent right in your own company!

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