Insights from Engagedly’s State of AI in HRM, 2nd Edition Survey.
A successful organization relies heavily on the dedication and efficiency of its workforce. Employee performances help steer the organization on a path of success and growth. Hence, monitoring and reviewing the performance of employees is essential.
Unfortunately, an annual performance review process is often seen as a dreaded activity by both; managers and employees. This makes us wonder why such an essential activity can be perceived as an ordeal. The answer lies in the way traditional performance appraisal processes are conducted.
The modern workplace is in crucial need of change in these methods. The performance evaluation processes should be able to provide the employees with information, motivation, feedback, and clear instruction about how they can improve productivity and contribute to the organizational goal.
Employee performance review has immense potential for increasing employee engagement, reducing turnover, and creating a robust and motivated workforce. However, this requires addressing the present issues with the performance review system.
Also, failure to conduct the performance appraisal efficiently can lead to lower employee morale, high employee turnover, and overall dissatisfaction in the workforce.
According to Gallup study, only 14% of employees feel motivated by the employee performance review in the organization.
As shocking as these numbers are, it represents a significant loophole in the current performance review system. To make the company performance review process effective, you need to take cautious steps to enhance the system.
Performance review is not a onetime function, but an ongoing process. Employees require feedback and inputs from their superiors much more frequently.
Annual performance reviews measure employee performance at a particular point in time. The year-long performance of the workforce does not receive adequate attention in the annual appraisal. Hence, it is not a true indicator of productivity and efficiency.
Frequent inputs allow the individuals to understand the parts of the process that are deriving desired results. Also, it helps in the early identification of any discrepancies. It helps to address them on time.
Managers can have bi-annually or quarterly employee performance reviews, which can be accompanied by frequent rounding sessions. Weekly or even daily rounding for outcomes can help improve performance.
Frequent performance reviews can provide the following major advantages.
Performance reviews serve as a useful medium for evaluating and improve employee performance. However, often it turns into a one-sided conversation where the managers vent out about the mistakes made by the employees.
This conversation does not bring any positive improvements. The mistakes have already been committed in the past, and they are well beyond the control of any individual. A more productive conversation should be focused on ways and means to improve performance in the future.
The managers should try to establish an environment where employees can freely communicate the issues or challenges faced by them and suggest ways that can help in tackling these issues and improve performance.
Asking specific questions to employees will help in improving communication and employee engagement. Managers will find it easier to identify means to develop the skills of the team members. Also, you can enquire about what resources they think can help contribute to their success.
The benefits of having a productive conversation with employees are:
The performance review system often has criteria like communication skills, professionalism, or being a team player. As important as these attributes are for employee success, they are not clearly definable or quantifiable.
While it is easy to identify and condemn unprofessional behaviour, rewarding or rating professional conduct can be difficult. The interpretation of these attributes depends on the subjective judgment of a manager.
To make the company performance review process more effective, it is essential to set objective standards for measuring employee productivity. These measures should be clearly defined and communicated to the employees.
Also, the review process should be driven by data and not the perception of managers. Setting objective standards enables employees to tie their efforts to the desired outcomes. It also makes the evaluation process easier for managers.
A few benefits that necessitate setting objective criteria for the review process are:
Technology has created an unprecedented impact on how an organization conducts business, interacts with customers, and manages its daily operation. However, some companies are still relying on age-old paper-based systems for performance evaluation. These conventional methods are prone to manual errors and inefficiencies.
Hence, to enhance the company performance review process, you need to take advantage of the latest technologies. A company can employ performance review software to manage, supervise, and improve the productivity of its employees, teams, and departments.
Most performance review software enable you to set targets and track progress in real-time. The goals for individuals, teams, and departments are clearly defined, and they all align to contribute to organizational goals.
It also helps in establishing communication between managers and team members where they can exchange feedback to improve performance and productivity.
Some of the benefits of using technology for performance review are:
The organizational roles and responsibilities often force employees to dedicate their personal time to their work. They do not receive any overtime pay for such work. Although most employees are driven by their career goals, they may not be willing to allocate their extra hours for performance review.
If the managers do not allocate specific time for performance appraisal, the employees may feel overburdened. Also, this may make the whole process seem like a tedious task that the employees want to escape at all costs.
To avoid such a situation, managers need to free up their time to make room for the review process. If you want your employees to understand the importance of the performance evaluation system, you need to lead by example.
When managers put aside other tasks to free up time for the evaluation process, the employees are more likely to take the process seriously.
The benefits of dedicating specific time for performance review are:
According to the Council of Employee Benefits, a company with a workforce of 10, 000 employees undertake a performance review expenditure of around $35 million. However, 95% of HR leaders feel that these expenditures hardly bring the desired results.
Every challenge in business provides an equal opportunity for progress. Hence, there is a scope for improvement in the performance review system to make it more effective.
Changing the way a company conducts its performance review may seem like a daunting task. However, to fuel organizational growth and success, the managers need to develop the skills of team members in every department.
The modern performance review process should replace the outdated method of evaluation and aid in improving employee experience. It should foster two-way conversations that are focused on future growth and success.
Also, the annual reviews should be replaceable by a more frequent, transparent, and collaborative evaluation system. The metrics for evaluation should be objective and clearly defined.
The evaluation method should be driven by technology and information. Hence, there should not be any room for bias against any individual or group.
Learn how Engagedly can help you improve your performance review process by requesting us for a demo!
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