According to a recent Gallup poll, only 14% of employees believe that performance reviews actually inspire them to improve their work processes. In fact, only 1 in 10 employees think their performance is managed in a way designed to support their current efforts or prepare them for future promotions. This view of performance reviews permeates across a diversity of professions in the United States. As a result, progressive companies like Netflix and Microsoft are starting to change their approach to performance rating reviews.
If managers want to get more from employees, they have to add value to the performance review process. Gallup’s look at high-performing teams, reveals that employees want performance rating reviews to be fair and accurate, achievement oriented and developmental. According to the study, only 29% of employees agreed their performance reviews were fair, and a mere 26% strongly agreed reviews were accurate.
Review givers should build fairness and accuracy, achievement and development into their performance review process, interviews, questions and follow-up around these principles in order to motivate employees to correct non-productive behavior, continue productive behaviors, and to aim for higher levels of achievement.
Here are 11 tips to make performance rating reviews motivational and profitable.
- Give Frequent Reviews. "Don't catch your people off guard in a performance review," warns Erika Rasure, assistant Professor of Business and Financial Services at Maryville University. One major reason employees dread annual reviews is because they only come once a year (if that often), or show up unexpectedly. And when the annual review does come, more often than not, there are negative annotations that precede it. No one is happily anticipating being locked in a room with one or more managers ready to pick apart their yearly performance. This sort of negative build up can be diffused if performance rating reviews occurred frequently throughout the year. This increases the number of times management speaks with employees and fosters an opportunity to address potential issues faster and with less effort than a once a year meeting. For mid-sized companies, twice a year or quarterly meetings are recommended for employees.
- Make Goal Setting a Priority. Get your employees invested in their own success. If a company is mid-sized or large, employees can easily feel like a number. It is incumbent upon management to not treat employees as if they are a means to an end. Give your employees a purpose, not just responsibilities. A since of purpose is a proven motivator for boosting performance. Setting goals with employees and creating individual career development plans gives them a guide to follow and a hand in their own success. This approach is beneficial to managers and employees. While managers define and monitor job responsibilities, employees provide real-time feedback on how corporate policies are working (or not working) in the field. This gives employees a say in how they do their jobs.
- Re-frame the Conversation. Managers should consider changing the language around performance rating reviews. Gallup recommends using the term “progress reviews” instead. Progress reviews are designed to continuously improve employee performance. Conversations are structured around opportunities to succeed and improve, not just around feedback. Unfortunately, only 30% of employees believe there is someone at work that is actually invested in their development.
Make sure your progress reviews include recognition of employee achievements and helps them see opportunities for growth. This enables serious discussion on what success looks like in their position. In order to attract and retain the best talent, managers must prioritize their developmental needs, desired experiences and long-term goals.
- Share the Performance Rating Review Format. Share the performance review format with your employees so they know what to expect during the review. Explain the structure of the review as well as the ratings system and requirements for certain ratings. According to Your Office Coach.com, performance reviews should discuss 4 main topics:
- Past job performance
- Future plans and expectations
- Developmental goals
- Employee needs and concerns.
The more prepared your employees are for the review, the more comfortable they will be during the review which will enable faster and perhaps more honest conversation.
5) Prep for the Discussion. Managers should prepare for the performance rating review. This is your opportunity to make a good impression on your employees, especially if you don’t communicate on a daily basis with them. Keep notes about each employee organized, along with comments from their supervisors that you can mention in the review. Prepare some thoughts on how to set goals for each employee and have some suggestions on how to help them improve in deficient areas. Constructive criticism is not productive without solutions.
6) Do it In Person. Performance rating reviews should be done in person. It is hard to motivate employees via Skype. If you are the head of an organization, showing up in person lets employees know you care about their development and ultimate success in the company.
7) Make it a Conversation. Approach the performance rating review with a spirit of enthusiasm. Create a motivational environment that serves to inspire employees, not punish or judge them. Motivational performance reviews are a two-way discussion. Design your review around your employee so that he or she is talking most of the time. This will give them a feeling of control. Some conversational questions could include:
- What are your goals for this quarter?
- What would you like to achieve with the company this year?
- What support can we provide to help you reach these goals?
- How can I be a better supervisor for you?
- How often would you like feedback?
- What developmental opportunities would be helpful to you?
- Are there any resources we can provide to make your job easier?
- What resources did you have at former jobs that you wish you had for this job?
