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A practical look at building and implementing your perfect performance management process.

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Best Practices for Building a Performance Management Metrics Strategy

HR leaders are often tasked with creating, or revising/overhauling their organizations' performance management metrics strategy.

HR leaders are often tasked with creating, or revising/overhauling their organizations' performance management metrics strategy, and making recommendations to senior leadership about what they feel needs to be done. That can be a daunting task. Today’s HR professionals, fortunately, have access to the data and technology they need to help them not simply “come up with metrics,” but to design a performance management strategy aligned with corporate goals and strategic objectives. That’s the way to earn that coveted seat at the table and the respect of senior leaders and board members.

So how do you get there? Here we take a look at some best practices for building a performance management metrics strategy that will resonate with senior leaders. 

Alignment to Strategic Objectives

This is where it all begins—or where it should. What your organization is trying to achieve should serve as the starting point for your consideration of the metrics to be used in performance management. Where can you find this information? In your annual report or strategic plan if your company has one. If not, through conversations with your CEO, CFO, and other members of the leadership team.

What is the organization’s mission, vision, and values? What’s important to the organization? How does it make money (this is important for not-for-profit as well as for-profit organizations)? Unless you understand the answers to these critical questions it will be literally impossible to develop a performance management system that matters.

Focusing on Both Tactical and Adaptive Performance

Organizations long ago learned that they could quickly focus on tactical metrics to measure performance—things like absenteeism, showing up on time, etc. Some even progressed into more business-related metrics like sales, customer satisfaction scores, etc.

There’s nothing inherently wrong with these types of measures. However, they don’t really give a full picture perspective of performance. Worse, they don’t provide any insights into to what extent the organization is building capabilities for innovation and future success. These are adaptative performance measures which high-performing companies have learned to build into their performance management metrics strategies.

Are you looking for people who just show up consistently? Or, are you looking for people who can adapt to a dynamic environment? Only you can answer those—or other—questions to help you determine what it is that your organization truly values in employees. Based on the answers, you would then come up with metrics to help you measure how well your employees are delivered on that value.

Overall Performance or A Focus on Key Competencies?

What constitutes a great employee in your organization? What are the core competencies and capabilities they possess that leads them to perform well? Do you know?

Many organizations manage performance at an overall level. This is the most simple way to manage performance and, again, there is nothing inherently wrong with taking this approach. However, the more you can drill down into the sub-elements of performance that really drive success, the more you can customize metrics across divisions, departments, roles, etc.

Goal Driven Performance Assessment

Another approach that organizations take to performance management is evaluating performance based on goal attainment. Those goals might be organization-wide (e.g., quarterly sales goals), division or department-specific (e.g., error rates, quality outcomes), or individual (e.g., achieving specific outcomes or deliverables).

Finding the “Right” Approach

Your company and its strategic priorities, as well as your internal capabilities to gather and analyze various metrics, will determine the appropriate approach for you. There is no handy “one-size-fits-all” solution. And, in fact, despite widespread coverage of trendy performance management approach—like OKRs or “objectives and key results”—there is no one “right” approach, there is only your approach.

It can be helpful, though, to consider how other organizations have approached performance management, and the approaches they use to identify and use meaningful metrics while monitoring performance over time.

Wells Fargo is an example of an organization that once focused on tactical execution. An overly aggressive and singular focus on earnings led employees to take any means necessary to meet their numbers—including opening accounts without customer authorizations. That was in 2016, when the company agreed to pay $185 to settle a lawsuit with federal regulators and the county of Los Angeles. Over time, Wells Fargo has changed its approach to performance management. They provide a good example, unfortunately, of what can go wrong when companies focus only on tactical metrics.

Netflix is an organization with a strong commitment to culture. So strong, that back in 2009 then Talent Officer Patty McCord and CEO Reed Hasting, published a Netflix Culture Deck to provide clarity to the organization—all members of the organization—around what Netflix valued. They then took what some believe to be a radical approach to performance management—they were one of the first companies to boldly do away with the traditional annual performance review. Instead they shifted to a performance management process that focused on what they felt was most important—their cultural norms—and created a 360-degree, transparent (reviews are made public), and ongoing form of evaluation.

Deloitte approaches performance management somewhat differently. Like Netflix, they also eliminated annual reviews, and they eliminated cascading objectives. They shifted to a new approach that, according to an article in Harvard Business Review, has hallmarks that include “speed, agility, one-size-fits-one, and constant learning.” It’s an approach made possible by the availability of reliable performance data.

Keep in mind, though, that the approaches that have worked for these organizations may not work for yours—in fact, what worked for them probably won’t work for yours. Why? Because you’re different. You have a unique culture, unique market, unique product or service, unique vision/mission, and unique strategic objectives.

In determining the right approach for you, there are some important things you need to consider.

  • Your purpose. Your starting point in considering the right approach for your organization is your purpose. Why are you doing performance management? What results do you believe it will drive in your organization?
  • Can reviewers actually and accurately measure what you’re trying to measure? It’s not uncommon for organizations to measure leadership potential. But will your organization’s managers actually be able to measure leadership potential among their employees?
  • Can you capture the data cost-effectively? Just because something can be measured, doesn’t mean that it should. You need to consider how it will be measured, the cost of measurement and the value of the information you’re gathering.
  • Do metrics tie back to key organizational goals and objectives?

So once you’ve considered all of these factors and come up with a performance management metrics strategy, your job is done, right? Wrong! Performance management isn’t a static organizational function. It’s iterative and ongoing. As you monitor metrics and have discussions around them, and as your internal and external environment changes based on anything from new emerging competition to global pandemics, your metrics will need to change. What’s important today may not be important tomorrow.

Having a process though for clearly and carefully considering the tie between performance metrics and organization performance, the options available to you, what your organization needs, and your organization’s capacity to capture the right information will help you develop a flexible approach for today and tomorrow—an approach that your organizational leaders will clearly see the value of. 

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9/17/2021
360 Performance Review Process 2021 Guide

360 reviews are about more than peers providing feedback to an employee; it’s about gaining a holistic view of how each employee functions within their respective department and within the greater company. Getting this process right requires considering a host of factors: visibility, anonymity, nominations, staging, question types. The sheer number of variables can be daunting. 

PerformYard understands that nailing the process is key to the success of any 360 program. We have helped hundreds of organizations implement 360 review processes  that are effective and streamlined. 

Let’s take a look at some real-world tactics you can implement to run a successful 360 review process.

Why process is so important for 360s

Process is important for 360s, because employees are asked to provide feedback to colleagues who fall outside of their traditional work hierarchy. 

Instead of having a manager review a direct hire, employees from all different levels are providing feedback for other employees also at different levels within an organization. With each additional exchange beyond manager to direct hire, you increase the opportunity for conflict to arise. 

Some employees, fearing conflict, may be hesitant to write anything but positive feedback. Others, not versed in providing constructive feedback, may cause unnecessary conflict by providing poorly presented feedback.  

A focused 360 review process gives your employees a helpful guiding system to keep their feedback meaningful and useful. Process will help you generate better feedback, filter it, and present it in the most effective way.

With the risk of office friction, hurt feelings, wasted time, and strategic confusion; it is critical that we get the 360 review process right. 

Start with the purpose of 360s

When you’re building out your process, it’s important to keep the purpose of the 360 review cycle at the center. 

The true purpose of a 360 review is to give managers and employees a broader number of perspectives on performance. Through 360s, you collect a more diverse set of ideas about what employees are doing well and what they can improve on. Leadership, the manager and the employee get\ to see a fuller picture of their performance, rather than just a single opinion.

Often peers or supervisors will have a perspective on an employee that their manager does not. This perspective is often missed in a traditional review process, but picked up with a 360 review. 360s are especially useful for collecting perspectives when a manager is not always directly working with the employee, such as when employees work on project teams or have a cross-functional relationship with different departments.

Setting the purpose of surfacing diverse feedback will help guide the rest of our decisions, and ultimately help us get new perspectives and diverse ideas. 

Four key questions to answer

There are four key questions that your organization needs to answer to create your effective 360 process. Your answers should be unique to your organization so that your 360 review process can reflect your organization’s needs.

Getting the right answers to these questions is critical to building an effective 360 process. Be honest and be thoughtful. 

1. Who will see the feedback and reviewers? 

In the traditional review, the employee and manager are the only people who contribute to a review. With a 360 process, this is not necessarily the case -- peer reviewers include feedback. 

You need to decide how your employees will receive their 360 feedback. You can choose to present feedback raw, you can have managers or HR sign-off on feedback first, you can have managers filter the feedback, or you can even have managers read and summarize the feedback to their employee. Each of these options presents pros and cons.

Raw feedback, for example, allows employees to understand how their peers see their performance. However, it can exacerbate the effects of inappropriate comments and will likely present a less-than-clear picture of what the employee should focus on.

On the other hand, If the manager reads and summarizes the feedback and that’s all the employee sees, they may wonder how accurate a portrayal of the peer feedback the manager’s summary is.

You should make this decision based on how well your employees give and receive feedback. At a minimum, we’d suggest the manager or HR sign-off on all feedback and have the manager summarize everything into a cohesive narrative.

The second part of the question, as mentioned earlier, is whether employee feedback will be anonymous for the receiver. Making this decision often boils down to how well your employees have been trained in giving feedback. 

If employee feedback isn’t constructive and focuses too much on personality issues, then the feedback can cause conflict and distrust. We suggest that you present anonymous or summarized feedback until your employees have had a few review cycles to become acclimated to this holistic feedback approach. 

As you continue to train your employees, and they become more comfortable with 360 feedback, you can adjust the process to align with your company’s strategic vision.

2. How will you stage the process?

Unlike a simple manager review, 360 reviews include multiple steps in the process. It’s important to make sure you give yourself enough time to account for these additional steps.

Typically the process starts with a nomination period if necessary. Then peer and self-reviews are completed first, followed by sign-offs, the manager review, final sign-offs, and then a review meeting between the manager and employee. 

Consider the number of peer and manager reviews your employees will need to complete to determine a timeframe. 1-2 weeks is typically an appropriate amount of time for each employee to submit their reviews. Longer than that will result in a dragged out process. Besides, employees will typically wait until the last week anyway, so no need to give extra time to procrastinate!

Scheduling review meetings should be given the same amount of time: 1-2 weeks. This way, everyone can plan for and make time on their calendars for a dedicated review period, as opposed to haphazardly slotting people in over a month or longer.

Another important stage in the process is how the feedback form is presented to the employee. You could choose to present the completed feedback forms to the employee ahead of the review meeting. This allows the employee to read, digest and prepare for an effective conversation. It’s important not to share these forms too far ahead of the meeting, however, as a lot of important context will be shared during the discussion, and you don’t want employees to stew over misunderstandings. Less than 24 hours is a good time frame. 

Alternatively, you could present all the feedback forms after the meeting as support/summary of what was discussed. This puts the employee at a disadvantage and could result in less effective discussions. 

All of these stages add up, and adding unnecessary time into each stage can stretch a few review weeks into a review quarter. Be judicious with your timeline.  

3. What will you ask peer reviewers?

When creating review questions, remember that most peer reviewers are probably not trained to give accurately calibrated ratings or answer detailed competency questions.

That’s ok. That’s not the purpose of peer reviews. We’re not looking for a final determination from peer reviewers; we’re looking for more perspectives. Stick with high level questions that draw out details you won’t get from a manager review.

Some classic 360 questions are, “What does the employee do well? Share examples,” “What can the employee improve on? Support with examples,” and, “Share examples of how the employee lives up to x or y key values.” 

Always ask for specific examples as they keep reviewers focused on actions rather than opinions of character. Examples will increase clarity and reduce “she-said-he-said” if there is disagreement between peers.

As a general rule, a few open-ended and high level questions work best. A simple form keeps the process moving rather than bogging down employees who will often need to complete several peer reviews per cycle.

4. Who will review whom?

The selection of peers can be a challenge. Most employees will have one manager, which makes it easy to know who will complete the manager review. However employees can have many qualifying peers, so it becomes difficult to determine who reviews whom and who chooses these reviewers.

We’ve found that there are two variables you can use to easily determine who reviews whom: 

  • What are the criteria for qualifying peers?
  • How many peer review forms will each employee complete? 

Once you determine the answers to these two variables, you arrive at a much more manageable and stable pool of potential peer reviewers. 

A common approach is to give employees a fairly detailed list of criteria, and then let the employees nominate whoever they want peer reviews from who match the aforementioned criteria. Managers and HR will then check the nominations to ensure they are qualified before moving ahead.

When it comes to the volume of reviews, we believe that the number of peer reviews should be balanced based on how much you’re asking from each peer reviewer and how much feedback you want to solicit. We’ve seen companies do 10+ peer reviews per employee and use a very easy to fill out form. Other companies choose to do just 2-5 peer reviews and ask a bit more in the form.

Importantly, 360s reviews shouldn’t come from only peers. Because your purpose is to solicit diverse feedback, the most valuable perspectives could be from multiple supervisors, direct reports or even clients. Make sure that each employee has a balanced list of reviewers so that they get a holistic look at their performance.

The 360 review process step by step

You’ve answered your four key questions. Congrats! Now it’s time to set up your successful 360 review process. 
Let’s go through the steps together.

Step 1: Train reviewers

Letting your employees figure out how to give constructive feedback on their own can quickly turn into a nightmare with feedback that is vague, overly negative, or plain unhelpful. 

You should give your raters general guidance before the 360 surveys are sent out to ensure their feedback is productive. We have included an email template in this article that provides some helpful feedback guidelines as well as links to some helpful resources. Feel free to borrow it!

When training reviewers, give models of good positive and negative feedback. Instead of focusing on who the employee is as a person, feedback should talk about specific actions and impacts. Reviewers should write specific examples for both positive and negative feedback. Negative feedback should include things employees can do better. Focus on actions, not personalities. 

It’s also important to explain why 360s are valuable to your organization. Take the time to show how 360s can be great for career development. When people know why they’re giving feedback, they’re more likely to give feedback you can use.

We believe that comprehensive training on feedback would be best -- such as an in-person or livestreamed presentation -- but even a short clear email at the start of the process will make a big difference.

Step 2: Nominate reviewers

Create clear nomination criteria and then carve out a separate time period for employees or their managers to nominate who will provide peer reviews. For small organizations, consider having HR complete the nominations if this is feasible.

Make sure you have a due date for nominations. You’ll need all the reviewers and reviewees determined before moving into peer reviews, so setting an early deadline will reduce the odds of a bottleneck in your process.

Don’t just assume the nominations will happen. Send reminder emails throughout the deadline week, and give yourself time to track down everyone who misses the deadline. Trust us, there will be people who miss the deadline. 

Lastly, build in some time for HR or managers to review the nominations before proceeding to the reviews.

Step 3: Launch the cycle

Do not go small on the launch. 

Everyone will be busy with their own work, and it’s easy to miss or ignore the launch of the review cycle if it’s confined to a single email. You need to amplify the message.

Jump into department meetings. Ask your CEO to send an all-company email. Send another email a week ahead of the launch to get people thinking about what they’ll write. Send another email with a short guide to giving feedback. Send an email the day before with an overview of the process. Finally, send an email the day of announcing the forms are live.

You’ll know the right balance for your organization, but don’t be afraid to go big. 

As the cycle progresses, don’t be afraid to keep sending updates and reminders even before the forms are overdue. Occasionally letting everyone know how many of their peers have already completed their forms and reminding them of the due date can keep your process top of mind.

Step 4: Collect feedback

Collecting feedback, passing along feedback, and alerting the next person in the process comprises one of the most critical, yet underlooked components in the 360 process. 

If you’re unprepared, this is where things will get clunky -- forms will get lost or delayed, and everything can get bogged down. In the worst case, reviewers may misunderstand the process and email a raw review form directly to the reviewee. Yikes!

To prevent this, HR should either create very clear guidelines for who employees need to pass forms to, or HR should act as the central dispatch, receiving and sending out the forms themselves. 

Either of these work great, but if you’re really looking to streamline your process, you should look into performance management software, which completes these steps automatically.

