I’ve been working with a client that has decided to “throw out” their traditional performance review process. This organization is undergoing a culture shift in response to the collateral effects of the pandemic. They decided to stop grading individual performance in large part because their organization shifted to a hybrid, mostly virtual work environment. The company is hoping that a less formal process will build trust and lead to higher employee retention.
Calls to ditch outdated performance evaluations have gained traction over the past decade. But when organizations reform their performance process, it’s critical that they not only meet the demands of employees, but also generate meaningful data on how individual performance aligns with positive business results. This can be a tough balance to strike. To help you achieve it, consider these issues as you redesign your performance process.
Without Goals, Meaningful Evaluation Is Impossible
The biggest problem most organizations have always had when evaluating performance is a lack of alignment across the organization.
Several years ago, I worked with a client who wanted me to offer a training course on feedback to help them prepare for their upcoming annual performance review process. When I asked, “Do your employees set performance goals?” they looked at me with a blank stare.
It turns out they were looking for a quick lesson on how to tactfully deliver performance review feedback to employees — not a consistent process for everyday feedback.
While a workshop on giving effective feedback may be well-intentioned, it could do more harm if the feedback isn’t rooted in performance goals. That’s because performance is contextual. What are your people performing toward? Is performance aligned with the organization’s strategy? Is it aligned with the performance of other departments and teams within your organization?
These questions put performance into context and provide the nuance required for productive evaluation. What’s more, if your people aren’t using performance Objectives and Key Results (OKRs or SMART Goals), there is little or no context to aid you in effectively evaluating performance. It’s like running a marathon with no mile markers, no water stations, and — worst of all — no finish line. All great performance begins with clear goals and key results.
More Than a Check-in: Try Regular One-to-one Conversations
Most organizations believe that they have open and transparent channels of communication. But in reality, the way most organizations communicate is little more than status updates and a laundry list of tasks for the week. While effectively executing tasks is part of good performance, it is only the transactional part of the process.
Truly transformational organizations establish a regular cadence of one-to-one meetings between individuals and a team leader. These substantive conversations are more than project status updates and a reading of the tasks, completed or planned, during a given week. Whether you’re meeting in person or virtually, effective one-to-one performance conversations assess the psychological needs and skills of the people working toward critical business objectives — not just the transactional tasks they are performing.
Going Beyond Annual Reviews: Quarterly Performance Assessments
Many thriving organizations practice Quarterly Performance Assessments. These assessments don’t have to be as formal as a traditional annual review, but should cover issues related to an individual’s performance toward goals over the past quarter. They should be a quick and simple review of the past three months, as well as a preview of the next three. These assessments, which are really more like check-ins, should be brief and easy to assess, especially if your organization practices and documents regular one-to-one meetings.
To Grade, or Not to Grade
If you’re not using a traditional grading methodology, how do you measure performance? This is an important question regardless of whether your team is virtual, hybrid, or in a traditional office location. Performance grading systems are tricky because they may erode the psychological safety of some employees if they are used to reward or reprimand employees.
However, you still need to evaluate individual performance in a way that is meaningful to employees and your organization. While a formal letter or number grade is common, there are other ways to evaluate the productivity of a particular performance period. A simple recognition process can honor great performance and bring deep personal meaning to employees.
Reframing the purpose of performance assessments to be focused on celebrating employee success and finding ways to continually improve products, processes, and performance helps your entire organization make these evaluations far more productive.
The Continuous Performance Solution
Organizations are wrestling with how to attract, engage, and retain employees — who in turn attract, engage, and retain their clients. An effective performance process and platform are foundational to meeting the business challenges of both virtual and hybrid work experiences. Setting clear goals that are aligned with organizational strategy and needs sets the context for great performance, while intentional, continual conversations help build autonomy and trust, enabling individuals to feel valued. When organizations evaluate performance effectively, they create a culture of people who are optimally motivated to consistently perform at the highest levels of their potential.