Monday, May 2, 2016

What is the Purpose of Performance Reviews?

A cartoon boss addresses his employee: "Your evaluation is based on the next 30 seconds. Go!"

In which direction should the employee in the cartoon run? On what will his evaluation depend in the next half minute? The goal is unclear and the employee looks rightfully paralyzed by the lack of clarity from his boss. Do you see any parallels here to the way performance reviews are handled at your firm?

Our employee engagement research tells us that less than 1-in-5 companies are satisfied with the way performance management is handled at their company. It has been a long time since we worked with an organization that felt that their performance management process was worth the effort or was a major component in creating a high performance culture.

We think organizations need to get back to performance basics instead of wasting time and money on complicated performance management systems and processes. What, indeed, is the purpose of performance management?

At LSA Global, we believe that the fundamental purpose of performance management is to:

Create clear and agreed-to performance expectations
Align individual contributors with the overall strategy of the organization 
Fairly and consistently expose individual, team and organizational performance so everyone knows where they stand
Enable targeted coaching and professional development opportunities

Ideally, performance management should be an ongoing component of your high performance culture. Employees should expect timely, constructive, relevant and helpful feedback on a regular basis. The once-a-year review does little to change behavior on the job. And it does a lot to discourage efforts to improve. Few are happy at their conclusion. The manager has struggled to put the report together and the employee only hears the negatives. What is to be gained by such a painful encounter? Not much.

Take a good long look at how performance management works at your company. Make sure that your managers know how to give feedback that is well received and acted upon. Do they set clear expectations for performance? And do they hold their team members accountable for meeting the standards for performance? If ever you aspire to build high performing teams, setting up a proven performance management program (and getting your managers prepared to drive it) has to be your first priority.

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