Step 5: Review/sign-off/analyze

After all feedback is collected, managers or HR should read each form to make sure the feedback lives up to the standards of your feedback training. Follow up on any conflicting or vague information. Managers should pay special attention to trends across multiple reviews, building a holistic view of the employee in question. 

Don’t skimp on this step. The manager should be prepared to help the reviewed employee interpret the feedback and understand how to best act upon it.

Step 6: Bring feedback together

Think about how you’d like to share the feedback with your employees. We’ve found that showing the feedback from multiple peer reviewers inline, along with a manager’s commentary, followed by a summary from the manager, makes all the feedback easier to understand for the employee. 

Step 7: Present feedback to employee

Shortly before an employee’s review meeting with their manager, send the employee a copy of their review forms. This gives the employee time to digest the feedback and prepare for the meeting. 

Not everyone is calm under fire, and if you present an employee with unexpectedly negative feedback in the meeting, they may get flustered and not be able to have a constructive conversation. After a few hours or even a day, everyone has had time to compose themselves and think about what they want to say.

On the other hand, it is best to not wait too long, as employees may stew on feedback without the ability to discuss this with a manager. 

But -- and this is important -- not all feedback is negative. A lot is positive! Many employees will receive positive and constructive feedback. Receiving this ahead of the in-person meeting will still allow the employee to focus on the points raised, and help ensure the conversation is productive. 

Step 8: Discuss feedback with employee

Set aside plenty of time to have a thorough discussion of the employee’s feedback. This meeting is what everything has been building towards. The result of a peer review is not a bunch of filled out forms — it’s an informed and productive discussion of past and future performance between a manager and employee. 

The manager should give the employee ample time to share their own thoughts on their performance and focus the discussion on how the feedback can be translated into productive future action. 

This is how employee development happens. A productive 360 review process will give an employee a clear view of their own standing in the organization as well as a strong path forward. 

360 Case Studies

Let’s take a look at some notable companies who implement 360s in their review cycle. Maybe one of these will end up being a great match for you!

Egg Strategy

Egg Strategy is a consulting firm that runs 360 reviews after every project. This results in a lot of 360s -- some employees can get upwards of thirty a year. The questions are qualitative and touch on specific qualities of participating in the project. The feedback had been anonymous, but Egg Strategy recently shifted to open feedback after they trained employees on delivering high quality feedback.

Five-Star Technology

Five-Star Technology is an IT consulting company that uses 360s as part of their annual review process. The peer feedback asks how employees live up to the six core values of the organization. Managers then go through a process called “qualitative coding,” where they compile quotes on each core value and then create a cohesive picture on the employee's performance. Sometimes, the lack of positive feedback around a core value can be very enlightening as to where deficiencies lie. 

J2 Interactive

J2 Interactive, a technology services firm, runs annual 360s. Each review cycle includes feedback from 5-10 people, such as account managers, peers, clients and direct reports. The feedback forms ask a few open-ended questions on examples of success and areas for improvement. All the feedback is reviewed by a manager and the employee’s mentor. These two people discuss the feedback with the employee in question. Following the meeting, the reviewers write up their summary of the feedback, discussion, and next steps.

Netflix

Netflix has a bold and famous 360 review process where anyone can review anyone else in the company. Employees use an online form to tell each other what they should stop, start, or continue. As an added layer of transparency, everyone up the chain of command has access to your 360 review.

This may seem like an extremely high-pressure way to collect feedback, but 360s are separate from compensation reviews. That way, no one worries about how their feedback will affect the pay of themselves and their coworkers. Netflix also has a hard-earned feedback culture that is regularly reinforced.

360s In PerformYard

PerformYard makes the 360 process streamlined and automated. Gone are the days of chasing down forms, emailing raw feedback to HR, and manually delivering the results to each manager. 

Now, HR can easily set permissions, quickly send reminders, collect feedback, and examine employee trends all in a single platform. 

Let’s take a quick look at how you can run your 360 process through PerformYard. 

Set up your cycle

Your HR team (or whoever is an admin in PerformYard) can quickly set up settings for each 360 review cycle. These settings, which will all be set before any reviewer even gets nominated, will cover every aspect of the 360 process. This means nominations, notifications, approvals, data collection, and feedback dissemination. The entire process is streamlined and set up in advance. 

Set up your nominations

PerformYard has four typical ways in which reviewers are selected. 

The first is by an employee requesting to review another employee. The second is by an employee requesting that another person review them. The third is for a manager to request that employee x review employee y. The last is that HR creates all the peer reviews.

HR has the ability to set permissions -- companywide -- that limit or expand who employees can request for reviews. Admins can also require manager or HR sign offs on each requested review, ensuring that each review is for a valid reason. 

What you’re doing here is delegating the nomination step down to the manager and employee level -- with guardrails put in place. Now, a manager and an employee can choose who are the correct reviewers for the 360 process, without having HR get bogged down in the process. 

Set up your due dates and reminders 

With your PerformYard admin account, you can quickly set up uniform due dates for every step of the process. Due dates for nominations? Check. Due dates for feedback? Check? Due dates for manager review? You can see where this is going. 

Every time an employee completes a step, this information is automatically recorded in PerformYard. But, sometimes employees forget (we’re all human!), and so reminders need to be sent. 
Not to worry, you can easily set reminder emails to go out whenever a due date is missed. These emails will contain a link directly to the form the employee needs to complete, helping reduce further delays. 

Set up your 360 forms

PerformYard has flexible 360 form templates that you can customize however you need for your organization. You can modify the form so that the peer review is different than the manager review, which is different than the self review. 

As a general rule, a few open-ended and high level questions work best. A simple form keeps the process moving rather than bogging down employees who will often need to complete several peer reviews per cycle

Once all your forms and permissions are set, it’s time to launch your cycle!

Launch the review cycle

Launch your 360 process! Once triggered, PerformYard will send an email to all employees containing links that will bring them directly to their next step in the process.

First, they’ll complete nominations. Once the nomination process has run its course, PerformYard will send another email launching the review portion. This email will have a link to where each employee completes their necessary reviews. 

As always, if anyone is behind in the process, PerformYard will send a reminder email, prodding them to finish their outstanding task. 

Manager review and sign off 

After all reviews have been completed, managers will gain access to the 360 feedback for each of their employees. From there, they will be prompted to review, summarize, or prepare the feedback as your organization sees appropriate. Additionally, managers will have access to peer review as they complete their own reviews of their employees. 

Once manager reviews and sign offs are completed, PerformYard will automatically disseminate the feedback to employees per the permissions you have established. 

We made it! 

And that’s it! Thanks to PerformYard’s streamlined review process, the entire 360 experience has been streamlined and formalized. All feedback is easily stored and accessed through one software, allowing admin and managers easy access to performance insights and metrics, making employee evaluations and development discussions more transparent and understandable. 

We’re pretty proud of how easy PerformYard makes the review process, and hopeful that you’ll partner with us in the near future!

360s Process Templates

360s are a bit daunting if you’ve never rolled one out before. To make their adoption easier, we’ve included two templates -- a training email template and a review questions template. Feel free to borrow these!

Training reviewers template

This month, we’re kicking off our 360 review process. You will be asked to give open-ended feedback on your colleagues. As you write this feedback, please keep a couple of things in mind.

One, focus on actions, not personalities. Write about specific actions and impacts that you’ve seen from your colleagues.

Two, focus on the positives, but don’t forget the negatives. Suggest ways your colleagues can improve on their weaknesses.

Three, give helpful feedback. Simply writing “Jane does a good job” is not helpful for Jane. Why is Jane doing a good job? What should she continue doing?

An example of helpful feedback would be “Jane is doing a great job at connecting with customers. She is truly concerned for their well-being. I see this in the way she remembers their birthdays and other life events. Jane could do better at getting back to customers in a timely manner. Sometimes customers email me when Jane hasn’t replied to them in a few days.”

Review questions template

Manager Form

  1. How have you seen this employee perform well in the last year? Give three specific examples.
  2. What are three specific things this employee should work on in their performance? Give examples.
  3. How has your experience overall been working with this employee. Give examples.
  4. Is there any other information you wish to share?

Peer Form

  1. Share examples of when this employee contributed at a very high level.
  2. Share examples of when this employee could have done better.
  3. Would you always want to have this employee on your immediate team? (Yes/No)

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Free 360 Employee Review Template

360 reviews broaden our sources of feedback in a performance management process.

Click here to download:

PDF - PerformYard's 360 Review Template

Why 360 reviews?

360 reviews broaden our sources of feedback in a performance management process. For development focused approaches especially, it can be helpful for employees to get feedback from not just their manager, but everyone they work with.

360s are particularly useful in matrixed or project based organizations where employees work with many different people throughout the organization. Sometimes an employees manager isn’t even the best person to provide feedback, and so going to the people who know the employee best requires a 360 approach.

Goals of a 360 review

An effective 360 review will solicit diverse feedback from people with different relationships to the employee and from different levels of the organization. That feedback will then be synthesized and discussed with a manager or mentor to help make sense of what to do with it.

Great 360 processes don’t just collect a lot of feedback and throw it on the employee with no guidance or next steps. Instead they include time for discussion and goal setting to turn conversation into action.

Managing the process

A high quality 360 process will be run in stages. The first stage is nomination, when the feedback providers for each employee are decided. That is followed by people completing their feedback forms. Then HR or managers should review feedback and either get clarity or help frame it more constructively. Next managers should synthesize feedback in their own review and help determine next steps. Lastly, managers and employees should get together to discuss the feedback that has been provided.

This staging is discussed in more detail in the above template.

Frequently Asked Questions

What is a 360 review template?

A 360 review template provides HR professionals a process and questionnaires in order to run a 360 review process at their organization.

How do I create a 360 degree feedback form?

360 review feedback forms should be kept relatively short and simple, as employees will likely be asked to fill out several with each cycle. Focus on examples of positive contributions and areas for improvement.

What should I ask in a 360 review?

360 review forms should ask for examples of positive contributions and areas for improvement. The purpose of 360s is to get diverse perspectives, and so focusing on examples and qualitative feedback is most important.

How many questions should a 360 have?

Keep 360 review forms to just a few questions. As few as two and as many as six will work well. Employees will often be asked to complete several forms during each cycle, and so keeping them short helps move the process forward.

What is a 360 evaluation process?

A 360 evaluation process will find the right people to provide feedback for an employee, solicit feedback from those people, review the feedback in a sign-off step, synthesize feedback into a cohesive narrative, and finally present the feedback to the employee.

What is a 360 assessment question?

360 assessment questions focus on examples of positive impact and examples of opportunities for improvement. They can also ask for ratings of overall performance or yes/no feedback on things like “would you want to have this employee on your team in the future?”

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8/14/2021
360 Degree Feedback Software for Performance Reviews

The 360 Degree Feedback process gives your company a holistic view of how each of your employees performs within your organization. PerformYard’s easy-to-use performance management platform makes exec

The 360 Degree Feedback process gives your company a holistic view of how each of your employees performs within your organization. PerformYard’s easy-to-use performance management platform makes executing 360s simple and consistent, providing HR, managers and employees with diverse feedback and performance data. 

360 Feedback software should handle every stage of the 360 process and streamlines the flow of information throughout your cycle. Look for features to facilitate nominations, create staged review cycles, manage sign-offs, aggregate data and make the process simple for employees. 

PerformYard is a top rated 360 degree feedback system. Connect with our team to see if PerformYard can streamline your process. Click here to see PerformYard.

PerformYard’s Approach to 360 Reviews...

PerformYard believes that the most effective 360s processes focus on great feedback and engaged employees. Therefore the best 360 feedback software should streamline and simplify the process so employees can spend more time with what matters, the feedback, and less time on trying to figure out workflows.

PerformYard gives HR teams the flexibility they need to design the right 360 process for their organization. Choose who can nominate who and if it requires sign-off, choose who can see feedback and if it is anonymous, create multiple stages like peer feedback stage followed by manager feedback stage, use any type of question you’d like, etc. HR teams get unlimited flexibility to setup the process they need.

Then PerformYard will manage the cycle for you, alerting employees to complete each next step in the process. Employees get brought directly to what they need to do next, no need to remember how to use the software, just click the link and sign-off, give feedback, nominate a reviewer, whatever is needed at that moment.

We sum up our approach as flexible features for HR and a simple employee experience.

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Key Features of 360 Reviews in PerformYard

Here are a few key features that show how PerformYard sets your 360 review process up for success.

Streamline Peer Nominations

One of the largest administrative challenges of 360s is establishing who will review whom. Often the relationships aren’t clearly defined on any organizational chart. Someone on your Analytics team may have spent a lot of time working with Marketing this year, but last year they did more projects with Finance, HR often won’t know that. That’s why a nomination process is so important.

PerformYard allows a lot of flexibility here, HR can choose to have employees request feedback from peers, have peers offer to give feedback, have managers define peer feedback relationships, or HR can setup the peer reviews. All of these options can also include a sign-off step where either a manager or HR approves the peer feedback assignment.

Control Feedback with Anonymity, Visibility and Sign-Offs

During 360 reviews employees from all different levels are providing feedback for other employees also at different levels. Some individual contributors may not be familiar with providing constructive feedback, and some employees may be uncomfortable providing feedback outside of the established hierarchy. 

Each exchange of feedback is an opportunity for conflict to arise. That’s why controls are so important. Not every organization has a culture of transparent feedback. Anonymizing feedback, hiding feedback altogether, or having managers/HR sign-off on feedback all help your organization ease into using diverse sources of feedback. 

After a few cycles of experience and training, you can choose to move to a more open feedback strategy, or not. 

Create Multiple Stages

The best 360 strategies use staging to manage their process. Often the 360 will have period where self, peer and external feedback is collected. Then another stage where that feedback is reviewed and potentially sent back to get more clarity. Then managers synthesize the feedback into a clearer narrative with next steps. And finally the manager and employee meet to discuss.

A staged process enriches your entire strategy because it allows everyone to digest and react to the feedback, and then decide on next steps. Your 360 process should not be about collecting pieces of paper that get forgotten, it should build to a productive conversation between an employee and their manager about all the opportunities that the feedback has uncovered. Staging your process facilitates this.

Integrate 360s with Your Performance Management Strategy

It’s important to remember that 360s work best as part of a larger performance management strategy. At the end of a 360 will you set goals for development and then followup on those goals in check-ins throughout the year? When peers and managers are writing their feedback should they work from memory, or use the performance notes they’ve been keeping all year?

That’s why PerformYard offers an entire suite of performance management tools, so you can manage all elements of your strategy in one place. Bring together 360s, check-ins, goals, feedback, recognition, performance notes and a lot more to build the strategy that’s right for your organization.

Benefits of Using PerformYard for 360 Reviews

360 reviews are a useful performance management tool that you can use to increase self-awareness, transparency and performance at your organization. Because 360 reviews require feedback from multiple team members, they often lead to profound benefits, such as increased communication, trust among teammates, and an understanding of how each employee affects the greater organization. While 360 reviews may be more involved than a traditional manager-employee review process, the holistic feedback they provide can help drive company strategy and more accurately detect high performing employees.

Information technology company J2, who usePerformYard to manage their 360 reviews, had this to say about why they chose the 360 review process: 

“360 reviews have become a big part of our process over the last couple of years. People move around a lot, interact with lots of employees, and contribute to many projects; so feedback from many sources is really important.” 

-- Heather Capel, Vice President of Professional Services.

When manually completed, The 360 review process can be overwhelmed by the sheer number of forms, spreadsheets, and emails necessary to gather and approve all of the feedback. 

PerformYard is a streamlined solution to this manual madness. We provide an easy-to-use interface where your employees and managers can fill out forms and submit them directly to the people who need them without reminders and email threads. See for yourself how easy it is to run 360 reviews in PerformYard.

Click Here to See PerformYard in Action

What is 360 Degree Feedback Software

360 feedback software helps HR teams manage the 360 review process. The best software will manage nominations, distribute forms, send reminders, organize sign-offs, collect and redistribute feedback, manage performance data and offer analytics. Managing more than a few 360s manually can be overwhelming, so software plays an important role.

