4 ways to improve performance reviews for companies of all sizes
Working for a small company just feels different than working for a large company. Some people prefer working for small companies because they feel they can make a bigger difference, while others like the structure and resources a larger company affords. Either way, we all admit there are some real differences. It’s no different when it comes to managing performance.
From our latest study, we found some major differences in how employees perceive performance reviews at small versus large companies. For simplicity, we divided them into two categories: small companies that have fewer than 500 employees and large companies that have more than 500 employees. From what these employees are saying, here are four ways you can improve performance reviews for companies of all sizes.
1. Get it right. One of the biggest criticisms of performance reviews is that people feel they’re not being fairly evaluated for ALL the great work they do because you’re reviewing work from up to a year before. What about the work your employees are doing now? Are you fairly evaluating them for how they’ve grown and improved? People are proud of the work they do. Make sure you’re evaluating everything and doing it fairly. Small companies are doing a slightly better job at making sure “performance reviews reflect how much value [employees] provide your company”: 26 percent of employees at small companies feel their companies do it “very well” as opposed to only 19 percent of employees at large companies. Clearly there is room for improvement at companies large and small, but appreciating the work your employees do by making sure the value they contribute is accurately reflected in performance reviews is a key motivator for employees.
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2. Really listen. When in a performance review, companies are evaluating employees, of course, but it’s also a great opportunity to learn how things are going for employees. How often do you get to sit down one-on-one with each of your employees? We wish we could say that it is monthly or weekly, but the reality is that it’s probably not as often as you’d like so here’s a chance to find out how employees really feel. It’s not surprising that more employees from small companies (36 percent) feel they are “heard very well” during performance reviews, while 29 percent of employees at larger companies feel that way. At the same time, employees at small companies feel slightly more comfortable being honest (51 percent versus 47 percent at large companies). Perhaps employees at small companies have more informal access to managers and leaders than employees at large companies. Either way, your employees have valuable information to offer so make sure they’re comfortable being honest with you and that you’re listening.
3. Don’t point fingers. Just as we want employees to take our constructive criticism positively and act out changes, we should also react positively when employees rate coworkers and managers and when they let you in on problems at the company. It may come up that things aren’t going so well in a certain department or with a particular boss and when these complaints surface, employees want to feel that you’re offering them a safe place to come forward. Your employees don’t want everyone to know they’re the ones who told (sounds kind of like elementary school, doesn’t it?) so you’ve got to keep it anonymous when you can. Even though large companies are, well, larger and because of the sheer volume of people, employees at smaller companies are more confident that their feedback remains anonymous (70 percent versus 56 percent at large companies). Make sure people aren’t being singled out when being honest so they’ll continue to be honest in the future.
4. Do something about it. When people go out on a limb to tell you how it really is or to be honest when it really would be easier NOT to be, you’ve gotta make it worth their while. Employees need to see changes occur based on the feedback they give during performance reviews. Especially if you see trends arise from several employees, you need to really stop and look at a situation. This may be easier done in small companies, where 49 percent of employees say that their companies address concerns or suggestions raised during their reviews and 43 percent of employees “often see changes occur that come from feedback” given in a performance review. Only 42 percent of employees in large companies feel their concerns are addressed and only 36 percent see changes from feedback occur often. When you can make changes, do it. Your employees will notice. Again, you want people to trust that you care enough to try do something about it when employees open up. Show them it matters.
People want to grow and improve. More employees in small companies feel they get “good feedback that helps them grow” than larger companies. Performance reviews can’t help employees grow if you’re only looking at how they help your company—which is traditionally exactly what performance reviews were meant to do back when they were created and meant to help companies decide which employees to keep and which to fire. Some companies still do that, but what a missed opportunity! Today’s workplaces are more about the people. We’ve learned over time that the best and most successful companies are those that put their employees first. Let’s make employees our priority. Performance reviews are no exception.
For more in-depth analysis on our recent study, check out “Performance Reviews: Who Do They Really Help?” Also, read our accompanying blogs on Gender Gaps in Performance Reviews and Performance Reviews: Differences Between Managers, HR and Employees.