18 Mistakes to Avoid When Designing a Performance Review Process — Part Three of Three

Avoid disengaging your employees with a poor Performance Review experience

This is Part Three of a Three Part Series — you can read Part One here and Part Two here.

Over the last four decades, I’ve worked with many Performance Review processes in NZ, the UK, and various industries.

What have I learned?

Performance Reviews can be inspiring or terrible.

After an inspiring review, team members have had a positive experience with their line manager. They know their goals for the year and have a development plan and a career goal.

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Conversely, terrible reviews leave employees feeling disengaged or believing that the Performance Reviews are a waste of time.

Here are six more Performance Review process mistakes for process designers to avoid:

Thirteen — Having organizational values but not including them in the Performance Review ratings

If an organization has values and has taken the time to clarify how those values translate on a day-to-day basis, they are ahead of the game.

However, those values are only meaningful if included in Performance Reviews.

If employees are rewarded for getting results, even though their behavior is appalling, that sends a strong message that results are what get employees ahead. Yes, leaders must achieve KPIs, and businesses must make money, but why can’t they do this while treating others respectfully?

Whenever I look online, I see reports of toxic workplaces, misogynistic employees, and inequality.

Action point: Use the design of your Performance Review process to stamp out poor behavior rather than encourage it.

Fourteen — Inconsistent link between Performance Reviews and pay increases

Employees are OK with pay increases linked to Performance Review ratings and results and with no link between remuneration and reviews.

Employees dislike an organization that cannot decide whether pay and reviews are linked.

One of the most common questions from employees at review time is, “How is my review rating linked to pay increases?”

Leaders need to be able to answer that question even if the answer is, “Performance Reviews inform the pay changes alongside other factors such as market rate, the economy and how well the organization is doing.”

Flipping back and forth between linking pay to review ratings and no link at all leads to employee dissatisfaction.

Action point: Pick a policy for linking reviews to pay that you can adhere to.

Fifteen — Choosing a clunky system

If you are paying for a fancy online Performance Review system, ensure it does everything you want.

If the system doesn’t allow the sort of access you need your managers to have, falls over regularly, or has security issues, it will upset your employees and waste time.

For example, one performance review system I worked with didn’t allow managers to rate goals at the final review. It allowed team members to rate their goals, but the managers couldn’t rate their team members’ goals.

Another system was offline for a week during the year-end reviews. Yet another glitch gave employees access to the entire employee salary list.

If your system is standalone or an add-on that isn’t linked to your payroll system, any role changes, leavers, or starters must be entered manually, which is time-consuming.

Manual updates also allow for error — I’ve witnessed managers log into the Performance Review system and see extra team members they’ve never heard of or discover that everyone on their team has disappeared.

Remember to check out who will administer the system, how long it will take, and whether they have the time.

Action point: Ensure your system is reliable, mobile-friendly, easy to navigate, suitable for end users, and has the resources set aside for the admin.

Sixteen — Unfair calibration

Calibration is when an organization’s senior leaders meet to justify the ratings they’ve given to their teams to ensure fair ratings across the business.

If a manager is generous, they may have graded their team more highly than another manager who is more challenging to please.

Calibration remedies any inequities so that the same quality of work gets the same grade across the organization.

This takes a lot of work. Like everyone else, managers have unconscious biases and are prone to forgetting what happened a year ago unless reminded.

Unfair or lack of calibration will affect how employees see the Performance Review process.

Action point: Ensure there is a calibration process at the end of the year and check that it is viable. Conduct training for leaders on how to grade, unconscious bias, and the calibration process.

Seventeen — Lack of support from senior leaders

Any organizational-wide process like Performance Review needs the support of senior leaders for it to be successful.

In real terms, this means senior leaders must conduct reviews for their direct reports promptly and thoroughly.

When more junior leaders receive their reviews promptly, they have plenty of time to prepare for and meet with their team.

As with any other process or system, senior leaders must set an example, as those who aspire to be senior leaders will emulate their behaviors.

Action point: Ensure you have support from senior leaders, including their willingness to conduct Performance Reviews as per the agreed-upon process.

Eighteen — Designers are inexperienced

We’ve all got to start somewhere, but for an inexperienced employee, that somewhere isn’t designing a Performance Review process.

Whoever designs the process needs a solid understanding of why the organization is implementing or upgrading the review process, how the process will best suit the business, and what can go wrong.

With an understanding of what can happen in practice, it’s possible to design a review process that will satisfy leaders and team members.

Action point: Ensure that whoever designs the review process understands the organization and Performance Reviews in general enough to create a practical process.

Final Thoughts

Performance reviews are a fantastic tool for leaders, but the process only makes sense if it is fit for purpose.

If you are designing a PR process or choosing who will design it, carefully consider what you want the process to achieve and any potential roadblocks.

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