Performance Reviews Done Right

Performance reviews are often viewed as ineffective and a waste of time. According to a McKinsey survey, most CEOs feel performance appraisals fail to accurately identify top performers, while over half of employees believe their managers don’t get the reviews right. A Gallup study reports that only one in five employees feels motivated by their company’s performance review process. These negative perceptions, however, can be reversed with a performance management approach to reviews that actually results in improved employee performance.

Given the dissatisfaction with traditional reviews, it’s essential to rethink how these appraisals are conducted. Simply eliminating performance reviews isn’t the solution, as many companies that have tried this approach found themselves reverting to “ghost ratings,” essentially returning to performance ratings in all but name. However, by approaching reviews using performance management best practices, they can be enhanced. Begin by implementing:

• Accurate and actionable feedback: Rather than vague judgments, focus on specific behaviors and outcomes that employees can improve upon.
• A development and growth mindset: The review helps employees identify areas where they can develop their skills, driving long-term career growth.

1. Write the Review 
   Prepare a concise document comparing the employee’s performance to pre-determined goals. Include accomplishments, strengths, opportunities for improvement, and actionable feedback. Ensure the feedback is clear, unbiased, and based on measurable performance. Keep in mind McKinsey's 2023 Women in the Workplace report, which found that 87 women were promoted to manager for every 100 promoted men, and the gap is even bigger for women of color.
2. Prepare Thoroughly for the Meeting
   Organize your feedback well before the conversation. If you're going to have a tough conversation, it might be helpful to practice it with your manager beforehand. Schedule the review well in advance to allow both parties time to prepare. Use a checklist to cover key points and keep the meeting focused.
3. Start with Positivity and Intent
   Begin the conversation by setting a positive tone. Reinforce that the review is about helping the employee grow. Address both strengths and areas for improvement with a constructive lens.
4. Discuss Specific Examples
   Cite specific examples of behaviors and outcomes to help the employee understand their performance. Avoid vague statements and focus on behaviors within the employee’s control. If you find yourself generalizing by, for example, saying something like, "People really like working with you," find a specific example to back this up.
5. Focus on Development, Not Compensation
   While reviews may influence salary decisions, the primary focus should be on the employee’s development and future goals. Separate discussions about pay from the performance review will keep the conversation productive.
6. Encourage Employee Input
   Make the review a two-way dialogue. Ask the employee for feedback on their performance and their experience in the role. This ensures they feel heard and engaged in the process.
7. Follow Up and Set Future Goals
   After the review, document key takeaways and set specific, measurable goals for the next period. Schedule follow-up 1:1s to track progress.

While performance reviews offer a structured moment for feedback, they shouldn’t be the only time employees hear how they’re doing. Continuous feedback throughout the year is essential for reinforcing the progress made in formal reviews. According to Deloitte, organizations that adopt frequent, informal feedback loops saw a 28% improvement in employee performance.

Regular 1:1s between managers and employees provide an opportunity to:

• Discuss roadblocks: Employees can address challenges they are facing in real-time.
• Adjust goals: As projects evolve, goals may need to be refined to stay relevant.
• Provide timely feedback: Offering feedback closer to when events occur makes it more actionable and less likely to be viewed as an afterthought.

miviva’s performance management platform streamlines the review process, making it easy for managers to provide real-time feedback and track progress year-round. With miviva, managers can:

• Automate check-ins: Set up regular feedback sessions without relying on annual reviews alone.
• Create goals: Develop personalized goals and track performance against them over time.
• Centralize performance data: Keep all feedback, goals, and performance metrics in one place for easy reference.

This ensures that reviews are easier to manage and more meaningful, creating a culture of continuous improvement.