Performance review is an extremely important management tool. How do you do it and what is its purpose exactly? Learn more from our blog!
When I first encountered performance review, I thought it was a one-way flow of information with the sole purpose of providing feedback. The fact that a CEO or manager tells you what you think about your employee or their job.
I was thinking wrong.
Today, I have done quite a few performance evaluations and tried to understand as much as possible and apply them as effectively as possible. Over time, I got a routine in it. In this blog post, I tried to put together all the useful information and advice about a performance review method that we also use in Bluebird. It is not the only solution and cannot be used in all organizations. But that's what we do, and in my opinion, it contains solutions and ideas that can help you design the right performance review system for you.
Does Performance Review Make Sense?
Yes, if you take it seriously; no, if you only want to know the task. If the latter is true, do not even begin; it makes no sense! Furthermore, you can reduce the motivation of your co-worker, personalize your conversation, and cause serious harm! If you can't see why a performance review is worthwhile, do not do it! I am afraid I can not offer any advice if you have to "keep" a performance review. I have never worked in an environment where it was mandatory to do something without seeing the point...
What is not a performance review?
"All cool, we have nothing to talk about!" This is not a performance review.
"I think you're lazy." That's not an idea either. Qualification is not the goal, but a measure of your employee’s performance.
What is a Performance Review? Motivation, Accountability or Something Else?
In my opinion, something else.
Namely, because if you have a co-worker, an employee, it is not only your job to motivate or call them to account, but (and I think it is mainly!) to provide them with an environment in which to be good to work in. In which you can progress effectively, "stupidity free" with tasks, where you can achieve your goals because they are realistic, motivating. Where you can grow, where you can pursue career goals. Where you have the opportunity to be good.
And that is the point. We love to perform well, we love to work well, we love to have our performance recognized, our knowledge recognized.
In my opinion, as a leader, I need to be able to achieve that. It is not necessary to “motivate” the other but to create a motivating environment for them. An environment in which you would like to work yourself. (Of course, I have a lot of other things to do as a leader, but I would not take the topic aside.)
In my opinion, the performance review is a common task. Achieving the success of your employee is also a common task. It is not just up to you! And in the performance review, you are doing the right thing if you are not just keeping a monologue as a leader about how your employee's performance is. No. Also, ask how they see their performance themselves!
Measurement - Evaluation - Feedback
Performance review has three pillars.
The first is to measure performance: how and what do we measure? What are the key performance indicators? How do I determine my performance level? These questions arise as a result of the measurement. That is, the main question is: what do we measure as performance?
The second is performance review: what counts as good and bad performance? How often is my performance evaluated?
The third is the feedback: how, from whom, and when do I get the results of the evaluation, who and when tells me what he or she thinks about the performance I have achieved?
Before you begin a performance review, you may wish to consider the above three (measurement-evaluation-feedback).
But the most important question of all is, "How do you know you are doing your job well?" If you can communicate it to your co-worker, then you can clearly see their role and the expectations placed on them. If you can not list it item by item, I suggest you think about it before you start evaluating performance. (I believe it is a very difficult task to give a precise definition of the above question.)
Let's Look at a Little Theoretical Background
Performance Review Report
The purpose of the performance review is to measure the work and results of your co-worker. During the process (at Bluebird), you work with your co-workers to evaluate your performance, give each other feedback, and define what to do. Of course, everyone has something to say on a different topic.
The leader is responsible for defining performance goals, measuring and evaluating performance, providing feedback to the employee, and formulating and finalizing development points.
It is the employee's responsibility to ask questions about goals and performance expectations, besides evaluate their own performance, and express opinions about potential development areas.
Types of Performance Evaluation
There are three stages to this performance review.
First, we create the performance review questionnaire. After that, the employee responds with the aim of reflecting on their own performance, identifying their strengths and weaknesses. We will then discuss what can be done to improve their performance.
The strength of this method is that it encourages employees to reflect on their own performance, to highlight and be proud of their strengths, and identify the points where they need improvement.
At Bluebird, we use this method in such a way that the employee conducts his or her own assessment (score + text) and then the leader evaluates the employee in the same form. The leader comments on each point and expresses his or her opinion. The differences between the two results are immediately visible, and the leader can provide feedback to his or her employee about them. Additionally, the review considers goals, skills, knowledge and attitudes and includes an annual textual evaluation. An employee describes their year's work in text form, along with a section on "personal goals." The employee writes a year-end summary and describes the points to be improved and how to accomplish them.
Jack Welch's Constraint Distribution System
This system is not about evaluating employees individually, but rather about forcing the manager to divide his team into three segments: 20-70-10%.
The first group (20%) includes employees who are key players in the team's success.
They are followed by 70% of high-performing employees.
And the bottom 10% are the lowest performers.
What is the purpose of the method? To determine the best and worst performers. As a result of this method, both teams benefit. It rewards the 20% team, while gradually downsizing the 10% team.
The method has many followers and many opponents. I think I would never use it alone to prepare decisions, as a low-performing employee may perform well for years, but not now. However, what happens when a leader creates such a division? Will you have a clearer picture of your team's performance?
360-Degree Feedback System
This performance review system is about the performance review of a given colleague by the employee himself, the employee's co-workers, the leader, and even the customer or supplier. Everyone with whom our employee has a daily routine while working.
(There is also a version of this review system in which the employee, team members, and leader all contribute to the assessment.)
Conducting a 360-degree assessment is a time-consuming process, but it reveals numerous hidden potentials. Consider what would happen if you could discuss performance review with your customer or supplier in addition to your day-to-day business. Will the relationship be closer or weaker? Can you get a more objective picture of your co-worker than just judging him or herself? And how does having a formalized view of each other's performance affect your employees' relationships?
I recommend watching the video below for more information on the 360-degree feedback system.
Its performance benefits, not just employees, but also leaders. For many businesses, it may be foreign to employees that their direct leaders are valued, while for other companies, it is standard practice.
Additionally, the questions and areas must be appropriate for the leader's evaluation. The other key point is clarity. It should be clear what our colleague is saying.
Leadership evaluation is effective when leaders are capable of accepting and processing critical remarks from their own employees, as well as rationalizing and grounding a positive (or very positive) outcome.
At Bluebird, employee satisfaction is measured every 1-2 years and my staff evaluates the line managers and the Head of Bluebird (i.e., my evaluation). I consider it extremely important for our staff to be able to express their views. However, this requires an environment of trust, an environment in which everyone feels comfortable expressing their opinions. I only recommend this review method to leaders or managers who are able to accept feedback. But if they can’t accept, why expect their co-workers to accept comments about their work?
Performance Review Methods
Forced choice is a rather polar solution in which you must indicate specific questions with a + or - sign. For instance, the appraised employee might be asked, "Do you perform your duties well?" or "Are you proactive in your work?" or "Do you complete your duties on time?"
Evaluation by Purpose
This performance review system evaluates an employee based on predefined KPIs. Such goals may include sales revenue, the number of completed projects, conversions, etc. The evaluation is numerical, objective, simple.
We measure and evaluate knowledge, abilities, and attitudes in an aptitude assessment. An important element of this method is to identify development points and opportunities, as well as to define how development should take place.