Employee performance reviews are important for businesses of all sizes. Organizations that know how to conduct team performance reviews encourage positive behaviors. This makes the whole system more effective and focused.
Firms that invest in learning how to conduct team performance reviews empower managers to effectively lead teams. By setting goals and conducting team evaluations, these businesses help employees discover growth opportunities and areas of improvement.
In this article, we define performance reviews, identify the current problems with team evaluations, and share some performance review best practices.
What’s a performance review?
A performance review is a two-way conversation between an employee and a manager about the employee’s performance, growth, and development. It’s not an occasion to merely find faults and give vague recommendations. It’s a dialogue customized to the unique requirements, skill sets, and performance impact of the employee.
Performance reviews used to be conducted once a year, focusing on past performance. But increasingly, firms are of the opinion that modern performance reviews need to be more regular and should be focused on improving the individual’s future performance.
The problem with performance reviews
Unfortunately, not all businesses understand how to conduct team performance reviews, leaving both employees and leaders dissatisfied. McKinsey found out that most CEOs believe that their performance reviews don’t help them discover top talent.
More than half the employees think that their managers don’t do performance reviews properly. According to Gallup, only 20 percent of employees believe that their performance reviews motivated them.
It’s not difficult to understand why performance reviews have become ineffective. They’re now considered as occasions for announcing compensation and giving generic feedback. Both managers and employees believe that these are perfunctory, unavoidable, and ineffective.
It’s also important to keep in mind the changing work models and increasing complexity of projects. These leave managers ill-equipped to spend adequate time assessing an employee’s impact and suggesting viable routes for development.
When there’s no emphasis on learning performance review best practices and when they have neither the time nor meaningful organizational endorsement, managers tend to view team evaluations as nothing but cursory reviews. This creates a vicious cycle of lack of accountability and underperformance.
What this means is that there’s an urgent need to rethink how to conduct team performance reviews that benefit employees, managers, and the organization.
12 performance review best practices
These tactics will help you create more impactful and engaging performance reviews.
1. Increase their frequency
If you want to learn how to conduct team performance reviews, the first step is to look beyond the conventional annual review and make them more regular. You should have quarterly or monthly reviews, along with the traditional year-end review.
Regular interactions bring employers and managers on the same page and help each other give more objective assessments. By giving timely feedback, managers can make positive impacts on the employee’s performance. Although it might seem cumbersome at first, it’s good to know that once they become regular, these reviews don’t have to be lengthy affairs.
2. Make them conversational
One of the most important performance review best practices is to make the process more conversational and engaging. Far too often, employees either dread such team evaluations or are indifferent to them because they tend to be critical and even punitive in nature.
Managers should view performance review conversations as opportunities to work with employees to chart a clear growth path for them. They should also appreciate and recognize the employee’s efforts and not just focus on the shortcomings. This makes the process more engaging and promotes trust.
3. Keep the focus on the future
One of the biggest problems with team evaluations is that managers tend to focus on the past. The topics include how the employee performed in the previous year, what they did right, and what went wrong. But neither the employee nor the manager can change the past.
To make performance reviews more engaging, the focus should predominantly be on what can be done in the future. Should the employee learn more about a domain? Should they improve their soft skills? These questions lead to fruitful conversations that can improve the employee’s performance.
4. Make them transparent
Understandably, performance reviews are stressful for employees. Since it affects their compensation, they would be anxious about the whole process. The solution is to make them transparent and involve employees in the process from early on.
Firms should establish the criteria for evaluating their employees. Involve them in the planning and preparation stage, and tell them what topics you would be covering. This allows employees to know what to expect and how they can contribute to the discussion.
5. Use data and remove bias
When you learn how to conduct team performance reviews using data, you’re making the process more objective and credible. Include data from multiple sources such as task completion figures, goal progress, 360-degree feedback, recent recognition, one-on-one reviews, talent review ratings, etc.
A performance review should be about indisputable figures and not filled with generic comments. Managers should only make data-backed statements. This will go a long way in removing any inherent bias.
6. Choose the right environment
Along with the managers, employees also have to be in the right emotional state for a performance review to be productive. Employees need to feel listened to in these sessions. For that, it’s important to have the right environment that makes them feel both at ease and respected.
Whether you choose an open-or closed-door meeting will play a huge part in the success of a review. Managers should note whether others will be able to see or hear them during these meetings. Time, noise, location, and comfort levels should all be taken into account to make team evaluations more engaging and meaningful.
7. Align the expectations of the employees
As you learn more about how to conduct team performance reviews, you’ll understand the importance of allowing the employees to prepare for the meeting. They should know the agenda beforehand, along with the time and location of the meeting.
Employees should be aware of what they’re expected to bring to the review including information about their projects. They should also know about their responsibilities after the meeting.
8. Ask the right questions
Learning how to conduct team performance reviews is about asking the right questions. These should be intended at getting to know the employee. What you want is honest feedback that leads to actionable insights.
You could ask about their accomplishments from the previous quarter, goals for the next quarter, career development plans, any obstacles that stand in their way, the impact they believe their performance has had on the organization and their team, etc.
9. Use constructive language
The language you use in a performance review will decide its mood and tempo. Managers might unwillingly use accusatory language that would disengage the employee from the process. Instead, it’s wise to focus on considerate and thoughtful phrases and words.
Use specific phrases that are constructive and positive. Don’t use language that might come across as judgmental. Try to find solutions to problems and avenues for growth. Watch out for bias in your phrases and always be respectful and encouraging of performances.
10. Always be an active listener
If you’re looking for performance review best practices, you could start by being an active listener. Remember that the session is intended to be a two-way conversation. All the data that you have gathered shouldn’t blind you to the fact that the employee should also be allowed to speak.
Listen without interrupting and allow employees to give any contextual information to state their case. Wherever necessary, ask follow-up questions with the aim of getting relevant information.
11. Be a mentor
Great managers tend to be great mentors. And when you learn how to incorporate that into a performance review, you’ll make the process more effective. More than anything else, this calls for a change in mindset.
See opportunities and problems from the point of view of the employee. Suggest solutions that they can implement. Point out areas of improvement while being realistic. Use encouraging body language and always be empathetic to what they have to say. Let them know that you want them to succeed and grow.
12. Create an action plan at the end
A performance review isn’t a one-off event. It’s part of a process to develop talent to accomplish business objectives. That isn’t a short-term activity. It requires an action plan along with organizational and managerial support.
After the conversation, formulate the next steps, review your notes, and go through comments and feedback. These will help you create a viable plan that inspires the employee to resolve issues if any and perform well.
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