- Make the Conversation Empowering. Harvard researchers discovered that employees who feel empowered at their jobs tend to perform better. When conducting your performance rating review, invite employees to explore ways in which they can have more autonomy in their daily routines. Employees enjoy a little autonomy in their jobs, but too much autonomy can lead to confusion or distress so be discerning. Once employees are given parameters in which they can exercise autonomy, many may perform better at tasks that they underperformed before the review
- Be Honest. No employee is perfect, and there will always be room to grow. For this reason many companies discourage managers from scoring an employee with top scores across the board. Remember – the point of a performance rating review is to motivate and empower your employees, that can’t happen if managers are not honest. This doesn’t mean to be cruel or unfeeling. On the contrary, reviewers need to show compassion and empathy towards employees. Still honesty about an employee’s shortcomings or underperformance is crucial to creating action plans to address them. Tip-toeing around the issue will be a disservice to you, your employee and the company. James R. Bailey, a professor at George Washington University School of Business, notes that honesty in performance rating reviews is the best policy. Consider how you’d want your supervisor to give you feedback and be thoughtful with your words. End the review on a note of mutual understanding and respect. No one can be motivated to perform better if they feel berated, misunderstood or disrespected.
Remember to encourage your employees and express gratitude for their service and labor. Acknowledge that they could have chosen any company to work for, and you appreciate that they chose your company. Appreciation is a proven motivator. It adds an extra boost to good reviews and takes the sting out of bad reviews. When done right, appreciation can even push underperformers to new levels of success. Positive reinforcement can go a long way in giving workers the confidence and drive they need to perform even better.
10) Be Careful With Your Words. James E. Neal's, "Effective Phrases for Performance Appraisals" (Neal Publications, 2009), discusses 5 words and expressions that will motivate employees by emphasizing their contributions to the company or team.
- Improvement: Look for areas or examples where employees have grown. Always search for opportunities to praise employees, they like hearing it. Phrases like, Henry “continues to grow and improve," and "is continuously planning for improvement" are two motivating phrases to use in your performance rating reviews.
- Achievement: Incorporate “achievement” into a phrase like, Sally "achieves optimal levels of performance with/for ... "
- Creativity: Managers don’t praise associates for their creativity enough, especially in fields that are not particularly artsy such as banking or retail. Appreciating creativity is an excellent motivator and can bring great satisfaction to employees who desire to work on more than spreadsheets. In your performance review, try the phrase "seeks creative alternatives," followed up with specific examples for emphasis. This encourages employees to continue to think outside the box.
- Communication skills: Effective communication can be a challenge for employees and managers. Recognizing your employee’s ability to communicate with management and staff will motivate them to continue communicating and seek for ways to improve it. Use phrases such as, "effectively communicates expectations," or "excels in facilitating group discussions" when writing notes in your performance rating review.
- Management ability: A good manager is always looking for their predecessor. Search for opportunities to discuss your employee’s leadership abilities. Not only should you recognize leadership in the performance rating review, recognize it in public. Public recognition and private (to a lesser degree) will motivate employees to be leaders. Having leadership skills is vital for employees who want to move up into higher positions within a company. This is a great opportunity to discuss career development plans to see if moving to a higher position is in the cards for certain employees, and how you can help that employee reach that goal. Incorporating phrases like, "provides support during periods of organizational change" can go a long way with employees.
- Ask For Feedback. Performance rating reviews are opportunities to meet with your employees face-to-face and motivate them to be better versions of themselves at the workplace. Seek out feedback from multiple sources about employee performance. Call up past clients, consult customer surveys or reports, and talk to supervisors. You can also get feedback from co-workers of the employee. This is called, 360-degree feedback, for a more comprehensive picture of your employee’s performance.
Once the review is over, ask for feedback about the performance rating review itself from the employee. Here is your opportunity as a manager to learn where you can improve to make the review process more impactful and motivational for your employees.
If you want to make your performance rating reviews more motivational, employees must feel that reviews are beneficial and helpful to their self-image and goals. Frequent reviews keep improvements and encouragement top of mind for employees. If they see reviews as an opportunity to celebrate successes and to find solutions to shortcomings, employees are far less likely to dread performance reviews.
As a manager, it is your duty to ensure you have enough data to make a fair determination about an employee’s performance. Plus you must present a game plan to address any criticisms or areas of improvements presented in the review. This will give employees feasible, measurable goals that will take them to the next level in their careers. If you adhere to these 11 tips to give performance rating reviews that are motivational, you will experience more rich, happy and fulfilling relationships with your employees which translates into healthier profits for your business.