Performance Management - One More Thing

With the end of the year coming up, it's not uncommon for many organizations to be engaged in end-of-the-year performance reviews. I've already written several posts regarding performance management, and one thing is clear from the articles I have read and blogged about, performance management is LOTS MORE than the performance review. But the review is a common if not totally necessary part of the process, so this post I thought I would pass along some advice on doing building a better performance review process. These thoughts come predominantly from an article titled "Reviews - Good for Anything?" by Jathan Janove in the June 2011 issue of HR Magazine. 

One of the problems with performance reviews are their reliability. Often, managers fail to rate an employee honestly, resulting in scores that are inaccurate. This can lead to a host of problems. For example, if you fire an employee for poor performance, but their performance reviews say differently, you run the risk of a law suit that may be difficult to defend against. Maybe considered less often is how inaccurate reviews effect training and development. If a review accurately describes the deficiencies of an employee, those deficiencies can be targeted for development to help the employee. But when everything looks "great" then employee development suffers as a result. In some circles performance reviews are so maligned that some have suggested we get rid of them altogether (see Samuel Culbert's book, "Get Rid of the Performance Review!" as an example). 

So should we get rid of the performance review? If we are going to do a poor job of it, and the ratings are going to be superficial at best, then the answer is probably "yes." They may actually become a liability. But there are few things we can do to improve the system to make performance reviews more accurate and useful. Janove (2011) suggests:

1. Make the system user-friendly. Complicated systems of competency ratings and categories with subcategories just confuse people and make the task that much more of a burden. A person can only focus on so much at one time, so simplify to the most important goals and then focus on those. 
2. Don't let the review be a surprise. The performance review should be a summary of the performance periods performance (i.e., a year), not the first time the employee has had any notice of their performance. When they sit down with their manager to review the appraisal, they should know exactly what to expect. 
3. Be consistent across the organization. The system should rate employees in similar type jobs in pretty much the same way. Managers need to be trained on how to use the system and wild fluctuations in rating standards should be eliminated. And the frequency of informal and formal reviews should be about the same across the organization.
4. Be honest with employees. We must get our managers to be totally up front with employees, even if it means breaking bad news. No one wins when poor performers are let off the hook, not even the employee. And this honesty should include both positive and negative components of an employee's performance.
5. Keep the eye on the future. Performance reviews are about the past, but they should be given with an eye to the future. What's done is done. Train managers and employees to work on rectifying performance issues going forward, rather than dwelling on the past. 

In the end, we owe to the organization, the employees, and to ourselves as HR professionals to do more accurate performance reviews. So maybe getting rid of them is a bit extreme, but certainly making them easier and better is not.