Resources Related to 360 Performance Appraisals

Interested in reading more about 360s? Here are some excellent resources that we recommend to get your research going. 

Getting the Most Out of 360-Degree Reviews (Harvard Business Review)

The Purpose of Peer Reviews in 360s

How J2 Interactive Collects 360 Feedback for 150 Distributed Employees

Do 360 evaluations work? (American Psychological Association)

How Netflix Uses 360 Reviews for Performance Management

Frequently Asked Questions About 360 Degree Feedback

What is a 360 degree feedback process?

An administrator kicks off the 360 review by providing forms to the reviewers and reviewee. The reviewers typically include peers and managers. Reviewers then submit feedback, which is compiled by the manager and/or HR. This compiled feedback is potentially anonymized or summarized before being shared with the reviewee. 

What are the pros and cons of 360 degree feedback?

Pros of 360 degree feedback include: 

  • A holistic look at an employee’s performance
  • Improved team communication
  • Improved company and team transparency
  • Increased employee self-awareness. 

 The cons of 360 degree feedback are: 

  • Extensive review training is required to ensure employees provide actionable feedback
  • Team performance may suffer if negative, personal feedback is presented
  • So much feedback can result in data overload.

Making the decision to adopt 360 degree feedback reviews is not something a company takes lightly. See more of the pros and cons of 360 reviews to decide if this process is right for you. 

How much does a 360 performance review tool cost?

Performance management software is typically priced in three ways: pay-per-user, pay-per-employee, and pay-per-appraisal. Get in touch with PerformYard today, so that we can provide you with quote. 

In the pay-per-user model, you will pay for each user registered in the software. In the pay-per-employee model, you will pay for each employee at the company, regardless of whether they are registered in the software. In the pay-per-appraisal model, you will pay for packs of employee appraisals. With the pay-per-user and pay-per employee models, you may have to pay set-up and implementation fees.

What companies use 360 degree feedback?

Experts say as many as 90% of Fortune 500 companies like Netflix, GE, and Facebook use some form of 360 degree feedback in their review process. Companies value the holistic look at employee performance, and understand that more information leads to better business decisions. 

How do I write a 360 review form?

360 review forms are constructed from a number of measurements like rating scales, open-ended questions, and trait selection to describe a subject. These measurements give reviewers the opportunity to reflect thoroughly on a subject: good, bad, and otherwise.

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3/17/2021
How Much Does Performance Management Software Cost?

What does it cost to invest in and implement performance management software? Learn about pricing options and implementation costs in our 2021 guide.

Performance management software costs between $4 and $12 per employee per month based on the number of employees. If you have under a few hundred employees expect to be on the higher end. Minimum annual contract sizes range from $4,000 to $15,000. 

It is important to consider the full cost of implementing a performance management system. Some vendors will add additional charges for set-up, training, customer support and add-on modules.

There is no free standalone performance appraisal software currently available.

PerformYard offers straightforward and transparent pricing of $4-8 per month. Every feature is included, and every customer gets a dedicated customer success manager for implementation, training and support.
Connect with our team to get an exact quote for your organization.

Performance Management System Pricing Model

Almost all performance management software is sold as a license to use the software for a given time. This way, your organization can start using performance management software at a relatively low price and still get the benefits of continuous updates and support from the vendor. The price is based on the number of employees using the software. This price is often referred to as the “per-employee-per-month” price or PEMP. In order to calculate the annual price you will pay for the software multiply Employees x PEPM Cost x 12.

The PEPM price will vary depending on the number of employees your organization will be purchasing seats for. Usually larger organizations will pay less per employee as the overall size of the contract is larger. Every vendor will be different in terms of what they charge and how the price varies based on seat count. 

Another thing to consider is whether the vendor has a minimum contract size. Minimum prices can vary greatly. Some software vendors will only work with organizations that have hundreds of employees and pay tens of thousands of dollars per year.

At PerformYard, we charge between $4 and $8 per employee per month. Organizations with more than a few hundred employees will be in the lower half of the range, and organizations with fewer will be in the upper half. To get an exact quote for your number of employees, connect with our team here.

PerformYard does not have any additional charges. We believe in giving customers everything they need to succeed, including every feature and unlimited support from our team. However, some vendors do have additional charges that you should be aware of.

Implementation and Training Costs

PerformYard’s one simple price always includes implementation, support and trainings.

Some vendors will charge an up-front fee to help your organization start using their software. This fee, sometimes referred to as a “setup fee” or “implementation fee,” can range from $2,000 to $10,000 depending on the vendor. 

What is included in the implementation fee is often a set of services that are defined in your agreement. If you go beyond the agreed upon services, you may be subject to even more fees. For example, you could get two employee trainings as part of the fee but be on the hook for even more charges if you need to do additional trainings.

For small and midsize organizations, implementation fees can be a red flag that signal the software is very difficult to set up and use.

Customer Support Fees

PerformYard’s support is always included and unlimited. For as long as you’re a customer you’ll work with a dedicated team member who knows your account.

Some vendors put limits on the type and amount of support they offer as part of the license agreement. For example, maybe you will be able to read support documents and submit “tickets” to unknown support staff, but you won’t be allowed to speak with anyone on the phone or collaborate in real time with someone who knows your account. Usually these vendors will offer higher-quality support, but it will come with an additional fee. Other vendors will only offer quality support to their largest customer, and leave small customers to figure things out on their own.

High-quality support with someone who understands your organization is very important for performance management software. Performance management initiatives impact every person in the organization, including executives and leadership. When you are about to launch a cycle across the organization, it’s important to have the confidence that everything is going to work perfectly and as expected.

Evaluating Return on Investment

The return on investing in performance management software is usually quite high. The cost of the software is less than 0.1% of an organization’s total human capital costs, and the benefits can be large and meaningful.

Reducing the administrative burden on employees 

HR teams can spend a lot of time administering review cycles by distributing and collecting review forms, chasing incomplete forms, signing off on reviews, recording appraisal data and compiling data for analysis, despite the fact that all these tasks should be easily automated.

Employees and managers also spend a lot of time on reviews, chasing down the appropriate forms, going back and forth with HR on exactly what is expected or searching for lost data. 

For a typical organization, saving just 1-2 hours per employee per year will pay for the price of the software. And this is just one of many benefits.

Reducing employee turnover

The average hard costs of employee turnover are 21% of the position’s salary. This number can balloon to 213% for highly specialized and senior positions.

With an effective performance management strategy, your organization can get in front of turnover by better recognizing your highest performing employees or even just having more frequent conversations with employees about their professional goals and aspirations.

For a typical organization, stopping just one or two employees from leaving per year will pay for the price of the software. That is only counting hard costs. The opportunity cost of losing a great employee is far far greater than the hard costs.

Improving organizational alignment

Organizations often struggle to align employees around organizational goals. Without frequent feedback and goal discussions, it can be easy for employees to head off in the wrong direction. 

If your performance management approach can correct just 0.1% of misaligned employee time, that will also pay for the price of the software. 

Improving workforce optimization

Human capital costs are often the largest single line item for an organization, and yet most organizations under-invest in their people. Making small investments in developing employees, driving engagement or aligning work can have huge returns.

Stanford professors O'Reilly and Pfeffer found that a change of one standard deviation in an index of human resource management practices produced increases of $20,000 to $40,000 in stock market value per employee.

PerformYard’s Simple Approach to Pricing

At PerformYard we like to keep things simple. Every feature is included in one low price, and every customer gets a dedicated customer success manager for implementation, training and support at no additional cost.

Visit our pricing page for all the details, and then connect with our team for an exact quote.


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3/10/2021
Free 90-Day Employee Performance Review Template

90-day employee reviews can play a critical role in your performance management strategy. Download a free Excel, Word or PDF employee evaluation template.

Click here to download:

PDF - PerformYard's 90-Day Review Template

Why 90-day reviews?

90-day reviews of new employees have several benefits including increased productivity, stronger employee-manager relationships, and the opportunity for quick feedback. Employee turnover in the first year is high and 90-day reviews ensure employees get the information they need to correct issues and double down on successes.

Additionally, 90 days is a realistic timeframe to measure a new employee’s performance and give them ample time to formulate their own questions. Successful 90-day reviews also complete the transition from new employee to valuable contributor.

Goals of a 90-day review

90-day reviews should make the onboarding processes for hires and managers easier and begin a formal review cycle that continues during the employee’s time at the company.

A 90-day review also lets employees ask questions and share feedback with the company about their experience so far. In return, the managers share their feedback, set clear expectations for the future, and build their relationship with the new hire

Managing the 90-day review process

There are several ways to manage the 90-day performance review process including email, online survey tools, and online performance management systems.

The easiest way to manage 90-day performance review with online performance management systems like PerformYard. These flexible systems have benefits like automating the process, recording the employee’s performance history in one place, and using comparison tools to review an employee’s 90-day performance with future performance check-ins.

More cumbersome is using email to manage 90-day reviews. HR directors can send review forms to managers and employees for them to fill out the review. Completed forms are then saved manually to an employee’s file.

Another option is to use an online survey tool like Survey Monkey or Google Sheets. Survey programs have the option to export results to a spreadsheet which are transferred manually to the employee’s file.

If you're interested in streamlining your performance management process (including 90-day reviews), click here to learn more about the PerformYard platform.

FAQs 

When should new employee performance reviews happen?

While some organizations check-in with employees after 30 or 60 days to evaluate the onboarding process, the first true performance review is commonly done at 90 days.

90 days is a good timeframe for employees to understand the organization and their responsibilities. Since performing at a new job is stressful, managers should not postpone these reviews unnecessarily.

What questions should I ask in a 90-day review?

Along with performance questions you would ask of any employee, there are specific questions to ask new hires. These include “How does your new role compare to the expectations you had coming in?” Download our template for more questions.

How should a 90-day review be structured?

90-day reviews should include a self review, manager review and a performance conversation. Employees should have the opportunity to ask their own questions and offer feedback for the manager and company.

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14 Types of Performance Appraisals for 2021

There is nothing more fundamental to the success of an organization than employee performance. Maybe that’s why there is a seemingly endless number of performance appraisal processes.

There is nothing more fundamental to the success of an organization than employee performance. Maybe that’s why there is a seemingly endless number of performance appraisal processes for evaluating, measuring, driving, and developing employee performance.

In this article we review 14 of the most common performance evaluation methods, everything from traditional methods of appraisals like competency assessments to more extreme appraisal techniques like human resource accounting.

For every approach we’ll also share when it is most effective and appropriate to use. Choosing the right performance appraisal approach isn’t about picking favorites, it’s about serving the unique needs of your employees and your organization.

When building out a complete performance management system organizations will often choose to combine a few of the following appraisals.

Check-ins

Performance check-ins are often confused with other types of performance reviews, but they’re not the same. Performance check-ins happen more often, they are more informal and they give managers the opportunity to build rapport and find out what employees are working on between cycles.

Check-ins can have set agendas or be completely open-ended. Most often employees and managers will discuss progress towards company goals, overall performance since the last check-in and the employee’s aspirations.

The primary role of check-ins is to create a consistent time and space for discussions of long-term performance. In the bustle of the day-to-day it can be hard for managers and employees to ever sit down and take a long-term view of performance.

When to use check-ins

Check-ins can be used effectively at most companies. They are most often deployed between more intensive appraisal processes to spread out performance discussions throughout the year without overburdening employees and the organization. Check-ins are also important if your employees are setting long term goals, for example career goals. More frequent check-ins help to ground long-term goals to shorter term actions.

Narrative Appraisals or Essay Appraisals

As its name suggests, the narrative performance appraisal is created when a manager writes a freeform essay about the employee’s performance over the review period. Essay appraisals allow reviewers to discuss anything they feel is pertinent to the employee without being locked in to certain questions. 

In a perfect world this approach allows managers to focus on exactly what an employee needs to hear and provide the most relevant feedback. However in the real world managers don’t alway express themselves clearly and essay appraisals can leave employees feeling confused on where they stand. 

The narrative appraisal is customized to each employee which makes it very hard, to impossible, to make comparisons across employees.

When to use essay/narrative appraisals

Essay appraisals are best for employees with loosely defined jobs or who are doing very individualized creative work. When it is hard to quantify the inputs of and outputs of employees’ work or you feel like every employee would need their own custom appraisal questions in order to get relevant feedback, then the narrative appraisal could be right for you.

Narrative appraisals are also a way for great managers to shine. If your managers are willing to write clear thoughtful feedback to each of their reports, it is worth formalizing that process.

Read more about narrative or essay appraisals here.

360 Feedback

360 feedback involves getting broad feedback from an employee’s coworkers. This can mean peer reviews, self-reviews, manager-reviews, secondary manager reviews, or upward reviews. The idea is to increase the sources of feedback in order to get a more accurate and holistic view of employee performance.  Often 360 feedback will be open-ended or thematic with the employee’s manager reviewing and aggregating the feedback into a single more cohesive picture of performance.

When to use 360 feedback

360 feedback is a great option for when employees regularly work collaboratively on different teams. When an employee’s primary role is working with others outside of the view of their manager 360 reviews can bring to light feedback that might not otherwise be raised. Peers are often hesitant to give negative feedback outside of a formal context, 360 reviews provide that context.

One key to successful 360 reviews is to train everyone in the organization on delivering effective feedback. Sometimes non-managers are less experienced giving feedback and what they share can be more destructive than constructive.

Learn more about the pros and cons of 360s here.

Figure out what people to include in your 360s with this article.

Competency Assessment

Competency assessments measure an employee’s capabilities against their critical job skills. These assessments show the gaps between where an employee needs to be and where they are now.

Competency assessments often flow naturally into a concrete learning plan focused on the competencies with gaps. This type of appraisal can be conducted in a variety of ways including through observation, interview, or form. The key is to choose the right competencies for every role at your organization.

When to use competency assessments

Competency assessments are great for jobs where success is dependent on well understood skills. It usually helps to have many employees in a similar role, so that you can begin to understand the competencies that matter through experience. 

Focusing on a specific set of competencies can lead you down the road of only recognizing employees who succeed in one specific type of way. Employees who drive great outcomes, but do so in unexpected ways may find it difficult to progress when they are evaluated on competencies rather than outcomes.

Read more about the pros and cons of competency assessments.

Learn about how managers can struggle to fairly rate skills.

Grading/Rating Appraisals

In a grading/rating performance appraisal, managers use a numerical (1-5) or descriptive scale to record an employee’s performance in specific areas of their job. Companies such as Amazon and Deloitte use forms of rating scales. Because they are easy to fill out and create quantitative data rating appraisals are very popular. 

But anything worth doing is hard, right? One of the keys to rating appraisals is making sure managers aren’t just mailing them in, doing the minimum and getting them done without having the difficult and important conversations that need to accompany these types of appraisals. Ratings send a very clear message of where an employee stands, but they do a very poor job of telling an employee where they need to go. 

When to use grading/rating appraisals

Rating scales work well at organizations that need to create more accountability. It’s impossible to spin a low rating. Just remember that if you want employees to up their game, you’ll need to do more than just tell them they are underperforming.

https://www.performyard.com/articles/the-right-way-to-use-ratings-in-performance-reviews

https://www.performyard.com/articles/performance-review-ratings-scales-examples

Stack Ranking Appraisals

Stack rankings and forced distributions are a controversial method of performance appraisals that rely on ranking employees against each other. Sometimes this is a top to bottom list and sometimes it’s into buckets of high-performing, low-performing and the middle with quotas for each. Rankings force managers to differentiate between employees to find out which ones actually have the highest performance. It also makes it very clear where employees stand in relation to their peers.

When to use ranking appraisals

Ranking appraisals can work great for competitive environments like up-or-out consulting firms. In these situations everyone knows they need to be a top performer to stay with the firm, so it’s healthier to make this process transparent and open.

Forced distributions can also be a useful approach in the short-term for organizations that have become stagnant and are being dragged down by low performers. Sometimes letting employees who have checked-out move on to a new job and brining in fresh talent is the best decision for everyone. 

