Human Resources News & Insights

State of the performance review 2017: What the best companies are doing today

Performance reviews. Everybody agrees that the old approach — sit the employee down and tell them where they’ve been underperforming for the past 12 months — just doesn’t work.  So what does?  

HighGround, which offers a cloud platform to help managers and employees communicate, recently released a study on the state of performance reviews, and offers some new insights on how companies are striving to improve the process. The researchers talked to two groups of 525: managers and rank-and-file employees.

Here’s a sampling:

First, an overall look. Between both groups, the researchers found:

  • Annual performance reviews are no longer the norm. The majority of managers and employees hold – and appreciate – more frequent conversations.
  • Manager and employee conversations are still too one-sided. Most managers don’t use them as an opportunity to get feedback and identify ways to improve their performance as leaders.
  • Introducing peer-to-peer feedback into the performance evaluation lifecycle reduces employee anxiety surrounding these check-ins and improves employees’ and managers’ satisfaction with their outcomes.
  • Employees across all generations prefer in-person conversations to email, formal written reviews and instant messaging.
  • Millennial managers in particular are leading the push for more frequent goal-setting.

Let’s begin with timing. The informal “check-in” conversation is emerging as an effective tool, especially among younger managers. Just 7% of managers report only having them annually. For the rest, conversations are more frequent: 51% of managers say they hold check-ins with employees at least once a week.

Among Millennial managers, those between the ages of 18 and 35, 58% hold at least weekly check-ins, compared to only 39% of their Baby Boomer (52-70 years old) counterparts.

What’s covered in these check-in sessions? Much of the time, these conversations go beyond quotas and deadlines to focus on performance and development, Highground said. Of the managers who meet with their employees at least weekly, 61% say they use that time to address the employee’s personal performance goals, while 29% discuss career progress and advancement.

More is more

According to the report, the more frequently managers check in with their employees, the more effective those conversations seem to be. Among managers who hold at least weekly conversations, 73% strongly feel these meetings help them better track their employees’ progress.

This percentage steadily declines the less frequently development conversations are held; 67% of managers who have monthly check-ins strongly feel they improve progress tracking, compared to 52% who do so biannually or annually. Among employees, positive feelings toward performance conversations are also linked to frequency: The more often they discuss performance with their manager, the more likely they are to feel strongly that these meetings lead to better work, per the report.

‘How can I do better?’

Here’s a key passage in the HighGround report: While most conversations touch on employee-centric issues, the majority don’t address company performance goals (only 46% do this) or managers’ own performance.

Only 43% of managers use these meetings to ask their employees, “How can I be a better manager to you?” When managers don’t use the opportunity to talk about their own and the company’s performance, check-ins turn into one-way conversations, HighGround warns.

Other key findings in the report:

  • There’s no replacing the human element when it comes to performance conversations. In-person remains the check-in method of choice for both managers (78%) and employees (69%).
  • Annual goal-setting has become an outmoded solution for a constantly changing workplace. Millennial managers are leading the charge to do it more frequently. Instead of having their employees set goals once a year, 82% of Millennial managers ask their workers to establish goals quarterly or more often.
  • One reason younger managers prioritize more frequent goal-setting may be because they observe better employee performance from the regular check-in structure. While only 46% of Baby Boomer managers strongly believe their employees do better work because of performance conversations, 59% of Millennial managers feel this way.

The full report is titled Beyond the Annual Review: The Transformative State of Performance Conversations.

 

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