Human Resources: Managing Performance

Performance reviews tend to be a dreaded experience in many organizations. Employees often feel anxious and stressed about the annual conversation, fearing it will focus solely on their mistakes from the past year. Meanwhile, managers often dread the process of spending significant time trying to recall a year’s worth of performance, fitting it into a lengthy “one-size-fits-all” form, and assigning a rating based only on what they can remember.  

While the employee and manager struggle through the exercise, research also tells us that annual reviews are not effective at improving employee and organizational performance. So what can be done differently to drive improved results?   

The first step is changing the frequency of the conversations.  Rather than only having one conversation during the year, managers and employees should engage in frequent conversations about performance. This is not intended to mean the “annual review” conversation should be repeated several times throughout the year. Rather, managers should build regular conversations about performance into the year to ensure they are having those discussions with each employee on an ongoing basis.   

Regular, ongoing dialogue about performance can take place in many forms  — impromptu hallway conversations, lessons-learned discussions after a project, and dedicated meetings where performance is the primary topic. Regardless of the form, the key is to have these conversations on an ongoing basis rather than only once (or twice) per year. 

If managers are talking with employees about performance more frequently, what should these conversations look like?  

Ongoing conversations around performance should hit the highlights of what’s gone well recently, what hasn’t gone so well and what’s on the horizon. Employees and managers should be discussing progress on goals, as well as what managers can do to remove any barriers or roadblocks that are creating challenges for employees.  

It’s important to focus on what’s ahead as well as discussing past events. We can’t effectively drive our cars only using the rearview mirror — we need the windshield as well. Discussing what’s occurred in the past as well as looking forward to what is next equips employees with the support and guidance they need to continuously improve.    

While one conversation a year about performance isn’t effective for any generation, we also know that newer generations in the workforce are looking for increased feedback. Increasing the dialogue around performance only helps to make these conversations more comfortable and creates an opportunity to provide real-time feedback. This allows employees to adjust along the way, rather than finding out months later their approach wasn’t effective.  

This feedback should include areas for improvement as well as what is going well. Employees need to hear examples of how their approach is working, what they are doing to foster collaboration and when they communicate effectively. The more specific the better. Sharing the details around what went well allows employees to clearly understand behaviors that are helpful for future success.   

These regular performance conversations should also include an opportunity for employees to give feedback to managers on what they can be doing to better support employee success. Many times, as managers we are unaware of ways we can manage our employees more effectively or approaches we might be taking that are creating additional challenges for our employees. Creating an opportunity for open, honest, two-way dialogue allows employees and managers to work through any differences in style or approach. If we don’t know what’s broken, it’s hard to determine how to fix it.  

These manager feedback conversations are not to excuse underperformance. They are simply a way to encourage discussion around ways managers can further support employee success.  

Research and experience tell us that the annual performance review is highly ineffective. Regular conversations around performance result in improved performance as well as better relationships between managers and employees. Rethinking how often managers discuss performance with employees and what to include in these conversations is key to seeing improved individual and organizational results.  

Bethany Denning is a certified senior professional in human resources (SPHR) and is a partner in the Lexington human resources firm of People Pinnacle (peoplepinnacle.com).