Taking the Dread out of Performance Reviews

Nearly everyone dreads year-end performance reviews. First, they coincide un-festively with the holiday season, when bad news is no fun to give or to receive. And as more employees are being asked to do self-assessments, there’s an added stress for workers. What documentation do they need to prove their worth at work? How do they navigate the process of rating themselves?

It helps to view the performance assessment as a chance to build a healthier, happier relationship for both employee and employer, HR experts say. Instead of making a performance review an annual dressing-down, use it to identify areas where the employee is most passionate and competent, and figure out how to tailor his or her tasks to those areas.

“A litany of performance failures and faults only serves to disengage and frustrate employees,” advised Brian Kropp, executive director at the Corporate Executive Board’s (CEB’s) HR practice. “Managers must effectively balance positive and negative feedback.”

Supervisors shouldn’t avoid offering criticism when it’s warranted, Kropp noted, but the tone of the session should be “forward-looking, not backward-looking.”

Rather than focusing on what happened in the last 12 months, the conversation should start with, “Based on the last 12 months, here’s what we see for you for the next 12 months,” Kropp said. This approach can make the process more useful for employees, Kropp said, noting that CEB’s research shows that fewer than half of workers find performance reviews to be useful.

Performance reviews can be a chance to determine where a worker would be happiest and most productive, said Michael Molina, chief human resources officer at San Diego-based executive coaching firm Vistage. “We try to focus on the things the employee loves doing, and what they are good at,” Molina said. “That’s what we, as organizations, should be encouraging. In the past, there used to be this focus on, ‘what do you need to work on versus discussing the things you really do well,’ ” he said.

Rona Borre, president and CEO of Chicago-based IT staffing and recruiting firm Instant Alliance, said she prefers giving feedback year-round to avoid the stress and potential drama of a December performance review. But if there’s a formal year-end sit-down, the conversation should have a look-ahead tone, she agreed. Managers should be evaluating “what motivates that person? What are their goals, and what are the firm’s goals? They should really have an outline as to what 2015 will be like,” she said.

Employees are increasingly being asked to write self-assessments before sitting down for a formal review, said Ravin Jesuthasan, global head of talent management at Towers Watson. The process helps bridge whatever “disconnect” there might be between employees’ and their managers’ perspectives of their performance. And since many self-assessments are done using an online program, workers can regularly examine their preset goals and their success in achieving them, Jesuthasan said. A recent report by Towers Watson found that 61 percent of companies studied had workers monitor their own progress online.

Managers get mixed reactions from employees in the way they handle performance reviews, according to the Towers Watson study. Half of respondents agreed or strongly agreed that “my manager gives me good suggestions on how I can improve my performance.” Fewer than half of employees agreed with the statements that the organization does a good job explaining the performance and management process (48 percent); there is a clear relationship between performance and pay (45 percent); and high-performing employees are rewarded for their work (48 percent). One-third of respondents said unclear or conflicting job expectations caused stress at work.

And what if the employee is doing well but the company can’t afford to pay an expected bonus, or will be paying far less than expected? Such news is best delivered with as detailed an explanation as possible about why the end-of-year cash—which workers often count on to subsidize holiday costs—isn’t coming, experts said. Jesuthasan urged managers to maintain the right parity, so that higher-performing employees are given a bigger piece of the reduced “bonus” pie, and to find other ways to reward employees. Some workers might like to attend a training conference at Harvard Business School, for example, or be offered a similar opportunity within the company.

But don’t abandon the struggling workers, either, the Towers Watson report suggested. Just 31 percent of workers agreed that managers at their companies help poor performers improve.

Susan Milligan is a freelance writer based in Washington, D.C.