For many organisations, December is a careful balancing act involving how to run a performance review process without spoiling Christmas. 2020 has potentially made the job easier in that respect by already ruining Christmas. But that still leaves the matter of performance reviews.
What should be a really constructive opportunity to review employees’ progress and reward them in time for Christmas has become a process that almost everyone is unhappy with to some degree. When we spoke to managers, only 22% said they were ‘happy’ or ‘mostly happy’ with their performance review process. On the other side of the table, a Gallup survey found that only 14% of employees strongly agreed that their performance reviews inspired them to improve.
“It’s unclear and it’s a complete joke” (Kommon Interview)
“I’ve never been anywhere that’s had a good one” (Kommon Interview)
The criticisms vary depending on the process but it’s usually some combination of complaints that they’re time-consuming, unfair, artificial, inaccurate, subjective, drawn-out, unpredictable or just non-existent. It’s a shame because at their best, they’re a brilliant tool for boosting performance and morale. No wonder that there are plenty of articles published around this time on how to do them.
But this isn’t one of those articles (we’ll do that another time).
We’ve read lots of these and despite some excellent advice out there (this one by Lenny Ratchisky in particular), we’ve noticed that most seem to be missing one key point. So we wanted to raise that here in case it helps anyone over the next few weeks.
Seems obvious. We’ll elaborate.
Strictly speaking, a performance review isn’t (and shouldn’t be) about remuneration. It should be a development opportunity. It’s a space for the manager and their team members to reflect on the previous six or twelve months; what went well, what didn’t, and where the opportunities are for growth over the coming year.
But… and there’s a big but. Many companies don’t separate out performance reviews from pay decisions - they’re on the same cycle. If this is the case, this can significantly shift the dynamics of the review, often through some combination of the following:
If managers aren’t aware of these dynamics, they can really warp a performance review. Often any learnings will just be drowned out by a focus on whether or not the impact on salary/bonus/rewards was appropriate or fair. The good news is that to a certain extent this can be avoided.
Assuming your company does link remuneration to performance reviews, there are a few tips you can use to make sure that this doesn’t derail your reviews: