Successful companies with high levels of employee engagement foster a culture of feedback between manager and employee. Annual performance reviews are a traditional method of eliciting feedback but problems can arise when this is the only feedback employees get. Proven success is shown to result from using methods of ongoing feedback couples with annual performance reviews.
Frequent one-on-ones, where both sides provide open and honest feedback is one way to create a system of ongoing feedback.
Frequency builds trust and openness between manager and employee, and when you introduce regular coaching and development within these meetings, you are building a culture where the employee feels supported, and is therefore more likely to open up.
The annual review then becomes a culmination of all the ongoing feedback given throughout the course of the year, and is mainly used as a way to review salaries. Formalising the process gives the Finance department a solid point of reference and place in time to review the financials.
The shift to quarterly reviews
As well as on-on-ones, another way to provide progressive feedback is to establish quarterly reviews. Working in addition to annual reviews, quarterly reviews (which our performance review system allows) enable more frequent feedback and discussion and give more opportunity for timely recognition of wins and high performance.
Annual reviews in isolation are also known to create stress and anxiety for employees. Annual reviews that ask long questions that require essay-like responses are therefore being scrapped in favour of quarterly reviews that ask shorter questions. This style of performance review creates less stress and elicits a better response from employees. Another way to further reduce stress around performance reviews is to use words instead of numbers in assessment scales. For instance replace a ranking of 10 with the word “outstanding!”.
When it comes to tracking performance, time-based goals or KPIs are essential. They ensure that a review is less subjective – less focused on the mistake that happened last week, and more focused on the employee’s overall performance and commitment to their role. But don’t struggle over these yourself if they are not naturally coming to you. A few hours with an HR consultant or a business coach will see some strong, measurable goals introduced. HR consultants can also help you create a system to assess behaviours against values.
HR software is invaluable in helping businesses facilitate the performance review process. Each employee can have set goals and KPIs tracked regularly within a system so that it’s not lost in messy paperwork. When employees have clear goals outlined for them and planned performance reviews, the experience is actually enjoyable as opposed to feeling like a chore.
A company doing performance reviews – the right way
As one of the first companies to make a move to more progressive performance evaluations, Adobe famously ditched its traditional employee performance reviews in favour of a check-in model. In their new model, managers set clear expectations for employees and regular give feedback at a time that suits the employee and the role they perform. This allows managers to make micro-adjustments to employee performance right throughout the working year.
In the first year of this shift, the software giant estimated it saved 80,000 manager hours, the equivalent of 40 full-time employees. At the same time, the company was able to demonstrate higher employee engagement and retention.
Systematic and streamlined performance reviews
A major factor in introducing a progressive and ongoing feedback loop that works means is that it doesn’t create more work for you. In fact, it should minimise it. A continual approach, punctuated with a periodic full review has to be systematised and streamlined.
Performance review software can help you make ongoing performance management a natural fit for your businesses. With features that help create and support personal and company goals, you can empower employees and managers to have meaningful, ongoing performance and career-related discussions.
With a cloud-based HR system, you have access to a full suite of annual performance review documents, and a place where you can record ongoing discussions with the employee about their performance and career aspirations. You can document all check-in discussions, which you can easily access to review and ensure it’s all on track.
Such software also helps you keep a running log of notes on an employee throughout the year. This help you paint a complete picture about the individual’s performance over time so when the annual review comes around, it’s a culmination of all of the ongoing feedback.
Time for change?
It’s important to remember that giving feedback to employees on how they are performing is as important as ever. When employees are recognised, they become happier and ultimately, more productive.
Making performance a natural part of how you work means employees will speak up when they’re struggling or seek help earlier in the process, rather than waiting until the formal review process comes around.
Get reviews right and you’ll have:
- Motivated employees with a clear understanding of their individual goals and how their role ladders up to company goals.
- Top performers who feel recognised, because their progress has been tracked objectively against performance goals.
- Reduced employee turnover and increased engagement.
Employment Hero is the easiest way for small to medium businesses to manage HR, payroll and employee engagement and benefits in Australia. Request a demo today.