Rankings are not great for companies that are focused on innovation or creativity. Moments of creativity can be uneven and unpredictable. Pushing employees out after one underperforming year probably doesn’t make sense in that context. Ratings also aren’t great for organizations that need to be extremely collaborative, as it creates a tension and competitiveness between employees.

Read about when stack rankings make sense and when they don’t.

Project-based Reviews

Project-based reviews are unique in that they focus on the most recent work an employee has completed. Project-based reviews have questions that are directly related to an employee’s contribution to a project. Feedback cycles can also be quicker for this appraisal type as projects often cycle more frequently than traditional review cycles.

When to use project-based reviews

Project-based reviews are best for companies that work on distinct projects one at a time (or almost one at a time). It’s best when these projects last from a few weeks to a few months. Typical examples are accounting audit teams, consulting teams, and some types of law firms. Project-based reviews are especially useful when organizations are bringing together new groups of employees for each project.

Learn about the benefits of project-based reviews.

External/Client Appraisals

External and client appraisals involve bringing in third parties from outside the company to help with performance reviews. For employees that primarily engage with customers or clients this can be the most important source of feedback. Gig-economy companies like Uber rely exclusively on client appraisals to manage their contract workforce.

When to use external/client appraisals

Client appraisals are great for service roles where an employees primary job is to interact with customers. External appraisals are also a good option for employees that work as closely with a client as they do with their coworker, like a consultant on site with a client for an extended period.

Checklist Appraisals

In checklist appraisals, managers are asked to answer “yes” or “no” to a series of questions or statements about an employee. These appraisals tend to be easy to complete and can help an employee know where they stand across a broad set of domains. Google famously uses this approach to review their managers. Employees answer yes or no for a long list of actions Google believes good managers should be taking with their reports. Read more about Google’s upward reviews in our article here.

When to use checklist appraisals

Checklist appraisals are binary and therefore best for traits where levels of gray don’t matter. Checklist are also great when you want to provide a lot of feedback in a lot of areas, and you need to keep the the appraisal easy to complete. Upward feedback is a good example of this.

Management by Objectives (MBO)

Management by objectives measures employee performance by how they achieve specific objectives. These objectives are decided on with equal input from both employees and managers. The objectives should align with organizational goals, and there should be effective communication on both the employee’s and manager’s part to ensure the objectives are met.

When to use MBO

MBO can be applicable to many organizations. The most difficult part is the communication needed between employees and managers. If your staff is already communicating well, it should not add much of a workload or cost. Some criticize MBO for being too focused on goals at any cost and missing more human elements of work, but effective communication through the process will make sure that employees’ more personal needs are met alongside the organizational goals.

Read more about management by objectives and how to set up your own MBO process.

Behaviorally Anchored Rating Scales (BARS)

Behaviorally Anchored Rating Scales, also known as BARS, is a type of performance management scale that uses behavior “statements” as a reference point for rankings. BARS measures employee performance against specific examples of behavior that are given a number ranking. 

For example, a pizza place could use a Level 1 ranking to describe an employee who “is often late, receives regular customer complaints, and takes >10 minutes to make a pizza” while a Level 5 ranking would describe an employee who “is never late, receives multiple stellar customer reviews, and makes a pizza in under 5 minutes.”

BARS is helpful because it combines qualitative and quantitative assessments. The behavioral definitions can also aid in eliminating ranking bias.

When to use BARS

Because of the time-consuming nature of coming up with behavioral statements for every position, BARS is best for larger companies with the resources to create an excellent scale. It’s also best if a company has groups of employees with very similar jobs that can use the same rating scale.

Learn more about BARS and the pros and cons.

Critical Incident Appraisals

For critical incident appraisals, managers keep a log of specific examples of both negative and positive behavior exhibited by employees. The standard for behavior can be based on company values or an employee’s job description. A continuous log makes sure that performance reviews focus equally on performance across the year and focus on concrete moments rather and general sentiments. It’s important that the descriptions of these incidents are made as they occur.

When to use critical incident appraisals

Critical incident appraisals are simply descriptions of events and that can make it hard to compare employees or make decisions based on them. They can also be overwhelming and hard to interpret as a whole if they aren’t paired with some analysis.

Human Resource Accounting / Cost Accounting

Also called cost accounting, human resource accounting analyzes an employee’s performance through the monetary gains they bring to the organization vs their costs. Assuming you could have perfect measurement this could be the ideal appraisal approach. Unfortunately it can be very hard to perfectly understand all the costs and benefits an employee has on an organization.

When to use Human Resource Accounting

Human resource accounting is most useful when employee contributions and costs are measurable. This can happen in situations where executives are judged on their P&L or for positions like sales where the ultimate measure of success is revenue generated.

Psychological Appraisals

Psychological appraisals are unique in that they look forward to an employee’s future performance rather than focusing on their past. In this appraisal, psychologists look at the employee’s internal traits and qualities that could affect their performance in the future. The psychologists can look at specific scenarios when performing their tests to discover how an employee is likely to perform in similar scenarios in the future.

When to use psychological appraisals

While useful, psychological appraisals can be time-consuming and costly, especially for small organizations. They can be used in specific scenarios such as determining which employees should be pushed toward leadership roles or managing reorganizations of the org chart.

Frequently Asked Questions

What is the best form of performance appraisal?

The best performance appraisal is the one that serves your organization’s needs. If you’re just getting started, consider a narrative appraisal with a few simple ratings questions that focus on overall performance.

What type of performance review provides the best feedback?

Checklist appraisals can provide a broad array of feedback quickly, however for the best overall feedback it is hard to beat a well-written narrative review. Unfortunately not all managers will take the time to write comprehensive and thoughtful narrative reviews.

What is the best way to evaluate employee performance?

If you’re looking to generate useful quantitative data on employee performance, consider using ratings appraisals that ask simple questions managers likely already have conviction around. Good questions include, “Is this employee ready for promotion?” and “How hard would you fight to keep this employee at our organization?”

What should I include in a performance evaluation?

One thing to include in every performance evaluation is space for context and ways for the employee to improve their performance going forward. It’s important that employees have enough information to understand their feedback and know what to do with it.

What is the most common performance appraisal method?

Formal check-ins, narrative appraisals and competency assessments are the three most common appraisal methods used today.


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2/26/2021
Why is Modern Performance Management Digital First

Organizations that employ modern performance management approaches often rely on modern online software. Why is that? In this article, we’ll explore the reasons dedicated software is important to the

Organizations that employ modern performance management approaches often rely on modern online software. Why is that? 

In this article, we’ll explore the reasons dedicated software is important to the success of your performance management strategy.

What Makes Modern Performance Management Different?

Modern performance management has evolved in three ways: 

  • An increase in frequency of feedback
  • More flexibility/adaptability throughout the year
  • An increased focus on fairness and removing bias

These changes have been positive, but they’ve also created new challenges for HR. How do you administer up to 20 times more points of feedback? How do you push updates to your process in real-time and keep everyone on the same page? How do you aggregate and analyze performance data to root out bias?

The Challenge of Increasing Feedback

One of the biggest shifts in modern performance management has been the increase in feedback. Whether it’s quarterly check-ins, project-based reviews, formal 1-on-1s, or continuous feedback, most modern strategies involve an increase in the points of feedback an employee receives. According to MIT Sloan, 68% of 1,800 global leaders agreed that ongoing feedback conversations have a positive impact on individual performance.

GE’s struggle to save feedback

GE recently made the switch to annual “summary conversations.” However for these conversations to be effective, managers and employees needed to be having feedback conversations throughout the year and saving them to review at the end of the year.

Encouraging the feedback was one challenge, but GE realized they had a whole other challenge as well. With feedback happening in so many different ways around the organization, the data was never making it to one centralized place. That’s why they turned to software. Their new feedback app allows managers to store moments of feedback wherever they happen.

Thank you notes, customer emails, thoughts about a presentation — all of it ended up in one place. This created a rich dataset for managers to pull from at the end of the year.

Why software is key to handling more frequent feedback

While having a more frequent feedback cycle may sound like a great fit for your organization, creating a more complex system without help can be daunting.

A software system can streamline away all the challenges of administering more feedback. Everything from distributing the right forms to the right people, to managing due dates and reminders, to collecting and storing performance data in useful ways can be done through software now.

Importantly, software also makes things easier for managers and employees. If the process of giving/receiving feedback is easier, you’re much more likely to get buy-in to your new performance management approach.

The Need for Greater Flexibility

One of the greatest failings of traditional performance reviews is that they were forgotten and neglected at many organizations. The questions asked often became stale or even irrelevant.

Modern performance management strategies aim to drive real outcomes for the organization, and to do that they need to keep up with the pace of change. As an organization or its goals shift the performance management strategy must adapt to stay relevant and valuable.

We’re working from home now

In 2020 when the global pandemic forced many organizations to transition to remote work, it upended performance management strategies.

There was a shift in which skills or competencies are more important. Many of the moments of feedback that organizations had just counted on happening because everyone was rubbing shoulders now needed to be formalized and scheduled.

How many organizations continued to ask employees questions that were irrelevant in a WFH world?

Why choose flexible software

Your performance management strategy has to keep up with the changes happening at the rest of your organization. 

What you’re asking of your managers and employees should always feels relevant and valuable to them, both today and in five years. A flexible digital platform allows HR to regularly update the process and seamlessly push those updates out to the entire organization. 

While the process can change, a digital platform stays the same. Employees don’t need to learn a new set of steps each time there is an update. The platform will alert them as always to the next thing they need to know.

These automatic updates make it much easier to experiment with things like different review cycles, goal-setting cadences, or feedback strategies.

Standardizing to Create Fairness

Because of the influx of data in the workplace, modern performance management has also become more fair and transparent. Employees already know that better work is rewarded, but using data to provide transparency behind reward and recognition decisions has led to more employee satisfaction and buy-in.

In looking at the future of performance management, MIT Sloan says that the reliance on subjective manager opinion is being replaced by a reliance on data. The credibility of modern performance management systems relies heavily on transparency with this data. And the easiest way to collect and categorize all this data that’s coming in much more frequently? A digital system.

General Motors’ struggle with “unfair” recognition

General Motors noticed their employees had become frustrated with what they perceived as unfair employee recognition programs. There were dozens of different programs throughout the company with recognition being given sometimes publicly and sometimes behind closed doors. 

GM revamped their system to create a uniform set of guidelines and a “social media” for feedback to be shared with anyone at any time. The key to the program’s success, according to MIT Sloan, was its transparency and consistent philosophy.

Software loves standardization and data

A fair performance management system will help alleviate employee frustration and encourage buy-in to your program from all levels. The key to achieving this is an open and transparent system with data that can be reviewed.

When the process is opaque or conducted at the whim of individuals it breeds distrust. Openness and visibility also encourages good behavior from everyone involved.

The key to accomplishing this is a single platform that is pushed across the organization with controls to ensure both compliance with the system and reviews of the data generated.

Digital-First Performance Management

Software enables performance management strategies that are more complex, adaptable and open. This kind of flexible system is key  to succeeding with modern performance management approaches, and it’s why we see most leading organizations adopting a digital platform to manage their process.


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2/23/2021
16 Key Features of Performance Management Software in 2021

Purchasing performance management software is a big commitment for your organization. We think the best options include features in three categories flexibility, ease to use, and great support.

Purchasing performance management software is a big commitment for your organization. We think the best options include features in three categories flexibility, ease to use, and great support. Companies that excel in all three will be a great fit for your managers and employees.

Flexibility

Good performance management software accommodates a wide range of performance management strategies like annual reviews, quarterly goals, or continuous feedback and the best software adapts when your company’s needs change.

  1. Performance Tools - All performance management systems should blend goals, feedback, and check-ins in their process. Goals set direction, feedback ties goals to the day-to-day, and check-ins provide space for long-term performance discussions.
  2. Review Cycles and Timing - There should be exhaustive options for review cycle design and timing. You should be able to decide who reviews whom when and in what sequence. 
  3. Form Question Types - The software needs to accommodate questions you want to ask your employees, not just commonly asked questions.
  4. Goal Options - Effective software allows you to choose the type of goals you want to set like KPI’s, S.M.A.R.T. goals, long term, or any others.
  5. Feedback Flexibility - Good software makes it easy to provide downward, upward, peer, or external feedback and edit visibility settings so reviewers choose who sees their feedback and when.
  6. Self-Serve Administration - HR should be able to track the progress of reviews and goals at a glance and customize the software on their own.

Ease of Use

Valuable performance management software is easy for everyone to use, including employees and managers. The key to high participation rates is enabling employees to focus on feedback, not bells and whistles.

  1. Clean Design - The best systems will have clean dashboards that give employees everything they need to see the moment they log in.
  2. Robust Notification System - Great performance management software has a flexible notification/reminder system so employees don’t have to keep the software open.
  3. Single Sign On - The software you choose should integrate with an existing system like your HRIS, your SSO provider, or be compatible with your own SSO solution.
  4. Simple Flow - Managers should be able to launch check-ins from their inbox and forward them to the right people with a single click.
  5. Smart Automation - The right system automates mundane tasks like distributing forms, collecting sign offs, tracking cycle progress, collating data, etc. 

Dedicated Success Manager

The best performance management companies assign a dedicated success manager to your organization. Everyone from the CEO to the newest hire is involved in the performance management, so the stakes are too high to rely on help pages or support tickets that go unanswered. The best support teams will:

  1. Create Custom Implementations - Great performance management strategies are designed for their organization. You want someone who will listen first, then support your efforts.
  2. Train Your Employees - Live employee training by experts ensure every employee at the organization has what they need to be successful.
  3. Develop a Long-term Relationship - A good success manager will partner with you as long as you use the software so you don’t have to re-explain your situation every time you have a question.
  4. Reach out Proactively -  Strong support teams go above and beyond answering questions by regularly contacting you to support your ongoing process.
  5. Be Knowledgeable on Software and Performance Management - A knowledgeable support team will understand the software, performance management processes, and can advise you on best practices.

When your performance management vendor is outsourced or offshoring the support teams it can be a sign that the organization is interested in cutting costs more than ensuring your success.

Your Next Step

Connect with performance management vendors to discuss your performance management approach and process. It is important to understand what it will be like for HR to manage everything in the software and what it will be like for employees to participate.

To learn more about PerformYard and schedule a product demonstration visit PerformYard.com. In our first 30 minute call we’ll take 5 minutes to learn about your process and then spend the rest of the time showing you what it would be like to manage your process in PerformYard.


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2/19/2021
7 Benefits of Modern Performance Management

Organizations that update their performance management process have a lot to gain. In this article we cover 7 great reasons to modernize your own process.

Ready to make the switch to a more modern performance management approach? 

Organizations that update their process have a lot to gain. In this article we cover 7 great reasons to modernize your own performance management process.

1. More Frequent Feedback

Modern performance management strategies increase the frequency of the feedback employees receive. Whether it’s quarterly check-ins, project-based reviews, continuous feedback or frequent goal setting; when managers and employees are meeting more often good things happen.

Frequent feedback means that employee performance becomes a year-round conversation rather than just for the month before and after an annual review. It also keeps feedback relevant to the moment. It probably doesn’t make sense for employees to be guided for 12 months by one conversation?

Most organizations are faster and more agile than they ever have before. It’s important that performance management keeps up. 

2. Diverse Sources of Feedback

Modern approaches don’t just increase the frequency of feedback, they also increase the sources of feedback.

Downward, self, upward, peer and external feedback all help to clarify the picture of employee performance. Employees are more to your organization than a relationship with one other person.

Also, relying too heavily on a single point of feedback can make it hard to identify biased data.

3. Feedback Becomes Action

Modern performance management is about results, not just completed forms in a filing cabinet. 

That’s why approaches like Deloitte’s project-based reviews or Adobe’s quarterly check-ins do more than just promote long-term discussions of performance. They also encourage goals for setting intentions and continuous feedback for translating intentions into actions.

When you update your performance management approach, the discussion between a manager and an employee about performance becomes just the first step. Ultimately the goal is to be driving meaningful outcomes for your organization.

