A while back, I posted a blog stating that performance reviews were broken and was surprised by the responses from customers and readers. I learned performance reviews are a topic that people care about. A lot.
That’s why we decided to focus our efforts on performance reviews on our latest survey—to dig down and get to the root of the problem. In May, we surveyed 1,933 people over the age of 21 who are currently employed in companies over 50 employees. First off, we found that 42 percent of respondents’ companies aren’t doing employee performance reviews at all. Of the other 58 percent, 89 percent argue that their companies benefit from performance reviews. But that’s the important thing to note here: Companies are benefitting, not employees.
Performance reviews can be traced back as far as fourth-century China and have been used routinely in the US since the Industrial Revolution, but they’ve always been a tool to help companies know which employees were performing well and which weren’t. That way, they could fire those who weren’t quite cutting it. Yet, no one ever claimed that performance reviews were meant to help employees. And that’s where performance reviews are failing us today.
Our employee-focused workplaces are feeling the struggle (and really, that’s where most of us are because we know that our employees’ happiness is linked with our company’s success). While 75 percent of respondents feel they get good feedback during performance reviews, they don’t get much help implementing the feedback. Here’s why only 16 percent of employees want to receive feedback at their performance reviews:
· 67 percent feel they’re not heard during their reviews.
· 62 percent don’t ever see changes occur from feedback they give during reviews.
· 61 percent say their companies don’t look for opportunities to provide career development for them.
· 56 percent say they don’t receive raises or bonuses when they perform well.
· 55 percent say their companies don’t ever address concerns they brought up during their reviews.
· 52 percent say their companies don’t help them either make or meet goals.
What it really comes down to is that instead of motivating and engaging your employees (only 4 percent feel that performance reviews are doing this), employee reviews are frustrating employees. Your people prefer to be inspired and motivated in the following ways:
· Open, informal conversations
· Getting raises
· Having one-on-ones geared toward career path
· Managers listening to their ideas and using them
· Getting more employee recognition
What does HR think about performance reviews?
You might not be surprised to learn that HR finds the practice of doing performance reviews (70 percent find them “very valuable”) more valuable to the company than the average employee does (only 24 percent consider them “very valuable”). However, we still have plenty of criticisms. Three out of four HR professionals have criticisms with performance reviews. Here are the top 5:
1. They create a culture of competition, rather than collaboration.
2. They create unnecessary politics.
3. They are an inaccurate reflection of performance.
4. They hurt engagement and innovation.
5. Nothing constructive comes from performance reviews.
Performance reviews are changing.
Because companies changed and our workplace has changed, performance reviews must change as well. Leaders know now that their companies’ success depends on employees. Let’s get our employee-focused workplaces in line with performance management.
Performance management should benefit both companies AND employees. To do that, they should
· Be simple. Managing performance should be an everyday experience with ongoing guidance and frequent recognition. Not a major project once or twice a year. Frequent check-ins that feel more like conversations will help you know how engaged and challenged they are. You can impact performance today.
· Accurately reflect performance. How are employees performing this month, this week, or even today? Not six months ago or last year. Don’t wait months for the next scheduled performance review to bring up an issue or reward an employee. Details will be lost or seem irrelevant and won’t accurately reflect performance. Feedback should be timely and frequent.
· Inspire & motivate. Don’t lose a chance to motivate and inspire employees today or help support their long-term goals. You should help employees set goals and be following up often.
In HR, our goals are two-fold. We want to see our people successful and that, in turn, creates successful companies. Performance management will adapt. You CAN have performance management that benefits both!
If you’d like to dig deeper into the results of the study, you can download the survey summary. You can also read our specialized blog posts on gender gaps and differences between managers, HR and employees in performance reviews.