Employee Performance Evaluation Modules: Don’t Buy One without these 6 Key Features

Get this…

A recent study has shown that 22% of employees actually prefer calling in sick than facing a performance review.

But get this too…

The State of Employee Engagement Report by OfficeVibe says loud and clear that 82% of employees really appreciate receiving feedback – whether it is inherently positive, or negative.

So, what do these two contradicting facts tell us.

Feedback improves performance. But the generic and prevalent performance reviews or employee evaluations of HR have little to do with a true culture of feedback and everything to do with making talent feel threatened and uncomfortable.

Let Us Agree – Performance Reviews are Broken

The best way to go about identifying where the disconnect lies is diving into modern productivity and performance research that can lay out the best practices, and contrast the current state of affairs to the ideal scenario.

#1 Performance Reviews Disregard the Part Played by Trust

Trust may seem like an intangible, unquantifiable parameter when it comes to impacting something as crucial as employee performance, but do not underestimate the value of trust as a part of your workplace culture.

Leadership IQ surveyed 7000 executives, managers and employees and it found that 32% of talent stay or churn based on the trust they have in their managers and in the company.

Moreover, trust is an important component of what the People Operations at Google define as “psychological safety” of a team. The concept is simple. Employees who trust that the management and their managers have created an ecosystem where they are free to take risks and think outside the box without the fear of being ridiculed for failing, are not only more receptive to feedback, they also end up being up to 40% more productive than their peers who operate in an environment where the management looms as a threat to make them conform to company policies.

Performance reviews the way they are structured today leave no room for trust building. They happen once, or at the very most twice, a year. The process feels unnatural and alien. Often there exists no informal communication between those who are being evaluated (the employees) and those who are on the other side of the table conducting the evaluations (the managers).

The output is rendered useless, except as a source of anxiety for talent, because the trust that would enable its faithful assimilation is missing from the mix.

Workers assume that the result of the evaluation is an indictment of their performance and go to great lengths to avoid taking anything that comes out of it to heart.

#2 Performance Reviews Position Feedback Subjectively (and Negatively)

Performance reviews may actually push top employees to quietly leave your company!

Here is why.

74% of people who struggle at work, already know that they are facing issues. This prepares them for a relatively negative evaluation of their performance. But on the other hand, those who like to grow and learn are considerably perturbed by critical feedback, because they are unsuspecting of any form of attack (even imagined) on their track record.

This is reflected in Josh Bersin’s study where he talks about Microsoft completely disbanding its performance management process after discovering how evaluations have lost them their A-players.

There are a number of reasons driving this phenomenon.

Performance reviews are typically viewed as subjective. The upward approach where only the blinkered view point of distant managers is relied on for an assessment is dying a lingering death. Diversity in insights and opinions from multiple raters is what paints a full circle or complete picture of an individual’s capacity and contributions. And it is this type of rich feedback that employees interested in growing within an organization actually seek.

Performance reviews push managers towards the Central Tendency Bias. Providing honest feedback can be deeply disconcerting. An easy way out is to grade most employees an average, with a smattering of high performers and a few outliers who need immediate attention to improve their output. However, it is proven that 69% of company talent crave better recognition. It is only when they are shown to be exceptional do they call upon their reservoirs of discretionary energy and go above and beyond the call of duty. In short, performance reviews not done well encourage disengagement and dissatisfaction at work.

#3 Performance Evaluations are One-Sided

This again boils down partly to trust. In traditional performance evaluations, all the communication is one-way, and potentially coming from someone (the managers) who have not had the time to foster mutual trust and respect with the employee.

Cue in the already discussed problem of the exercise becoming futile because the worker is not receptive to the feedback being shared.

But there is another opportunity being squandered here.

Studies by Gallup have shown that management can also benefit directly from performance evaluations. In fact, the managers who are open to feedback from employees and actively solicit them during evaluations are perceived to be better leaders, and they improve their overall profitability by 8.9%.

#4 Performance Evaluations Focus on Efficiency, Not Productivity

Efficiency and productivity may seem like two sides of the same coin, but in terms of what they mean for a business, the difference is significant. When a company wants its workforce to be efficient, it is basically demanding “more in less time”. More of what?

That is where productivity steps in. It is not enough to have an army of workers who know the fastest way to wrap up tasks. They must also master the science of choosing the right tasks, at the right time. Especially since the global economy is now one of knowledge workers.

Traditional performance evaluations do nothing to align results with goals that are important to rendering the purpose of a company. They fail to match personal employee motivations with the overarching objective of the business, thereby stifling accountability, the sense of belonging, and loyalty.