4. Outcomes Relevant to the Organization

When HR builds a modern performance management strategy, they cater it to the needs of their own organization. Some focus on accountability, others on employee development or organizational alignment.

It’s no longer something you pull off the shelf for vague reasons like compliance. This means that the outcomes are relevant to the goals of the organization. If a fast-moving organization with a flat hierarchy implements an organizational alignment strategy they’re doing so because it solves a meaningful problem.

5.  A Process Relevant to Employees

A classic complaint employees have about annual reviews is that “half the questions don’t even apply to me!”

When managers and employees realize the new performance management approach has been built for them they’re far more likely to embrace it. Modern approaches also emphasize streamlined systems so that employees spend more time discussing feedback and less time administering clunky systems.

6. Better Performance Data

Modern strategies also focus on better questions that generate better data. The idea is to ask people questions they know the answers to. 

Questions like “Is this employee ready for a promotion?” or “Would you want to work with this employee again?”

Modern approaches also rely more on qualitative data in addition to quantitative data in order to capture the nuances inherent to human performance.

7. More Transparency and Fairness

Centralizing and standardizing performance management helps keep conversations about employee performance open and fair. 

If your organizations is driving how performance is evaluated or recognized your less likely to have situations arise where managers are running their own systems that are incompatible with the your values.

Ready to Make the Switch?

If you’re looking to switch to modern performance management, the next step is to choose the approach that’s right for your organization.
Check out our guide here.

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12/23/2020
What is Upward Feedback? Lessons from Google Manager Surveys

What is upward feedback?

In short, upward feedback is a performance appraisal method that allows direct reports to provide feedback to their manager. This approach is on an upward trend and increasingly adopted by some of the world's leading brands. How do we know? Because Google's doing it.

Google releases a 15-question/statement, mostly quantitative survey asking employees to rate their bosses. They base their questions on the eight factors they’ve seen consistently in their mostly highly effective managers — things like being a good coach, taking a personal interest, and being a good communicator and listener.

That might sound fitting for a company whose slogan is "Don't be evil", but does it make sense for everyone?

Here's what works about Google's employee survey

Google's upward feedback survey tackles a big business problem: Bad managers.

Bad managers have become such an office staple that they’re basically the face of corporate malaise in pop culture. (Well them, and the office printer.)

The only thing worse than working under a bad manager, is working under a bad manager who has absolutely no clue how bad they are, let alone how to get better. It just makes sense that business all-stars like Google would want to keep a finger on the pulse of what's happening on a managerial level. But there are some important things to consider before launching your own upward feedback initiative.

Use specific feedback ratings for better manager performance insights

Google’s survey is a good example of how to ask about a manager’s soft skills as well as their specific, company-aligned strengths. Google gives 13 quantitative, strongly disagree to strongly agree statements that cover their eight goals.

For example, statements like, “My manager gives me actionable feedback on a regular basis” can effectively indicate how communicative a manager might be. Statements like “My manager assigns stretch opportunities to help me develop in my career” get at the more Google-specific desire to have managers present fun challenges and growth (stretch) opportunities for employees.

Use open-ended questions to get broader insights from upward surveys

Then, Google uses two open-ended questions:

1. “What would you recommend your manager keep doing?”

2. "What would you have your manager change?"

These open-ended questions give the employee a chance for qualitative responses. It's interesting to note that Google’s questions are open, but also also slightly specific, similar to the types of feedback questions recommended by the Harvard Business Review.

In short, Google does a lot of things right with their upward feedback survey, but Google’s model isn’t the only one.

For some offices, it might not be comprehensive enough, or it might be too specific to Google’s values. The Society for Human Resource Management offers an example survey of their own that fits a bit more generally. They ask more questions and break their questions down into groupings that get at different managerial qualities, such as “valuing diversity.” These questions might be easier to align to your own business culture.

Sometimes it doesn't make sense to quantitatively measure your managers

An employee survey like Google's could be a great way to get a real read on your managers. That said, surveys and quantitative data have problems of their own.

First, managers have an obvious power over employees and employees quite reasonably, fear that. In fact, Amy Gallo, editor at Harvard Business Review, recommends employees not give feedback to managers who can’t handle it. As much as we may want the feedback, it's unfair to ask an employee to risk their job in order to give it to us. While many workplaces surveys are anonymous, the “Ask a Manager” advice column over at Inc.com notes that the anonymity often feels, or is, see-through and doesn’t actually protect employees.

Second, not all data is good data — and having no data might be better than collecting bad data. Sir Andrew Likierman, Dean of the London Business School, wrote that it’s easy to fall into traps of over-trusting numbers, number-based systems, and metrics. Andrew points to the tendency for businesses to overvalue data that doesn’t actually say much, using popular but inapplicable scores and systems, and applying quantitative values to things that don’t have them.

Sometimes the best approach could be qualitative instead of quantitative. That could mean a brief qualitative survey, stopping in to sit with your teams for a while, or sitting down with employees for a private face-to-face meeting. There are many ways to train and develop strong managers. Just because the data isn’t there, doesn’t necessarily mean that it has to be.

 

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5/20/2020
3 Types of Employee Review Questions

You’ve been tasked with creating a series of questions for the upcoming performance checkins. If this is the case, you might be asking yourself where on earth to start. Gathering some information about the review and the goal of those questions can help you narrow down your options. Before you begin, determine what type of questions you will ask by answering this one first:

What’s the purpose? Are you seeking information, making plans, or trying to change behavior?

Acquiring Information and Insight

Whether you realize it or not, the questions we ask serve a purpose. Most likely, if you are conducting a review, you are looking to gather information or gain your employee’s perspective on performance. But the right questions can also mitigate business risks by discovering unforeseen drawbacks.

To understand your employee's point of view, and learn what impacted them to perform above or below expectations, ask questions that put them in the driver’s seat. Take note of these examples:

  1. Did you encounter a major challenge in your profession this year? If so, how did you overcome it?
  2. What do you consider to be your biggest accomplishment with the greatest results this year?
  3. Do your own personal goals align with the company’s goals? If not, please explain why.
  4. If you could change anything about your job or upper-management’s job, what would you change and how?
  5. Is there something you would change in the workplace environment?
  6. Is there somewhere in the company that can be more efficient or productive?
  7. Name the obstacles that make it difficult for you to reach your work goals.

These questions reveal the problem-solving abilities of the employee being reviewed. They also give the manager an idea of what their employee considers a priority, which can then be compared or contrasted to management’s ideas.

It is more likely that the person working a job can provide you with the extra, in-depth ideas about the positives or negatives of their function and support. Again, giving them the driver’s seat is a great way to initiate conversations with your employees that they would otherwise not have. Here is where you’ll want to learn the most about shortcomings and areas of improvement.

Planning for the Future

After sharing their successes, how they were achieved, and what challenges they recently overcame, ask questions that point to the future. After all, a healthy performance management program will embrace professional growth and career paths. The following set of questions can help your and your employee structure important future plans:

  1. In what area would you like to receive more training or mentorship?
  2. What skills or cross-training opportunities, if any, interest you the most and why?
  3. Would you like to take on more challenging work and if so, why do you believe you are prepared for it?
  4. What might be your biggest challenge next year and how will you prepare for it?
  5. What other role in this company can you see yourself in, sometime in the near future?
  6. What other role in this company can you see yourself in, in the distant future?
  7. What part of performance review is most important to you: recognition, professional growth, or responsibility?

These questions reveal an employee’s awareness about their surroundings and how well they are being supported. Having proper encouragement will drive your employees to create personal goals and think about the future.

By all means, planning is essential to managing performance in your company and reviews need to produce a clear sense of direction for both management and staff. Get to know how your employees will make the most of next year and what they truly value the most.

Change an Employee’s Behavior

Lastly, when used as a tool for unlocking value in your department, the right review questions can be quite effective motivators. Using questions to incite learning and exchange ideas, is a sure fire way to fuel performance because employees generally wish to succeed. These questions create a unique opportunity to forge potential and build rapport among your team:

  1. Are there any company resources beneficial to you? If not, are there some you feel are needed?
  2. Did you have enough constructive criticism and feedback throughout this quarter?
  3. What results were you least proud of and why?
  4. What can I do to help you better meet your goals?
  5. What disagreement have you had with an employee or coworker and how did you manage?
  6. Are you able to effectively communicate with me or your peers?
  7. What will you focus on the most next quarter to help you develop skills or company values?

For some, difficult questions are hard to ask, but rest assured, this experience improves interpersonal bonding. Employees perform best, when they know that their managers care. Ultimately, these questions that cause behavioral reactions get to the bottom line: is this the right person for the job?

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What is Modern Performance Management

There has been a shift in how organizations think about performance management. You can see it in headlines like these…

Death to the Performance Review

Reinventing Performance Management at Deloitte

Amazon to Drop Dreaded Stack-Ranking Performance Reviews

That said, progress has not been linear and you may also have seen headlines like these…

Lets Not Kill Performance Evaluations Yet

Why Facebook Still Uses Traditional Performance Reviews

Companies That Got Rid Of Performance Ratings Aren’t Doing So Well

So where does that leave us? What is Modern Performance Management?

It’s An Approach Not A Process

In the early stages it looked as if modern performance management would coalesce around a set of best practices, like quarterly conversations, weekly 1-on-1s, or continuous feedback frameworks. But this didn’t happen.

Organizations went in many different directions and most of the bold claims about the end of rankings, ratings, annual reviews and other elements of “traditional” performance management haven’t come to fruition.

Today, years into the performance management revolution we find ourselves in a middle ground. Organizations continue to improve their processes, but they are doing so with a mix of new and old practices.

It turns out there is no performance management panacea. What defines performance management as “modern” is not your process, but your approach.

1. Modern performance management is about starting with your organization’s needs and the needs of your workforce, then building a custom strategy that serves those needs.

That means no more over-stuffed annual reviews that are a big waste of time, but it also means you shouldn’t necessarily take Adobe’s strategy off the shelf and apply it to your organization.

2. Modern performance management is about creating a strategic business operation rather than fulfilling a year-end compliance requirement.

If you are analyzing the needs of your organization and then building up a strategy that drives results for your organization, that’s modern performance management.

Ok, that is a little abstract, so we’ve also compiled a list of themes that help define modern performance management.

Characteristics Of Modern Performance Management

Here are some of the changes we often see when organizations transition to modern performance management. These aren’t all requirements, even pursuing one or two of these changes is sufficient.

Digital First

Digital tools are enabling the transformation. More feedback, more data, more transparency are only possible because they can be achieved with a light tough through technology. Before adding complexity to their processes, organizations are streamlining them through technology. Ultimately performance management needs to be layered on top of the real work of the organization, so it can’t be cumbersome or time consuming.

Development Focused

Traditional strategies focused primarily on rewarding top performers and eliminating under-performers. While that is still a part of modern systems, the focus has shifted to include development. We wrote about this idea here - Accountability vs Growth: Choose a side (or don't).

More Frequent

You can’t talk about modern performance management without talking about increased frequency of feedback. Whether it’s quarterly check-ins, weekly one-on-ones, or continuous feedback, more feedback is what it’s all about.

Rewards Collaboration:

Traditional performance management tended to give everyone individual ratings which did not always incentivize teamwork. Today organizations want to know not only how well you work alone, but how you build up a team.

More Agile

We live in a more dynamic world and organizations want to reward employees who have the flexibility to adapt and perform as an organization evolves. Modern strategies reward both tactical performance and adaptive performance. Read more about that here - Tactical Performance vs. Adaptive Performance: Why You Need Both.

More Fair

Unfortunately traditional performance management is filled with bias. Modern performance management seeks to even the playing field and get to a better understanding of actual performance. It’s no longer just about your manager’s opinion of you for one week a year. Read - The Biases You Must Remove from Your Performance Reviews.

Smarter Data

Finally, modern performance management still embraces data. Even after an initial rejection of ratings and rankings, many organizations are looking for smarter ways to bring data back into their process in order to inform career planning, hiring, and other business decisions. Data gets smarter with better questions, like how Deloitte reframed their review questions to focus on things a manager is a better judge off.

Creating Your Own Process

If you’re ready to embrace a modern performance management strategy, don’t be intimidated by all your options. The right strategy is simply what’s right for your organization right now.

For many organizations the best first step is to streamline their existing process. A well run process that doesn’t waste employee’s time will go a long way as you continue to build out the rest of your strategy. If you’re interested in learning more about how PerformYard software streamlines modern performance management get a demo here.

If you want to learn more about creating your own modern performance management strategy, read our guide

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4/16/2020
A Short Guide to Giving Feedback

Here’s a surprising fact: 92% of respondents to a Zegner/Folkman survey agreed with the statement “Negative feedback, if delivered appropriately, is effective at improving performance.”

Even more surprising was that 57% of the respondents said they prefer negative feedback over positive feedback.

We all want feedback, we just don’t always like how it is delivered. Here are some quick tips to give higher quality feedback that employees will appreciate.

Positive Feedback

Don’t Wait: Positive feedback has the greatest effect when it’s immediate. There usually isn’t much prep or investigation needed before delivering positive feedback, so just go for it, don’t wait.

Be Meaningful: Reserve recognition and positive feedback for great performance. If you start celebrating mediocrity it will cheapen all the other recognition you’ve given in the past. That doesn’t have to mean less positive feedback, you can find things to celebrate big and small.

Give Details: Positive feedback should be more than just a celebration. Focus on what went right and why. That way we can feel good AND learn from our successes.

Do it Publicly: Public recognition can amplify the impact of positive feedback.

Delivering Negative Feedback

Be a Coach: It’s easy to point out what’s wrong, it’s much harder to show someone the path to what’s right. Engage around solutions and employees will be much more interested in hearing from you.

Focus on the Work: No one wants to be judged on their character, and frankly we shouldn’t be doing that at work anyways. Frame your feedback around the work and what’s going wrong, not around perceived character flaws. For example: don’t say “you’re unorganized,” say “you’re forgetting to call people back, and that’s a problem.”

Provide Examples: Negative feedback can become contentious, so be prepared with specific examples. Concrete examples will help make your feedback real for the employee. When we hear something negative our natural reaction is to recoil, bringing specific examples will help mitigate that.

Follow up: Negative feedback isn’t about calling people out, it’s about helping them develop. So plan to follow up on all negative feedback and discuss progress.

When Not to Give Feedback

When Failure Says It All: Sometimes failure is all the feedback people need. There’s no need to pile on when someone is already devastated by a failure. Pick them up and move on.

When You’ve Lost Patience: When you can’t control your emotions, you’re not giving feedback, you’re having an outburst.

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Creating a Modern Performance Management System

Modern performance management is overwhelming. There are more options than ever before and the hardest part can be knowing where to start.

Introduction

Modern performance management is overwhelming. There are more options than ever before and the hardest part can be knowing where to start.

Should you do OKRs like Google? Or maybe quarterly check-ins like Adobe? Or does Deloitte have it right with project-based reviews?

At PerformYard we’ve helped hundreds of organizations create custom performance strategies that are just right for their needs. In this guide we combine our approach to designing a new process with all our favorite resources from around the internet.


Here’s what you’ll learn:

 

What is Modern Performance Management

Performance management has changed, and you’ve probably seen the headlines...

But maybe you’ve also seen headlines like these…

So what’s going on? Is there a new “right” way to do performance management? And what is it?

Modern performance management is more about your perspective, your focus and how you execute your process than it is about specific tactics. There are high profile tactics out there like continuous feedback, weekly 1-on-1s, OKRs, and quarterly check-ins that have become synonymous with modern performance management, but you shouldn’t just take these things off the shelf and apply them to your organization. You’re not Adobe or Google.

Modern performance management is about starting with your organization’s needs and the needs of your modern workforce, then building a custom strategy that serves those needs.

It’s about creating a strategic business operation rather than fulfilling a year-end compliance requirement.

That’s a little abstract, so here are some more concrete ways that performance management has changed. (We also included a long list of examples from real organizations at the bottom of the page.)

Digital First: Digital tools are enabling this transformation. More feedback, more data, more transparency are only possible because they can be achieved with a light tough through technology. Before adding complexity to their processes, organizations are streamlining them through technology.

