How to Conduct a Performance Review Like the Best Leaders
The following post from John Eades on October 13, 2023 in his “Building The Best” weekly post from LearnLoft and he addresses the importance of measurement of performance.
Most performance reviews are a gigantic waste of time and effort. Managers don’t like them, team members despise them, and HR doesn’t know what to think. However, before you start to believe this is a bashing session around performance reviews, think again.
Measuring performance is a part of being a professional. The best athletes in the world are measured by their achievements on the field, politicians are evaluated on their record (at least they used to be), and high performers embrace the opportunity to have their work shine.
So, where did we go wrong? Why do most people hate them, and organizations are unsure what to do with their “annual performance reviews.” The secret lies in the word annual, not performance review. An annual review of someone’s performance isn’t enough to have high levels of accountability to sustain excellence.
An annual review of someone’s performance isn’t enough to have high levels of accountability to sustain excellence.
Take Erin, a first-time manager, as an example. She was recruited into a management position at a large non-profit. While she was excited about the opportunity, the one responsibility that made her anxious was knowing she would have to give her new team members annual performance reviews. She had yet to experience a performance review in her previous roles, which left her feeling inspired and excited to start another year. So naturally, she felt unsure of how she could change that for her new team members.
Luckily, her new company invested in leadership development, and with her promotion came a leadership coach to help her on the journey. In one of her coaching sessions, she described her worry and anxiety about giving annual performance reviews to her coach. Instead of accepting her past, her coach had her focus on the future by sharing a fundamental leadership principle:
It’s not what you do occasionally that matters; it’s what you do consistently that matters.
Unfortunately, Erin’s previous bosses hadn’t bought into this principle and left most of her performance conversations to an annual event, which isn’t good enough.
The Purpose of Performance Reviews
In an ideal world, leaders would give consistent coaching and feedback to their team to help improve their performance before the annual performance review. However, there is still a need for a formal performance review, especially if the purpose of the review is clear.
In a recent group coaching session, I shared the four purposes of performance reviews.
- Provide Accurate Evaluation of Performance – At least once a year, every team member should get a view of how team members evaluate their attitude, effort, and overall performance. The type of feedback that does this best is called 360° Feedback. This is a fancy way of getting honest feedback from a group of colleagues to give each team member a view of their performance from multiple angles.
- Discover Skill or Career Development Opportunities – The skills development of every professional must be their own. However, as Marshall Goldsmith wrote in Becoming Coachable, “Sustainable, long-term change does not happen in isolation.” There are absolutely times when we need others to help shed light on skill development opportunities. Performance reviews can be a great space to do this.
- Make Compensation Adjustments – The mighty grail for most employees in their performance review sounds like, “Show me the money!” Performance reviews provide a consistent opportunity to announce bonuses and pay increases for those demonstrated value throughout the year.
- Inspire Future Performance – Where most managers struggle in performance reviews is failing to motivate and inspire their team. Research suggests that only 14% of workers strongly agree that their performance reviews inspire them to improve—and only 26% believe their reviews are even accurate. These are sad but true statistics.
How to Conduct a Modern-Day Performance Review
There is no perfect method that will work for every manager. However, most managers don’t have a method at all. Instead of preparing, they wing it. So, if you want to do it differently, here are a few proven steps:
1. Have a Plan – The best football teams refuse to go into a big game without a game plan, so neither should you. Here is a free download of our Performance Review Planner. The Planner allows you to write out the positives, performance truths, and skill development opportunities before going into the session with a team member. Even if the review goes off script, at least you have vital topics of conversation to get it back on track.
2. Make Them Think – A performance review shouldn’t be a monologue, it should be a dialogue. The review should be a conversation between two or more professionals exploring things to start, stop, or continue doing. Unfortunately, this isn’t often the case.
A performance review shouldn’t be a monologue, it should be a dialogue.
Arm yourself with some great open-ended questions to make them think. Performance reviews are a great time to make someone think about their performance, career aspirations, and goals for the coming year.
3. Cover the Tough Stuff – Avoiding uncomfortable things is always easier than confronting them. When you provide insight into how a team member can perform better, you help them. Tell team members the truth out of love and respect to help them be more valuable to the team, organization, and, most importantly, themselves.
When leaders provide feedback on how a team member can perform better, you help them, not hurt them.
All performance reviews aren’t a gigantic waste of time and effort. Only those where leaders don’t have a plan, refuse to make their employees think, and avoid the tough stuff. So whether you are in a company that requires annual performance reviews or not, be consistent so the performance review is no surprise.
Performance Review Planner: Download the free Performance Review Planner to help you be a more effective manager.
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About the Author
John Eades is the CEO of LearnLoft, a leadership development company helping executives and managers to lead their best. He was named one of LinkedIn’s Top Voices in Management & Workplace. John is also the author of Building the Best: 8 Proven Leadership Principles to Elevate Others to Success. You can follow him on Instagram @johngeades.