People love to hate performance management, especially annual performance reviews. It seems like every week there’s a new article bemoaning another pitfall of certain performance management strategies.
And they make valid points – there are a lot of issues with performance reviews and most of them revolve around how subjective performance decisions are and how easily bias can sneak into the process and negatively impact the fairness and accuracy of reviews.
But annual performance reviews won’t be (and shouldn’t be) going away anytime soon. After all, the alternative to performance reviews is not having performance reviews… and that’s a great way to put an organization at risk for compliance issues every time an employee receives a merit increase or is promoted, demoted, or terminated.
So, instead of throwing another “performance reviews suck” article out into the abyss, let’s talk about a few tweaks that you can make to your performance strategy that can help you jumpstart – and improve – your annual reviews.
1. Rethink your ratings scale
The research that’s out there has found that most people perceive themselves as “above average” (even driving). So what does this mean for your performance scale?
For one thing, Gallup has found that only 14% of employees agree that their annual reviews inspire them to improve performance. This could be because most employees are not motivated when they find out that they’re “average” or “meets expectations” or most other standard performance rating naming conventions.
A simple way to change the perception of ratings is to move to a naming convention that focuses more on development.
For instance, you can change a three-point scale to:
- Off Year
- Achieved Goals
- Off the Charts Achievement
This simple adjustment to your rating scale can help mitigate the post-review engagement slump by using more positive, development-focused language to describe the different performance levels.
2. Prioritize ongoing feedback conversations
By documenting ongoing feedback throughout the year, managers and employees can leverage that information to better inform their annual reviews – and mitigate recency bias.
Because recency bias is likely the strongest and most common form of unconscious bias that impacts performance reviews, tracking ongoing feedback is one of the most powerful ways to make performance reviews fairer and more holistic. And organizations can make ongoing feedback a priority and increase employee adoption by creating a successful launch plan and leveraging an easy, user-friendly solution to track feedback and ongoing performance conversations.
What is recency bias? The tendency to base opinions and decisions on more recent events.
For employees, it’s difficult to remember what projects you were working on or how you were performing 6 months ago. And for managers, you have the added complexity of trying to remember how your direct reports were performing 6 months ago – so you can see how an annual review may only accurately reflect the last few months. Having an archive of feedback can help managers better recall employee performance milestones from 12 months ago that have since been forgotten.
3. Use quantitative data to support reviews
A major reason why employees don’t like annual performance reviews is because as I already mentioned they don’t believe that they’re a fair and accurate assessment of their performance. And that’s largely because many organizations still rely on manager intuition and discretion to inform their performance decisions.
In fact, Gallup also found that only 29% of employees strongly agree that the performance reviews they receive are fair, and only 26% strongly agree they are accurate.
Leveraging consistent, quantitative data points can bolster confidence in performance reviews, better align ratings across the organization, and make it easier for managers to justify performance decisions – or mitigate “halo” or “horns” bias.
What is "halo" or "horns" bias? The tendency to allow one trait, either good (halo) or bad (horns), to overshadow other traits and influence someone’s perception and opinion of another person.
For example, organizations can set a goal for employees to increase their reliability by 10%, leverage time and attendance metrics to track progress towards that goal, and ultimately collect better information for annual reviews.
4. Focus on how work gets done
No one likes to work with jerks, but sometimes jerks in the workplace get a pass because they’re exceptional performers. However, keeping jerks around the office (and giving them raises for great performance) can be detrimental to the rest of your organization. And a number of organizations, like Atlassian and Netflix, have been vocal about their “No brilliant jerks” policy.
Especially at organizations where teamwork and collaboration are critically important, performance reviews that incorporate how work gets done (aka competency models), can help ensure that these values are not sacrificed in favor of performance.
For example, here at Kronos, a large percentage of our annual performance review is based on our “Kronos Effectiveness Index” which is a competency model that rates employees on how we communicate and collaborate with others, how we tackle problems, and how we serve our internal and external customers.
Conclusion: Small adjustments can make a big difference
Small tweaks to your performance strategy can help mitigate bias, increase employee satisfaction, and better align performance with business objectives. Learn more about how you can improve your organization’s performance and elevate your employee experience to stand out in a competitive job market in our latest eBook.