Employee Performance Evaluation Modules & 6 Features to Mend Performance Reviews

Strategy will obviously lead the way if performance evaluations are to find a place in the workforce of tomorrow.

But tools can help to a large extent by translating strategy into action, and then automating these actions for smooth execution.

If you are interested in fixing the anomalies that traditional evals have introduced in your company, then find a performance review module with these six key features:

💎 360 Degree Continuous Feedback

The term “360 degree” stands for the fact that this type of feedback is solicited from multiple stakeholders within the company. Managers, peers, those who are managed – everyone gets to add to the insights about the contributions and competencies of an individual. Exhaustive research has shown that such evaluations are relied upon as rich, helpful, transparent and are more likely to affect positive changes in the people receiving them.

The ideal software solution leads with a customized approach where some parameters can be gauged on an objective numbers scale (with the proper context), and some parameters require those who are conducting the evaluation to share subjective feedback.

Other factors to consider are the frequency of assessment and the ease of receiving feedback. Performance evaluations are the most effective when they are conducted throughout the year to account for random dips in productivity of employees, or unforeseen events that can derail work-life balance. Moreover individuals should be able to proactively ask for feedback, since this helps build confidence in their abilities.

💎 Easy One-on-One Meetings

Performance evaluations lose their grip on the psyche of employees, if they are used to interacting with their managers in a one-on-one setting. These informal meetings normalize the giving and receiving of feedback and go a very long way in creating that “psychological safety” which shapes excellent workers.

Ideally managers should be able to quickly and discreetly book these meetings, with an automatic overview of the schedule of the team member. Conversely talent should also be able to request a session without jumping through hoops.

CakeHR’s performance module even goes so far to give supervisors the ability to add meeting notes to the event, choose a goal as the focus of the discussion, and effortlessly generate a PDF of the meeting output for quick sharing.

💎 Goal Setting

Objectives and Key Results (OKRs) is by far the most effective goal setting framework available to businesses. It combines the specificity and clarity of the SMART goal setting paradigm, with the freedom and flexibility of cascading alignment.

Leadership identifies desired improvements in areas that matter. However, the process of executing projects to bring about these improvements is left to the discretion of managers, and to a large extent even the employees.

Workers are assigned individual goals to measure performance in their domains. But these goals all tie back to the OKRs selected for the quarter.

Performance evaluation modules with the right goal setting options allow the leadership to set OKRs for the company, and assign smaller, personalized goals to workers who are then assessed in their context through the fair and objective channel of 360-degree feedback.

💎 Engagement Surveys

Engagement surveys take two-way communication to the next level. Management can put its finger on the pulse of employee satisfaction, and even encourage workers to share their perception of the performance of the leadership of the company, in order to improve it.

Good performance evaluation modules should provide the option of anonymous feedback, offer easy and visual aggregation of employee sentiments, support customization of survey questions, and last but not the least, be accessible from mobile devices.

💎 Career Planning & Learning

Employees feel the most fulfilled when they are confident that their personal career goals will be fulfilled as they work towards realizing the mission of the company. This is why career planning, a well thought out career path and custom learning tracks are crucial in today’s dynamic market.

• Skills are becoming obsolete at a rapid pace. For example, the half-life of a digital marketer’s know-how is only 2.5 years. This is why performance evaluation modules need to integrate learning tracks that supplement existing knowledge with suggestions of new, relevant upgrades, as they become available.
• The whole point of an evaluation is to map the strengths and weaknesses of employees, strategically capitalizing on the former, while helping them mitigate the latter. Through intuitive and progressive career planning, purportedly mediocre performers can find their “sweet spot” and generate exceptional value for the business.

💎 People Analytics

According to a survey by Deloitte, globally 70% of organizations are in the midst of projects to deploy people analytics solutions. Businesses have woken up to the truth that customers stand for revenue, but employees are by far their largest expense. In the wake of employee experience as a major trend to focus on, people analytics in performance evaluation modules is non-negotiable.

The ability to pull custom reports, visualize how productivity pans across teams, and spot gaps that can be filled to optimize workforce output is available to companies, and too good to be passed up.

Giving performance reviews a new lease on life, while respecting the changing needs of the workforce and the call for more stringent privacy measures is a big ask.

But evaluation modules with features like 360-degree feedback, one-on-one meetings, goal setting options, custom engagement surveys, integrated career planning and people analytics are a step in the right direction.

Diana.

CakeHR is a one stop shop for your HR management needs. With attention to user experience & making the software easy to use yet packed with loads of features we strive to make your HR management as easy as a piece of cake!