Development Focused: Traditional strategies focused primarily on rewarding top performers and eliminating underperformers. While that is still a part of modern systems, the focus has shifted to include development with accountability. We wrote about that very topic here - Accountability vs Growth: Choose a side (or don't).

More Frequent: You can’t talk about modern performance management without talking about increased frequency of feedback. Whether it’s quarterly check-ins, weekly one-on-ones, or continuous feedback, more and more frequent feedback is what it’s all about.

Rewards Collaboration: Traditional performance management tended to give everyone individual ratings which did not always incentivize teamwork. Today organizations want to know not only how well you work alone, but how you build up a team.

More Agile: We live in a more dynamic world and organizations want to reward employees with the flexibility to adapt and perform as an organization evolves. Modern strategies reward both tactical performance and adaptive performance. Read more about that here - Tactical Performance vs. Adaptive Performance: Why You Need Both.

More Fair: Unfortunately traditional performance management is filled with bias. Modern performance management seeks to even the playing field and get to a better understanding of actual performance. It’s no longer just about your manager’s opinion of you for one week a year. Read - The Biases You Must Remove from Your Performance Reviews.

Smarter Data: Finally, modern performance management still embraces data. Even after an initial rejection of ratings and rankings, many organizations are looking for smarter ways to bring data back into their process in order to inform career planning, hiring, and other business decisions.

Here are some of our favorite articles on Modern Performance Management:

The History and Science of Performance Management

How Much is Bad Performance Management Costing You?

What is Modern Performance Management?

4 Common Reasons Performance Management is "Broken"

 

Choose a Purpose for Performance Management

Modern performance management has a business purpose. So if you are designing a new strategy you need to start with its purpose.

The challenge is that not every organization will have the same purpose and you really should choose just one or two to start. So how do you choose?

Diagnosing your organization’s needs:

Choose a purpose for your modern performance management strategy by understanding the needs of your organization and your workforce.

For helping to decode the type of organization you have and it’s performance needs we love the “Organizational DNA” framework from PWC-

Learn about the 7 types of organizations and where you usually find them by industry and company size.

Then…

Take the short survey to get a sense of what type of organization you are.

Choosing a purpose:

Once you understand what your organization needs, choose the primary purpose of your new system. Every organization may be a little different, but here are the 5 most common types of strategies we see.

Accountability

This is the most traditional approach, but it still makes sense in the context of modern performance management. Systems that focus on accountability evaluate employees against standards. The most common examples would be a sales quota or a competency based system.

These systems can work very well when employees know what is expected of them and are highly motivated to achieve the standard. This tends to be organizations with well-defined roles, many people in those roles and measurable results. It also helps to have a large pool of qualified candidates to fill vacancies.

Development

Development focused performance management is having it’s day! Popular tactics like weekly 1-on-1s, continuous feedback and engagement surveys fall squarely in a development focused performance management strategy.

A development focus works well for knowledge workers, team based work, or employees with a lot of self-direction. If your employees see their job as “just a paycheck” you’ll either need to change their mindset before using a development focus.

Recognition

One of the most common complaints about informal continuous feedback strategies is that employees don’t know where they stand. That’s why many companies embrace recognition. Your most driven employees likely embrace some level of competition and have aggressive personal goals.

Recognition is best for organizations with highly motivated employees with opportunities to promote from within and room for some variable compensation.

Alignment

Alignment embraces the idea that you don’t need to manage people’s performance, you need to get out of their way. If you can clearly articulate what needs to get done, your employees will get after it and make it happen.

This approach is best for flat organizations with highly distributed decision making and information flows. Hierarchical organizations are just naturally better at alignment and don’t need as much help. Flat organizations need a way to get everyone moving in the same direction.

Values

This focus brings the organization’s values off the wall, and into conversations between employees. The goal is to increase self-awareness within the context of the values, with the hope that when employees embrace the values the results will trickle down to every element of performance.

Best for organizations that see toxic cultures as the cause of many of their performance issues. Sometimes public sector organizations can find themselves in this category.

For further reading on the purpose of performance management check these articles:

The Purpose of Performance Management: 5 Options

Does Your Performance Management Process have Purpose? These 9 Companies Do.

 

Elements of a Performance Management Strategy

Once you have a vision for your modern performance management strategy it is time to turn it into a process.

This can be daunting but we find it’s easier if you break things down to the building blocks. There are many specific tactics you can consider (like these 5 Modern Alternatives to Annual Performance Reviews) but in the end all of them are just variations or combinations of three things… Reviews, Goals, and Feedback.

Reviews (or check-ins or a structured, longer-term and scheduled thing)

It doesn’t matter what you call it, what we find is that even the most forward thinking processes still include some structured meeting or form that takes the long view and happens at regular intervals. This could be a quarterly check-in, semi-annual performance discussions or even annual reviews (yes there is still room for annual reviews in modern performance management).

Why do many companies still do this?

  • Fairness - It creates a set of standards for employee performance discussions and decisions that are going to happen with or without these reviews.
  • Transparency - It takes the discussions and decisions about employee performance and brings them into the sanitizing light of day.

We’ve written much more about this idea here - In Defense of Performance Reviews.

Goals

Goals can be found across the different types of performance management strategies. The difference will be what the goals are for, their terms, how often they are checked in on and the form they take.

Accountability Goals - Goals will often be role based, like standards of performance for that role. A sales quota is an example.

Development Goals - Here goals often take the form of professional development and tend to be a little looser. They are more about agreeing on a direction than reaching a specific degree.

Alignment Goals - Goals are at the heart of an alignment strategy. They may even make up the bulk of your process. Goals should have some way of cascading across the organization and should be dynamic enough to shift with the needs of the organization.

Feedback

Feedback is all about putting into action the ideas and intentions from reviews and goals.

Feedback can take many forms. You could instill a culture of continuous feedback that exists without strict systems, or you can formalize a process of feedback with required weekly one-on-ones.

You can also encourage regular recognition or require a few moments of recognition from each employee every month.

How you bring all this together will depend on your goals and your organization. We asked four HR leaders how they think about balancing an effective strategy with both structured and unstructured options:

Balancing Structured Reviews and Unstructured Feedback

Whatever you decide, remember to keep it simple, lightweight and focused on a clear purpose.

Read more about the fundamental elements of performance management here:

The Building Blocks of Modern Performance Management

 

Why it Needs to Be Easy for Employees

Once you have a purpose and layed out a process it can feel like you’re almost done. BUT, the most important step still remains, you MUST make everything easy for your employees.

Read more about 5 relevant product design principles to keep in mind when designing your process:

Approach Performance Management Like a Product Designer

Every step should be scrutinized, every task you assign an employee should be questioned. Modern performance management is more complex and more frequent, the only reason it works is because it is digital first.

Performance management software streamlines and automates the large administrative burden of pulling off a modern strategy. If you ask your employees to do that work they will rightfully decline.

Software allows employees to focus only on the value creating activities, like self-reflection, conversations with managers, and planning.

To learn more about the importance of keeping things easy, read:

First, Take Back Your Time: Before adding complexity, streamline.

What is Performance Management Software

How To Choose Performance Management Software

The Most Important (and Overlooked!) Features to Consider When Selecting Performance Management Software?

 

How to Evolve Your Performance Management Process

Lastly, plan to continue to work on your process. Improve it, expand on it, evolve.

Just please don’t throw it all away and start again whenever a new trend comes along.

We have a lot to say about this topic, but honestly no one explains it better than Jon Stein in his article for First Round’s blog - Betterment Tested Three Performance Management Systems So You Don't Have To.

And read this case study on our customer Colorado Health Foundation.

For additional insight check out:

Why You Should Iterate On Your Existing Strategy

Should You Test Your Performance Management Process?

 

Examples of Modern Performance Management

So what are the world’s leading companies doing? Here is a long list of examples from big name brands and several smaller organizations that you may have more in common with.

Case Studies

Spoor Bunch Franz | Accounting Firm | 50 Employees

Semi-annual reviews, monthly feedback, and additionally custom cycles for departments, roles and new employees.

Five Star Technology | IT Services | 140 Employees

Quarterly check-ins with broad 360 reviews that are qualitatively coded around the company’s six core values.

J2 Interactive | IT Integrator & Developer | 150 Employees

Quarterly conversations with annual goal-setting and a year end review to summarize performance.

InvestiNet | Receivables Management | 100 Employees

Four types of goals with weekly check-ins make sure everyone’s work is aligned and that they’re living the company mantra of “never settle for the status-quo.”

The Colorado Health Foundation | Foundation | 60 Employees

A quarterly conversations process with annual goal-setting, a simple year end review, and lots of flexibility.

More Examples

How Does Amazon Do Performance Management?

3 Approaches to Performance Management: Google, Betterment and IBM

How Does GE Do Performance Management Today?

How does Facebook do Performance Management

Performance Management at Tesla: What we know.

How Regeneron Built Their Performance Management System

How Does Uber Do Performance Management?

How Does Asana Do Performance Management?

How Netflix does Performance Management

Deloitte's Radically Simple Review

 

 

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3/26/2020
How to Write a Self Review

Self Reviews or Self appraisals; to some, they feel like an oxymoron, and to others, they create an opportunity to reflect on past achievements.  But for many, they are a necessary tool used during employee performance review time.

Why Write Self Reviews

As tedious as the entire appraisal process can turn into sometimes, the self evaluation portion actually serves a useful and important purpose. 

Self-appraisals are meant to engage an organization’s workers in the evaluation procedure.  Instead of just being the recipient of feedback, employees are given a voice in the process.  They’re also believed to help employees plan for future development goals, as well as open communication channels for performance related issues.  Let’s face it, in self evaluations, accountability starts with you, and that’s exactly the effort behind them.  

How to Write a Good Self Review

We’ve established the importance of the self-appraisal, but there are several key elements of writing a good one that’d be wise to consider.  Writing a self-appraisal can easily become a struggle if you don’t know what to say. There are questions you must first ask yourself, and then there are topics you’ll really want to cover with your manager.

What You Should Think About

Before you start, ask yourself some questions.  What has been the biggest challenge in your position thus far?  How can you do any of it differently? Do you have real strengths worth highlighting?  How might the work environment affect this? Lastly, what do you want to achieve from this job and how are you motivated to do so?  This is meant to dive into key components of what a self-appraisal should cover.

What You Should Address

1 Your Accomplishments

This is not the time to be shy or humble.  Be proud of what you’ve done and support it with facts.  Holding back your value just makes your achievements less visible to your employer.  You might be asked to rate yourself with certain performance measures, or you might have to specifically describe accomplishments and their effect.  Either way, compare the experience to writing your resume - make it attractive but honest.

Gather the data.

It is important to discuss your accomplishments while supporting them with facts.  “I saved the company money by reducing costs” is vastly different from “I saved the company 13% by renegotiating contracts with our current suppliers.”  Quantitative data speaks for itself!

Align yourself with the company.

Remember to talk about yourself through the perspective of your team and boss.  Unless it affects them, it’s not as relevant to the overall picture. Were there any goals your manager or team were striving to reach over the past year and how did your efforts contribute?

2 Your Mistakes

Everyone makes mistakes.  It happens to the best. Learning from mistakes is probably how they became the best.  Don’t tear yourself down, but be honest and take ownership. Sometimes there aren’t easy answers to the problems we face at work.  The goal should not be to call attention to the failures, but to display your willingness to grow from them and reach solutions.

Impress with solutions.

Rather than disguise your weaknesses with a cliche such as “I’m too ambitious”, truthfully address any areas that need improvement.  Not only is self-awareness is a desirable character trait, your managers pick up more than you assume! Each weakness should have an action point attached to it and be sure to let your organization know how they can help.

Ask for anything you need to improve.

In order to get what you’ll need, you must be willing to ask for it.  After discussing your mistakes and possible solutions, make a pitch. Are there educational opportunities available?  Does the potential to cross-train exist? Conferences, certifications, or taking on projects outside of your comfort zone show your employer that you’re eager to learn.  

3 Your Goals

Once you’ve essentially outlined the pros and cons of the past year, set new goals on your self-appraisal.  This will be the most meaningful part of the process. Professional goals can be categorized into two groups; what you want to achieve in your current position, and goals you have for professional advancement.   

Get a Second Opinion

Getting a second opinion doesn’t seem conventional for an appraisal, but since self-appraisals are only one-sided, it is common to bounce your ideas off of coworkers, family, and trusted colleagues.  They can help you check for errors and make sure your tone is appropriate.  

Advice from your coworkers might also remind you of things you’ve overlooked.  Maybe you worked on a project where you thought you messed up, but a team member has objective opinions that differ.  Overall, it can’t hurt to run your self-appraisal by someone who’s known you for a long time.

Who do Self-Appraisals Benefit?

Maybe your company doesn’t currently administer self-appraisals as part of their annual evaluation.  But, here’s an idea, it’s extremely helpful to have one anyway. By practicing some of the methods mentioned above, you could create excellent talking points for your regular appraisal.  It can be quite advantageous to have the added input from coworkers, as well as mindful knowledge of your strengths and weaknesses.

Self-appraisals, done ever so often, are also a good way of avoiding pressure from annual meetings on the matter.  Sharing your ups and downs throughout the year keeps your manager cognizant and available. In this way, self-appraisals have become very popular, as they promote employees to monitor themselves and self-correct.  However, as you can see, they’re an extremely useful tool for employees themselves.

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3/19/2020
Approach Performance Management like a Product Designer

We geek out over performance management process. For us, and many other HR professionals, it is what we get paid to think about. But! that is not the case for most (almost all) employees at your organization.

For most employees performance management is a distraction. And worse it doesn’t do anything for them. Employees are paid to do their job, and HR asks them to stop doing their job for this other thing they feel has no value.

There’s no use arguing it, this is the reality every HR department faces when they try to introduce new performance management initiatives. Most employee’s first thought will be, “how big of a waste of time is this going to be?”

It is our job, HR’s job, to change this narrative, to prove people wrong, to justify our initiatives. We can’t lean on the fact that we’ve been given authority, we should be winning over employees, not forcing things on them.

The Product Designer Mindset

The first step is taking on a new mindset. We should be designing our performance management processes for our employees. We should start thinking of them as customers we want to win over, and start thinking of ourselves like product designers.

The product designer framework is helpful because there is a tremendous amount of existing research into product design, customer experience, and service design that we can lean on. Even if it isn’t a perfect analogy we think it’s a valuable one and we think it’s always a good idea to learn new lessons from experts in other fields.

Relevant Principles from Product Design

Solve real problems | Start with needs

It’s amazing how many organizations have only a vague understanding of why they’re running a performance management process. Start by understanding the needs of the organization and the needs of your employees.

Print them out, put them on the wall, read them out at the start of each meeting. If you stay true to these needs it will bring great clarity to the design process.

Do less | Simplify | Choose better over more

Focus your efforts on one thing. It is better to do one thing really well than to do many things poorly. Even if your ultimate goal is the most far-reaching performance management process in history, start small.

HR needs to build up trust and buy in from the organization, and you do that by knocking each new thing out of the park. Impress your employees with the first thing you introduce and they’ll be ready to jump on board with the next thing.

Be easily understood | Be intuitive | Minimize cognitive load

Have you ever heard this in a meeting? - “oh they’ll be able to figure it out…”

Expecting someone to “figure it out,” is a huge taboo in product design, but it is extremely common everywhere else. Yes, it’s true that employees will mostly be able to figure out how to navigate that cumbersome process. The problem is that they’ll be frustrated, uncertain, tired and just “over it” by the time they get there.

Making it easy matters.

Good design is as little design as possible | Be unobtrusive

The process should almost disappear. Employees should spend all their time on the value creating aspects of the initiative, and none of their time on the administrative/process aspects.

One classic example of this is when review forms contain a section where the employee just copies down their personal information, like name, ID number, job title etc. The organization already has this information! Why are they wasting the employee’s time to copy it down again?

Stay thorough to the last detail | The last 10% is the hardest | Fit and finish matter

Details matter. Getting this right is about more than the questions on your forms, choosing quarterly vs annual check-ins, or deciding the number of peer reviews to include. A great performance management system is about all the little details.

