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The AR Group

Performance Evaluations ? Time Suck or Value-Add?

by Victoria T. Aguilar

While there is no particular season, month, or quarter that is uniformly designated as the right time in which to conduct employee evaluations, in our practice, the majority of our clients (employers) generally conduct reviews in either the second or third quarter.? Regardless of when your company undertakes employee reviews, it?s appropriate to take a step back and evaluate whether and why your reviews are worth conducting. Put simply, is your review process a time suck or value-add?

Too often employers, like people, get caught up in the process of doing something that the point of doing it is nearly forgotten ? or maybe was never fully known.? At The AR Group, we understand this reality.? Perhaps that?s because we counsel a variety of businesses ? large and small ? and we see, firsthand, that while most companies have in place an annual review process that is dutifully implemented, very few consider, let alone assess, whether their performance review process adds value beyond perhaps establishment of a written record.? Because we have seen the value that a properly designed and implemented performance review process can bring, we encourage clients to routinely evaluate their review process to ensure that it is aligned with current company objectives. Before beginning a new review cycle, therefore, we suggest that clients first review their performance review documentation and processes by asking some questions including:

  • What factors are being measured?? Why?
  • Do those factors relate to current objectives?? If so, how? If not, why not?
  • To what extent are employees being differentiated, in terms of their performance?
  • If management is differentiating between employees, is there a process in place to level set across business units or teams? Why?? Why not?
  • Does the process allow for separately rating manager performance?? If so, how?? If not, why not?

Even a perfunctory glance at your company?s current performance management documentation will likely cause some degree of discomfort, if not concern.? Why?? Because few employers routinely assess whether the materials used make sense even in the context of the purpose for which reviews serve ? to accurately review employee performance. So when employers undertake a critical review of their performance management documentation and processes, they often see with crystal clarity, the degree to which they have not only failed to achieve the intended consequence of evaluating performance in a meaningful way (i.e., that is tied to company objectives) but that they have lost out on the opportunity to exploit the invaluable information that the performance management process yields.

Even minor adjustments to documentation and/or process can enable employers to more effectively drive employee behavior and accountability while simultaneously promoting transparency, communication, employee engagement and strategic alignment of people with company objectives. If it has been a while since your company has evaluated its evaluation system, we encourage you to do so.? To aid you in this effort, we have outlined below various factors that serve as an effective starting point for doing so.? Of course, every employer?s cultural and strategic objectives are unique.? That means that to the extent that your company is confronting unique issues related to competitive threats, cultural dynamics, revenue growth, or strategic re-direction, an effort to align rating factors with those unique issues, opportunities, or threats should be made.

Quick Employer ?Performance Measurement? Assessment: ??So?how well are you doing? Answer these 10 simple questions below to find out. Use a 5-point scale? to give yourself a number for each question, with 1 being the lowest and 5 being the highest.? Tally your total score in order to evaluate your company?s overall performance measurement utility as outlined in the ?Results? section below. Be honest.

  1. The rating criteria are tied to true customer-focused competitive differentiators specific to each position (versus purely internal-focused and one size fits all)
  2. The rating categories are weighted based on importance (versus all treated equally)
  3. Stated objectives are clear and measurable (versus vague and subjective)
  4. The process is subject to review to ensure that evaluators provide candid, honest feedback
  5. The ratings actually result in differentiation among employees (versus most if not all receiving similar scores)
  6. Performance input is obtained from multiple sources, including subordinates, peers, managers and key customers (versus manager only)
  7. The evaluation measures both the ?what? (results) and the ?how? (behavior, collaboration, people, management and ethics)
  8. Progress versus attainment of objectives is part of a regular ongoing discussion with employees (versus a form based one-time only annual meeting)
  9. Leadership, including top executives use the system
  10. Performance evaluations are closely linked with incentives, promotions, and terminations

Results:

0-15 points ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Ugh
16-25 points??????????????????????????? Improvement Needed/High Risk
26-33 points??????????????????????????? Improvement Needed/Medium Risk
34-40 points??????????????????????????? Doing Okay
41-50 points??????????????????????????? Keep it Up!

In closing, remember that the review process succeeds or fails by virtue of both design and implementation.? Although the focus of this blawg was on the design of performance rating systems, it is equally important to adequately assess how well these programs are implemented and managed. ?In this regard, employers are wise to ensure that managers are properly trained on effective review processes and that they understand why performance is measured against the identified factors. Perhaps most important of all is the need to ensure that management drives the desired behavior by adhering to the spirit and letter of the policy and process itself. Without management buy-in, the utility of the?exercise, and thus the data that results, is rendered nearly useless.

SMART TIP:? I was once counseled by a personal fitness trainer that if it can?t be measured, it?doesn’t?count.? I carry that with me on multiple levels in life professionally and personally.? With this in mind, I encourage employers to take the time to devise and implement a meaningful performance management system; mine the data that the system yields; analyze the data; and commit to making needed adjustments.