We know now that many companies have abolished the traditional Bell curve and have adopted a more flexible and effective continuous performance evaluation process.  That’s good news, right? Yes. But not without a change in the attitude of the management.  It is very difficult to implement and get positive results out of any process without believing in it.

Continuous performance evaluation is an important process to remove unwanted and unnecessary processes and policies along with bridging the gap between the expected and the real performance scenario. It is a continuous process of coaching and feedback resulting in overall organizational growth. This process takes the performance appraisal and organizational development to a whole new level.

Though companies have started using Performance Management applications, using the tool alone will not solve the problem. This minimizes the scope of manual errors and saves a lot of time otherwise wasted in pointless paperwork and follow-ups. This is a positive development. The feedbacks can now be “instant” and more effective than the manual process. But is that all? Would just changing the system change everything? The answer is no. Along with the right process and the software to back the process, it is very important that the managers and the management follow the right approach towards the change.

What is the right approach?

1. Analyze the right kind of process: The major aim of performance appraisal is to communicate the organization’s mission and values effectively. This means the organization must have a system which includes and assesses its core competencies and the skills in the appraisal process. An organization’s vision and values will be taken seriously only when it is visible in its appraisal process. The company also has to decide the frequency of evaluation and feedback. GE went for a quarterly system whereas Adobe felt the need to review every two months. Process selection comprises of the setting of expectations, communicating and aligning employees towards it and reviewing at regular intervals for effectiveness.

2. Keep the process transparent: The evaluation process should be used as a development tool and not only as a method of ranking employees. The evaluation process must be openly communicated to all the employees and allow opinions, suggestions, and feedback during the initial phase so as to make everyone comfortable and at ease with the process. This enables the management to communicate their goals and expectations effectively and helps the employees in understanding how they fit in the organization. As Dick Grote, chairman and CEO of Grote Consulting Corporation and a famous author says “People support what they help create.”

3. Managers act as coaches: Reviewers acting as coaches is true Performance Review, where each day, managers help team members to experience progress at meaningful work. This is very important in an organization. Managers must be encouraged to act as coaches to enable employee development and increased work efficiency. The process not only develops a good employee-manager bond but also helps in minimizing blind-spots in the employee, develops new skills, enhances potential and guides the employee in achieving higher goals. The employee acquires higher motivation and is more efficient in his work. A good coach sets high expectations and goals and motivates and encourages risk-taking to a certain extent and out of the box thinking to achieve goals and solve problems. They should be able to set and monitor milestones and teach the employees to be accountable.

With the presence of a good manager, you will see the entire morale of the team going up, going that extra mile, without even telling when required.

4. Train the Reviewers and Reviewees: Performance appraisals a development tool and should be treated that way. The Reviewers must be taught to plan, delegate, set goals, and to confront performance related issues in an unbiased and neutral way. They should be taught that for an evaluation process to be continuous, they must sit with their team and understand the difficulties involved and learn to play a coach and mentor to them. The feedback process must be frequent and unbiased. Though this process will take time but has an invaluable effect. The Reviewees, on the other hand, must be taught what to expect out of such continuous process and how the goal-setting will be managed and monitored. People can be taught how to take feedback, positive and negative and channelize it. Reviewees should be trained to see Performance Evaluation process as a continuous exercise for their development, rather than once a year form filling exercise.

5. Set short-term goals: Essentially, the frequency of the Reviews. The main problem with an annual appraisal or performance evaluation system is the lack of scope for improvement. When a manager sets a goal at the start of a financial year and tries to evaluate the success at the end of the year there is a big chance that the management fails to see the bigger picture- The actual progress or the lack of it. It is very essential for the manager to set short-term goals and monitor the progress continuously to have detailed knowledge of the performance of the employee and the process involved in achieving.

And regular meetings to discuss various touchpoints do help. Revision of goals, discussion on progress, helps to do not spring a surprise at the year-end meeting and low engagement. Oh yes, please do not forget to make it an easily documented process.

6. Regular Feedback session: Even though we are shifting the goal post on various touchpoints from the year to every 8 weeks or quarter, there should be feedback given related to tasks for better results. When we are a small working group say 8, 10 or 15 people, on the floor feedback is like muscle reflex and helps tremendously. Similar, managers, peers can provide feedback, related to a completed task, an area of improvement, through email or any other communication tool. If the feedback is regular and beneficial, it soon becomes a regular process.

7. Customized Employee Development Plans: Now every organization says that they will be offering the best compensation in the industry. Then what is the difference between you and them? The employee is ambitious and wants the workplace a breeding ground for their talent. I am sure you have career development planned out for them, but the questions are, do they need it? While building products for customers, we are advised to make as per their needs and not what we think will be best for them. Similarly, we need to sit down with them, hear out and develop action plans for them. Obviously, you have to map them with the company objectives and draw the required line.

8. Aligning goals: The evaluation process must be such that there is a win-win situation for the employee and the organization. The operation was successful but the patient died is a worst case scenario, where employees claim that they have performed their duties to the best of their abilities and still the company fails to achieve its target. Let’s not forget that companies are the center of attention and they have hired people to get the work done and not the other way around. Though we talk about employee development, high-quality work and goals aligned with it, we have to make sure that every role is designed to meet the objectives. People have to then analyses that do the role suit their growth plans and take it ahead. Aligning goals are often the crux in making performance management a continuous process because it’s an iterative process, where measure, analyze, the act is part of the cycle.

9. Documenting feedback to remove bias: Having said that, documenting feedback should be as easy as giving it verbally on the floor and I am sure HRTech is and will be taking care of that. But what about the human aspect of it, i.e. giving feedbacks on record? There is a need to keep the continuous feedback and as discussed in some points above, it not only helps to improve upon work but also on making the process iterative. But we need to record feedback to remove any memory bias or remember extreme events. Recording feedbacks are important, just as documenting every activity of your prospect in your CRM tool and even small details matter. It becomes especially important when the workforce is large. This data can then be used to better appraise the employees and provide them with a better work environment. Also removes memory bias or the halo effect towards the most recent activity or performance. Feedback helps in retaining employees as it contributes to skill growth and career advancements. An interesting way of providing feedback is the R.I.G.H.T Methods by Todd Smith, founder of the Little Things That Matter. According to this, effective feedback will be Respectful, Issue specific, Goal Oriented, Helpful, and Timely. Feedback is effective only when given at the right time and at the instant of the action.
10. Separate the Compensation and Performance Reviews: Compensation and performance reviews should be dealt with separately. The moment reviews and Performance Measures have a direct relation to the increment numbers, any of the feedback, the discussion will not be honest. The axe of numbers hanging on compensation will always in their minds. Make compensation dependent on Market Mid, Market Adjustment so that the salary becomes dependent upon the local geographic area. Organizations which link performance reviews with salary increments, promotions and performance bonus doesn’t fair well with employee performance as the feedback tend to be biased and prone to forced rankings. This decreases employee morale and increases a negative attitude towards the feedback and reviews given to them.

Walk the talk is important, and if any of the above methods are not followed, technology will not be able to help you either. We have at Performance Management like this: You hired the best talent, now what after that? You need to develop it, enhance for better productivity and to retain. If we talk about developing someone’s skill over time for better results, it will be better if we look beyond one-time feedback. Not only to work performance, but your Gym workout also needs regular feedback from your trainer, otherwise, it will be disheartening to do the same exercise for a year and getting different results! And most importantly, keep appraisals and Reviews a separate discussion. Then only you can get the most out of Performance Reviews and it will be no longer a dreaded process.

Are you ready to take the next step to make your Performance Review process more effective?