Many leaders dread the performance review process. Leaders are highly focused on performance outcomes and significant time and attention is focused on monthly numbers, particularly if they are below plan. Yet many leaders see formal performance reviews as a burden, a form to submit to human resources to satisfy annual HR requirements.
What leaders sometimes miss is how critical performance reviews actually are.
Many processes depend on the quality and comprehensive feedback that reviews and an effective performance management system can provide.
Performance optimization; employee engagement and retention; career and leadership development; and innovation are just a few areas where effectiveness can be bolstered by a strong review process.
Keep the big picture in view
To optimize performance, initial goals must be mutually developed and be perceived as fair. The manager must ensure feedback is collaborative and respectful, and take into account the needs of both the business and the individual. There must be a sense of challenge in the role and a focus on continual learning. This will help to keep employees engaged.
The manager’s sincere interest in developmental planning, both for the employees’ current roles and for their career development, will help retain employees as they see potential to achieve their broader goals.
Senior leaders must work to ensure consistency of ratings among all managers. Be aware of rater errors and differences, such as easy raters versus hard ones. Some managers seek to avoid conflict and bend over backward to please employees.
Other managers don’t want to take the time to remediate employees, and would rather have poor performers instead of open positions that burden them with more work.
Still others don’t feel competent addressing some performance concerns, and would rather give a “meets standards” rating then open the door for complex discussions with senior leaders and HR. Some look solely at an employee’s current role and do not see potential for higher responsibility.
Get everyone in line
Yet others are more concerned with keeping high performers in their current roles to help the department’s numbers look good, and are reluctant to discuss career development for those on the radar for future leadership roles. All these inconsistencies in rating and performance management negatively impact leadership development, succession and high potential development.
Effective performance reviews and management are crucial for talent management executives who rely on accurate performance appraisal ratings and on manager recommendations of employees who have high potential.
Identifying the wrong people for succession or replacement plans can inhibit an organization’s ability to retain talent and ensure that employees feel most engaged. That is because employees can become discouraged if they perceive promotion decisions as unfair, particularly if the system lacks transparency or if decisions are perceived as arbitrary.
This can affect the entire culture of the organization, zap energy needed to drive innovation and limit change management initiatives.
Leaders must own the performance management system rather than turn it entirely over to HR. Time spent here will increase the likelihood of optimal results. ●
Jay Colker, D.M., MBA, M.A.
Core faculty for the master of arts in counseling and organizational psychology program
Adler School of Professional Psychology
Jay also maintains a human capital consulting practice, is founder of Crowdsourced Coaching.