How clear and concise are your emails? When and how will you remind employees to complete reviews? Where will employees see what is expected of them/left to do? How do you encourage managers to leave more feedback? How do employees know what an effective goal looks like?

The Takeaway

Changing the narrative around performance management, and getting buy-in from employees should be HR’s responsibility.

We can’t rely on our authority we need to win employees over with great design. Let’s learn something from the product design community and start wowing our employees.

If you’re interested in further reading, here are two fun product and experience design books to get you started:

The Design of Everyday Things by Dan Norman

The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary by Joseph Michelli

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3/10/2020
Alternatives to SMART Goals

SMART is great, but it has become cliched. Many people assume they know what it means without ever thinking very carefully about it. That said, the science behind SMART is as relevant as ever.

The majority of the great discoveries on goal setting came from Professors Edwin Locke and Gary Latham. After two lifetimes of research these men partnered on a seminal book released in 1990 that summarized the science of effective goal setting. It is called “A Theory of Goal Setting and Task Performance.

The book is full of insights and well researched ideas, but it doesn't have any catchy acronyms. Here is what the professors say about setting effective goals regardless of the methodology or acronym you choose.

The line between success and failure should be crystal clear

Great goals don’t leave any room for interpretation. There should be no ambiguity in what accomplishing the goal will look like. This is because corporate goals are a form of communication, they are about two or more people agreeing on a shared destination. If the goal isn’t clear it may not be aligning everyone in the same direction.

Additionally, unclear goals can have a negative impact on persistence. People will reinterpret an ambiguous goal to make their life easier just when things start to get hard. The S, M, and T in SMART all relate to having unambiguous goals.

Goals should be challenging

A person should see their goals as difficult but achievable. This leads to the greatest efforts. When we believe we can achieve a goal but know it will be hard, we feel energized and excited about the prospect of succeeding at something meaningful. Conversely if we don’t see the goal as difficult we won’t be inspired by it, and if we believe a goal is too difficult we can become overwhelmed by it and give up before starting.

Note that all of this is about perception. Great leaders often convince the people around them to believe in audacious goals they might never have tried on their own.

We must be committed to our goals

Part of the power of goals is that they focus our attention and increase our persistence. We are more likely to follow through when things get difficult if we’re trying to accomplish a goal. However, this is only true if we’re committed to that goal.

Organizations drive goal commitment in many ways, but the best option is to inspire employees to believe in the importance of their goals. When NASA was shooting for the moon, no one had to post the junior engineer’s goals on the bulletin board to keep him committed to the mission.

We should have the necessary skills

How much a goal impacts our performance is partly related to whether or not we already have the skills to achieve the goal. Goals are great at driving persistence, but they are not as good at driving creativity and learning. The impact on performance of a goal will be moderated by how capable we already are at achieving it.

The more we know about how to achieve a goal, the greater the impact goal-setting will have on our performance.

Effective goals need control systems

Goals can be too effective. They can become so motivating that they drive your employees to cheat.

That is why it is important for goals to come with control systems. It is not enough to achieve our goals, we must achieve them in the right ways. Effective control systems include a strong culture, well-articulated expectations, or oversight.

Whatever framework you choose, be sure that your goals include the scientific fundamentals of effective goal setting. Locke and Latham have much more to say about goals in their book, it's worth a read.

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The Purpose of Performance Management: 5 Options

Performance Management is a big idea. We’re talking about improving the performance of every employee at your organization.

How do you even begin to tackle something like that? At PerformYard we believe the first step should be defining your purpose.

If you are developing a new performance management strategy you’ll find yourself pulled in many directions. Someone on your team will push for OKRs, another person will tell you about the weekly 1-on-1 process they read about, and still another will recite the adobe quarterly check-in case study.

The best way to evaluate all the ideas that will be thrown your way is to start with a clear sense of why you’re developing a new strategy and what you’re trying to achieve.

Choosing a purpose is one part of designing a modern performance management system. For everything else you need to get started read our full guide here.

Choosing a Purpose

We’ll get to the five purposes quickly, but it is important to mention this first. You can’t do all five!

Maybe you can if you’re already crushing 3 or 4 of them and you want to layer on a new initiative, but most of us aren’t there.

It is very important to focus with a new initiative, and so you should choose one or two from the following list. Kick those out of the park first, then layer in others.

So how do you choose?

One purpose will tend to be better fit and have a bigger impact depending on the type of organization you manage. So think about your organization along the following lines, and then map your needs to the best purpose for you.

Decision Rights - How and by whom are decisions made?

Information - How does knowledge move around your organization?

Motivators - What drives your people to perform?

Structure - What are the lines and boxes that connect people?

This framework comes from a great little book called Results: Keep What's Good, Fix What's Wrong, and Unlock Great Performance, check it out if you’d like to go deeper on diagnosing the performance needs of your organization.

The 5 Purposes

Ok let’s get to why you’re here. But don’t forget that you should be thinking about choosing the right purpose for you, not how you can do all five!

1. Accountability

This is the old standard, and while it has fallen out of favor in recent years, it absolutely still has a place.

Performance management systems that focus on accountability evaluate employees against standards. A classic example would be the sales quota.

These systems can work very well because employees know what is expected of them and are highly motivated to achieve the standard.

What the standard is and how it is established is very important. It helps to have many people at your organization performing the same well-defined role. For example with 15 sales professionals doing the same job you can begin to standardize what level of performance is and is not acceptable.

Beyond setting the level of performance it is also important to determine how you will measure performance. Unfortunately, there is rarely a straightforward way to measure high-performance, so we rely on metrics that are just indicators. We must choose these indicators carefully to prevent people from gaming our system.

There are many examples of accountability standards gone wrong.

Public school teachers “teaching to the test” is one. Some school districts are heavily incentivizing teachers based on their students test results and so teachers focus more on the test than on the thing the test is designed to measure.

Another example is the Wells Fargo fake accounts scandal. Bank employees were so fearful of getting fired for not opening up enough new accounts that they began to open fraudulent accounts to keep their jobs.

With the right system and the right employees we believe there is still a place for accountability focused performance management.

Best for:

Organizations with well-defined roles, many people in those roles and measurable results. It also helps to have a large pool of qualified candidates to fill vacancies.

How it can go wrong:

Employees could be tempted to game the system as we see with “teaching to the test” and the Wells Fargo scandal.

2. Development

Development focused performance management is having it’s day! Popular tactics like weekly 1-on-1s, continuous feedback and engagement surveys fall squarely in a development focused performance management strategy. The idea behind a development focus is that employees don’t need to be forced to perform, they want to perform well and just need to be developed.

The increasing need for agility, creativity, teamwork, self-direction and other totems of the modern workplace have all made it difficult to effectively apply accountability standards. Which has increased the organizations taking on a development focus. Additionally, a tight labor market for many roles has led organizations to eliminate any sources of employee dissatisfaction. Being rated and ranked is not something most of us enjoy so moving away from accountability is a way to appease employees.

However, while development focused performance management is spreading, it has always been an important part of the professional services industry. For these firms, turning college students into high-paid advisors is part of the business model. Structured training and regular development conversations are the status quo.

It is important to note that just because development focused performance management is popular, does not mean it’s for everyone. It tends to work best for employees who have a lot of intrinsic motivation to improve their performance. This could be due to competition for career advancements like in professional services, it could be due to a desire to develop skills like in tech or creative work, some combination, or something else entirely.

If your employees don’t live for their work, and think of their job as just a paycheck you’ll either need to change their mindset or not use a development focus.

One more note on development. It is not the same thing as learning management. You don’t need to have very structured training to run a development focused strategy. Google famously gave employees “flex-time” to pursue their interests at work. This is a development focused tactic that had no top-down direction at all.

Best for:

Knowledge workers, team based work, or employees with a lot of self-direction.

How it can go wrong:

Employees need to be intrinsically motivated to improve their performance. We often see tech companies struggle to build sales teams because sales lends itself to an accountability/recognition focus, while many tech companies embrace a development focus with their engineering teams.

3. Recognition

One of the most common complaints about informal continuous feedback strategies is that employees don’t know where they stand. CEB conducted research on organizations that had dropped ratings and rankings. One employee in the study shared the following:

“I have these great conversations where I thought they were providing feedback, but it was like me reading my horoscope. I only found out the truth about my performance when I didn’t get a raise. If I had gotten a score I would’ve had more clarity.”

Your most driven employees likely embrace some level of competition with their peers and also have aggressive personal goals. These employees want to know if they’re on the right track, they want to know if they are achieving their goals.

Deloitte recognized this in their performance management redesign. In the HBR article about their new performance management strategy they say,

“We began by stating as clearly as we could what performance management is actually for, at least as far as Deloitte is concerned. We articulated three objectives for our new system. The first was clear: It would allow us to recognize performance, particularly through variable compensation.”

The result for Deloitte was a short four question manager review, with three of the questions designed to recognize top performers, and one designed to call out low performance. In short they were:

  1. I would award this person the highest bonus. [Disagree to agree scale]
  2. I always want this person on my team. [Disagree to agree scale]
  3. This person is ready for promotion. [Yes or No]
  4. This person is at risk for low performance. [Yes or No]

Deloitte did other things with their performance management strategy as well, but their primary focus was to recognize, compensate and promote their highest performing employees.

Recognition for high performance can backfire, especially if it involves extreme compensation. You could find yourself rewarding the most unscrupulous of your employee's, which is a big part of what took down Enron. If you don’t set guide rails, extremely driven employees might do whatever it takes to win, even if that means committing fraud. This usually happens when the rewards start to become extreme.

Recognition can also fail if the act of recognition feels empty. If you’re putting up an employee-of-the-month plaque, and your employees don’t respect or care about the honor, then your recognition efforts will fail.

The form of recognition needs to let employees know they are achieving their personal goals. For some organizations, employees personal goals and work goals are just harder to align.

Best for:

Organizations with highly motivated and driven employees, opportunities to promote from within, and room to give some variable compensation.

How it can go wrong:

Extreme recognition can lead to extreme, and maybe even fraudulent, behavior from your most driven and unscrupulous employees. Empty recognition or recognition for things your employees just don’t care about won’t have much of an effect.

4. Alignment

Alignment embraces the idea that you don’t need to manage people’s performance, you need to get out of their way. If you can clearly articulate what needs to get done, your employees will get after it and make it happen. This is the realm of goals and OKRs.

Jon Stein of Betterment, wrote a fantastic post for First Round Review on how he thinks about performance management. First he says you must “start with the why.” You already know we love that. Then he lays out his three goals for an effective system:

  1. Create clear lanes for your team to run; and align your structure key and processes to achieve what needs to get done.
  2. Empower employees to run as well and as fast as they can in the right direction by providing the right context.
  3. Define measurable goals to hit in a way that makes it clear to everyone what they're supposed to be doing every day.

There is nothing in these three objectives about holding people accountable, developing employees or recognizing achievement. Jon Stein is laser focused on alignment through clearly articulating goals and expectations. (to be fair I’m sure Betterment does many of the other things on this list, but with this initiative they were focused on alignment.)

Stein eventually arrived at a very effective system, but it took some trial and error to get there. One of the greatest challenges was setting goals in an uncertain and dynamic environment. How do you both 1) tell employees what they should be doing but 2) don’t micromanage or overprescribe, leaving them room to run and adapt.

This is one of the most common downfalls of systems that focus on alignment. It is very hard to set great goals. When alignment systems are done poorly, they don’t give everyone room to run in the right direction, they strangle action and encourage odd behavior.

One example from the Betterment case study was what happened when they introduced team goals. The teams became aggressively siloed and even competitive with each other because everyone was focused not on company success, but on team success.

Best for:

Flat organizations with highly distributed decision making and information flows. Hierarchical organizations are just naturally better at alignment and don’t need as much help. Flat organizations need a way to get everyone moving in the same direction.

How it can go wrong:

Whatever you measure will improve, but it can be hard to know what to measure. There is no simple measure for high performance.

5. Reinforcing Values

So what if your employees are all naturally accountable, pursue their own development, are happy with their level of recognition, and know exactly what to do… is there any performance management to do?

At the Stanley Clark School, a K-8 institution in South Bend, Indiana, the Head of School Melissa Grubb went with another approach. Her focus was on instilling a set of values in every employee. She wrote about her process for Gibson’s blog.

The idea is to bring the organization’s values off the wall, and into conversations between employees. At Stanley Clark teachers reflect on 6 questions and 30 statements before having a regular conversation with their manager. The goal is to increase self-awareness within the context of the school’s culture.

The values/expectations are well articulated, and target issues that Melissa has recognized as vitally important to a great school culture. The hope is that if employees embrace these values the results will trickle down to every element of performance.

To get this right it’s so important that your values are well articulated. This means more than short ambiguous slogans. Values should be turned into practical expectations that everyone can understand.

Some examples of Stanley Clark’s 30 statements are:

  • Situations usually improve when I am part of them.
  • I am usually pleasant to be around.
  • I control tone well in both written and oral communications.

Additionally, your process should focus on self-reflection and conversation with others. Cultural values can’t be reinforced just by checking boxes on a form.

Finally, be sure your values are being informed by the actual values of your organization. If values are established top-down and employees don’t buy in, you will have just built a big waste of time.

Best for:

Organizations that struggle with toxic cultures. Some public sector organizations fall into this category.

How it can go wrong:

It’s hard to know what cultural values to emphasize. If you get it wrong employees will resent the process and consider it a useless exercise.

What’s Next?

Once you’ve decided what matters, it’s time to build your process. Evaluate every performance management tactic with the lens of “does this advance our purpose?”

Don’t let your process become bloated. If you keep it simple and focused you will have much more success getting employees to adopt it.

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2/26/2020
How Netflix does Performance Management

Netflix's no-holds-barred approach to HR has gained the attention of many, both good and bad. This is because they’ve succeeded not only in retaining prime talent, but also in achieving a high-performance culture.

The methods Netflix applies could be called radical, but they address challenges that all organizations face. Here are four common performance management challenges and how Netflix overcame them.

Challenge #1 - Do as we do, not as we say.

According to Netflix, leaders and managers need to live and breathe company values into everything they do. Your mission statement and company values are not supposed to just sound nice, they’re supposed to be displayed throughout the work of your employees.

Posted on Netflix’s famous culture deck, is a stark comparison between a list of Enron’s company values and photos of their leaders in handcuffs. They go on to state that Enron’s values weren’t truly what was valued there. Netflix wants to strictly reward and promote employees that demonstrate their values and let go of those who don’t. It’s that simple, but it’s a big deal.

Challenge #2 - Annual evaluations are 1 year late.

Several years ago, Netflix revamped their performance management by completely doing away with annual performance evaluations. Annual reviews were irrelevant one year later, consequentially meaningless, and they felt like a waste of time.

Instead, Netflix opts for a 360 degree review procedure. The reviews are regular but informal. In this new procedure, employees are advised by their colleagues on what they should stop, start, or continue. The reviews began anonymously at first to avoid awkwardness, but since then, they shifted to signed feedback and later face-to-face 360 reviews. Opting for full transparency, Netflix believes people can handle anything, as long as they’re told the truth.

Challenge #3 - Needing the Dream Team

Despite ditching formal evaluations for the 360 degree review process being bold enough, Netflix makes the reviews public. In fact, employees are encouraged to give one another blunt feedback with the purpose to provide ongoing opportunities for improvement. Their belief is that in order to build a dream team, an organization must “ foster collaboration, embrace a diversity of viewpoints, support information sharing, and discourage politics.” This can’t be done without hiring well.

The desire is for one entire dream team versus a few small groups spread out throughout the company. Managers use what they call a “keeper test” to build their team. Essentially, they’re asked to question “Would you fight for that employee?” The end goal is to give ownership of building great teams back to managers.

Challenge #4 - Understanding the Full Context

Netflix wants their employees to think independently and be able to make decisions on their own. The leader’s main job at every level is to provide clear and complete context to create autonomous thinkers. With the right information, employees are given the confidence to make great decisions.

Former Chief Talent Officer and co-author of Netflix’s culture doc Patty McCord says “The best managers figure out how to get great outcomes by settling the appropriate context, rather than by trying to control their people.” It’s important that managers at Netflix don’t try to control their staff, rather provide the framework to get the best results out of them.

How do employees feel about it?

It seems that getting fired is never really far from your mind, if you work at Netflix. The keeper test in itself is not always a source of comfort for employees. Managers also say it makes them feel pressured to fire people or “risk looking soft.” According to Glassdoor, the culture of fear is actually one of the most frequent cons. Many employee reviews mention the highly competitive environment makes work-life balance difficult to achieve. Other cons focus mostly on the transparency of the 360 review process; learning the details about why someone was let go or watching the politics carried out after uncomfortable feedback is made public.

So how is it that they maintain a seemingly average score? What are the pros that make working at Netflix a positive experience? Most reviewers seem happy about the perks; free lunch, free coffee, flexible schedules. However, the most resounding pros listed repeatedly are compensation, freedom, and responsibility. Netflix’s theory of responsible people thriving on freedom really works here and the employees seem to love it.

Can the Netflix approach work for you?

At Netflix they hold strong to the belief that if you talk simply and honestly about performance on a regular basis, you can get good results. Opting for full transparency is certainly not for everyone. Employees chime in on the company’s path, price increases, logos, literally everything. But can this work for any organization? McCord’s own advice would tell managers to think like business people and ask “what’s good for the company?” Then, implement those strategies, because when a company is at the top of its game, the people and their morale are also.

More Inspiration

Netflix is not the only organization going its own way. These days most great organizations are thinking critically about performance management and coming up with innovative new solutions. Here are a few more examples to help inspire your own strategy.

How Does Uber Do Performance Management?

Deloitte's Radically Simple Review

How Does Amazon Do Performance Management

How Does GE Do Performance Management Today?

3 Approaches to Performance Management: Google, Betterment and IBM

How Does Facebook Do Performance Management?

Performance Management at Tesla: What We Know

How Regeneron Build their Performance Management System

How Does Asana Do Performance Management?

And if you're ready to take the next step, check out our guide to creating your own modern performance management process.

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1/14/2020
The Purpose of Peer Reviews in 360s

The 360 peer review is a professional feedback process that invites a group of coworkers to provide feedback about a fellow employee's job performance. It can be described as a type of appraisal that offers a unique perspective on the person’s skills, competencies, and even their personal temperament.

Similar to other types of review systems, the objective of a 360 peer review stays the same; to measure an employee’s work performance. However, this type of feedback also results in giving employees a better understanding of how their work is viewed in the total organization.

360 degree feedback is not limited to a standard rater setup, such as your direct report. Instead, it allows you to use multiple raters such as peers, supervisors, subordinates and external raters like clients or vendors, to leave feedback on an employee.

What Purpose do Peer Reviews Serve in Performance Management?

You may ask yourself “but why bother gathering all the extra data?” Put into practice by many well-known companies, 360 peer reviews can be quite useful if implemented correctly. Here’s a breakdown of how they can help:

1. Professional Growth

After bringing together the group ratings, an employee or management can identify a starting point for development of new skills. The 360 feedback is often used as a benchmark within the employee's development plan.

It can be used in addition to an annual performance review or upon request when looking to cross-train, transfer, promote, etc. Ultimately, the employee being rated discovers their potential to perform at a higher level as well as opportunities to grow professionally for future assignments.

While professional growth is most important to the employees themselves, employers are responsible for providing an environment in which employees are encouraged and supported in their growth needs. Multi-rater feedback can provide excellent information to an individual about what they can do to enhance their career.

2. Personal Development

Depending on how you coordinate 360 peer reviews, the results can often help identify personal blind spots of an employee’s behavior and the impact they might have but never notice. While the results are designed to assess broader strengths and weaknesses, they also let the employee know how his/her coworkers view the significance of their performance.

The combined reviews create a balance among all the different perspectives (instead of getting only the manager’s point of view) which gives an employee a better idea about their behavior and talent.

This new, improved perspective is valuable enough on its own, but a great 360 review will also combine the feedback with the employee’s goals in order to create a road map for self-development.

3. Team Development

A 360 peer review is an approach that can help team members work more effectively together. Understanding how others view your strengths and weaknesses not only creates an awareness of how to best work with others, but it also improves communication among team members.

Furthermore, because teams know more about how their own members are performing, a 360 peer review makes the employees more accountable to each other. They will eventually have to share the input provided on each members’ performance which is central to team development.

4. Improved Customer Service

Probably one of the most important uses for a 360 peer review, is to improve your customer service. Here, an employee receives valuable feedback about the quality of their product or service, usually in a process that involves an internal or external customer. This type of feedback is used to enhance the quality of the employee’s output and reliability of his or her service or product.

5. Performance Reviews

Lastly, 360 peer reviews come in handy during annual evaluations. This purpose is mostly administrative as the results of the feedback are used for performance management. The reviews are generally shorter and focus mostly on competence and skills for an employee's current job.

Several studies have shown that the use of 360 degree feedback has helped improve performance because the employee being reviewed gains a different perspective of their work. This makes sense because, unlike technical skills, business skills lack immediate, built-in feedback. It is difficult to know if you’re succeeding without input from other sources.

What are the Pros and Cons?

The two most popular arguments in favor of 360 peer reviews are increased self-awareness and freedom from the views of your boss.

Taking a look at the several purposes of 360, it is easy to see that one of the greatest benefits overall is an increased self-awareness. It is a perfect design for a company with a growth mindset and strong teams. With the added benefit of being valued across a larger organization, employees can really begin to take ownership of their performance, career paths, and goals.

The two most argued disadvantages are the potential for unreliable data and the focus on employee weaknesses versus strengths.

Especially in large companies, 360 survey participants responsible for providing feedback can be on completely different pages when it comes to evaluating the performance or behavior. While one rater thinks a great job is a 5, another rater could consider a great job a 4, but they both agree that the job done was “great”. This presents a challenge to the employer trying to develop performance standards.

Secondly, are the raters rating someone they’ve worked with for many years, or their brand new boss? Are they trained, knowledgeable, or experienced at rating performance? Are the reviewers venting frustration or providing inappropriate commentary? Even if such cracks are not present in the system, there might be highly specialized skills that raters do not understand. It is difficult in this scenario to gain a full picture of performance.

When it comes to highlighting an employee’s weaknesses more so than their strengths, one can easily create a negative culture. Due to the nature of 360 feedback, managers and executives are often forced to examine an employee’s weaknesses more closely than their strengths. This quickly creates a great deal of resentment on the job and it’s a downward spiral from there.

Who Benefits Most from 360 Peer Reviews?

It is clear that individual employees reap the greatest reward from a peer review undertaking. Not only does it help them to grow in different ways, it helps them to work better across the organization and with others. However, the added time and documentation required to support a survey-like assessment can require extra planning and resources.

We recommend that somewhere between 12 to 24 month intervals are most appropriate for repeating a 360-degree feedback process. This allows people to work through their development and action plans to create change.

Keep in mind that 360-degree feedback is not equally useful in all types of organizations with all types of jobs. Using this as a tool for appraisals is not always job based, and will eventually require education and training. Seeing as 360’s are extremely effective when used as a development tool, consider using it at the end of a project or if you want to provide coaching or succession planning.

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12/20/2019
3 Ways to Improve your Performance Review Forms

When performance reviews are faulty, it is easy to recognize that change is necessary. Yet finding the solution may not prove to be so simple. You might find yourself caught in a routine of trying every new strategy, but this can make things worse. Safeguard yourself from this common mistake by improving your forms in 3 easy steps:

#1 Keep Them Short

If you’re in HR you’re already dealing with a great deal of paperwork. Don’t over do it with ineffectual and tedious review forms. The key here is to balance the depth and frequency of the review process.

Deloitte has found that a large part of the review process is actually useless. When redesigning their performance management system, it was noticed that managers were being asked to answer an awful lot of questions about their employee’s abilities in different skill categories. Yet research has shown that people are horrible at rating skills, which means these sections of the review were probably generating meaningless data.

For example, these types of questions are almost always guaranteed on a review form: “How well does this employee live up to the company value of ‘Be Genuine’?” That is a well intentioned question but unfortunately it creates data that never gets used. In fact, that data should probably never be used because it is likely meaningless as well.

All of the questions that weren't serving the needs of their quantitative review were removed from Deloitte's form.

A Raise or Promotion?

During this overhaul, Deloitte wanted to develop a way to categorize employees when deciding upon their compensation or promotion.

The team looked at their current review process which involved extensive ranking discussions and a long review form. The form also involved many skill-focused questions, which again caused their current process to be overly inefficient when trying to recognize these two needs.

The original goal of the lengthy forms was to create a way of scoring and identifying employees. Once classified, the data would be used across the organization to make decisions about promotions and compensation. For Deloitte, the quantitative feedback gathered about their teams is particularly important because they do not use their structured reviews as a way to force team leaders into managing. Instead, managing the team is left up to the manager.

So how did they minimize their forms while maintaining the original intent? It brings us to our second tip. Ask easy questions.

#2 Ask Easy Questions

Keep it simple and ask what you really want to know.

Don’t beat around the bush, try to be too clever, or do complex analysis of multiple questions. Chances are just asking one solid question will do. For example, I could ask you about the smokiness of the pepperonis on your pizza, the gooeyness of the cheese, and the crunch of the crust. Or I could just ask “did you like your pizza?”

One of Deloitte’s famous “simplifications” turned out to be their decision to ask managers if they want to have an employee on their team again. It seems quite feeble but their prior strategy was for managers to first rate employees on several characteristics, then analyze those answers and assign the employee a rating. Their old system was just a more complex method of reaching the same basic result.

Ask questions that can be answered.

Sounds too easy right? Indeed, but reviews are infamous for asking managers to score employees on things like impactfulness. How will your managers know what a “3” versus a “4” is in impactfulness? It is necessary to either give them an especially thorough training on how to answer your questions, or ask questions they already know how to answer.

You can ask the reviewer the following two questions in order to receive the same input/feedback: “Do you think the reviewee should be promoted to management?” or “Score the employee 1-9 on the following six qualities of a manager.” One is much easier to answer.

#3 Focus on the future:

If you have a once-a-year process that emphasizes financial rewards and punishments, whether you mean to or not, you’re focus is holding people accountable for past behavior rather than improving current and future performance. Asking the right performance review questions at the right time is crucial.

Check-in.

Touching base with your employees on a regular basis makes reviews more of an ongoing process that shifts the focus forward. They can motivate and modify performance, adjust goals or recognize employees in actual time instead of reflectively.

Ask questions that look ahead.

Secondly, ask questions that invite the employee to look ahead. Rather than asking what their biggest strength is, you can ask which one of their personal strengths will be most important in the coming year. Another example is asking “what serves you the most while working on this project” instead of “are your strengths being maximized here?” As you can see, specific, engaging words leave no room for ambiguity.

Be present.

Lastly, make sure you are present. Don’t just review mechanically. In order to affect future behavior, you must work with your employees in real time. Uncommon, but truly effective questions such as these make a big impact; “Have you been given enough feedback to adequately work on this?” or “What feedback or training do you think would have better prepared you for this challenge?” Employees need to know that when all is said and done, their performance reviews are making a difference.

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11/26/2019
A Manager's Guide to Performance Appraisal Meetings

Performance review meetings can be stressful. It can feel like you're gearing up for a confrontation -- but maybe it’s not as hard as you’d think.

We brought together an approach that can help anyone have more effective performance meetings. If you’re looking to feel more confident and comfortable while having better, more productive conversations with employees in your upcoming performance review meetings, here is where to start.

How to structure a meeting

Set the tone and agenda

The goal of the performance review--and what you should make clear from the beginning--is to talk through what is working and what isn’t, with the purpose of helping the employee, the manager, and the company achieve their goals.

The employee should understand that the purpose of the meeting is to establish what they can and should do to succeed going forward.

Share upfront how you intend to structure the meeting. As you'll see we believe in starting with goals, moving to strengths and ending with a conversation on improvements.

Start with goals

Yes, you read that right. While it might seem more natural to finish with setting goals for the future -- we submit that discussing goals first will help to better frame the rest of the performance review conversation.

Establishing the employee’s goals should help set up and inform the entire discussion of strengths, accomplishments, and ways to improve.

If you understand an employee's motivations it will make the later discussions about improvements more fruitful. Rather than saying, "I'd like you to be better at X," you will be able to say, "I think if you get better at X it could go a long way at helping you achieve your goals of Y."

Also, if you uncover greatly misaligned goals at this point, it is important to address those first. If you want an employee to be a future leader, but they're just here to count time until their art career takes off, then that will change the rest of the conversation.

Discuss accomplishments

Give employees a chance to advocate for themselves first. This will also help you better understand what the employee believes is high performance. Again maybe there is misalignment there.

Frame any accomplishments with the "why" it matters to help place them with their impact on the team and organization. This will help focus the discussion when it's easier so that when the topic turns to weaknesses the tone has already been set.

For example, an employee could tell great jokes around the water cooler, and everyone could agree it is a great strength, but when we focus on the why, it puts the jokes in their rightful place.

Address strengths as they are brought up, reinforce the ones that you feel matter for the organization. Push back if the employee fixates on accomplishments that you don't believe are as impactful.

Stick with perceptions and hard facts, don't label. The truth is you can't know who the employee is as a person, all you know is your own perceptions and facts. Even if your label is correct, you can't prove it. Conversations about labels quickly degrade into unwinnable arguments.

Always push for concrete examples. Don't let your employees list off a bunch of perceived strengths without backing them up. Strengths are only as valuable as the accomplishments they generate.

Discuss improvements

When discussing improvements, it’s important to give the employee a chance to be self-aware and bring up their own ideas for improving. Employee will be much more likely to receive constructive feedback, and walk away from a review fully bought-in to making necessary improvements if they raise the idea initially.

Like accomplishments, always frame improvements with the “why” -- how the employee’s increased, optimized performance ties in to their impact on their team or company. Giving concrete examples is also a helpful tool in this portion of the review, in order to avoid misinterpretation.

Big, abstract concepts such as “leadership” leave plenty of room for confusion and uncertainty. In our post on delivering criticism that employees appreciate, we suggest that identifying specific issues and focusing on specific solutions helps to engage employees around finding a solution as well.

Finally, close out the meeting by negotiating a plan and a timeline to revisit improvements. It doesn’t hurt to also reaffirm the employee’s strengths and achievements, especially your good performers. Make it clear that your intentions behind criticism and feedback are to clarify expectations, to provide direction for the coming year, and to help the employee move from good to great.

Conversation do’s and don’ts

Do:

  • Come prepared. Obtain and bring the necessary materials and data to already be well-informed about the employee’s performance, strengths, and achievements before the conversation begins.
  • Be direct, factual, and detail-oriented. An honest conversation paves the way for effective performance reviews. Instead of sugarcoating the review for poor performers, use the face-to-face interaction to call for improvement. Be intentional to point out work-related behaviors that you want the employee to stop, start, or continue.
  • Listen intentionally. Ask questions and make sure to allow the employee to share his or her thoughts, views, and perceptions of their own performance. Understand that change can be jarring for employees, and remain calm if emotions become heightened.

Don’t:

  • Wait until the formal review. If you’ve observed performance issues in an employee, make sure you’re maintaining an ongoing system of feedback and communication so that there are no surprises in the performance appraisal.
  • Confuse the job for the person. Your conversation during performance reviews should be focused on an employee’s overall work performance based on specific, job-related criteria--not their attitude, personality, or character. Focus on the job, not the person.
  • Focus on negative behaviors. Be sure you’re engaging around solutions, not just pointing out problems. Employees want feedback that propels them in the right direction, and chances are they wish to play just as big of a role in finding solutions as you.
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11/21/2019
How Does Uber do Performance Management?

You’ve used the service or at least heard of it. Uber is everywhere. They’ve made many newsworthy moves over the past decade, not just by shaking up the taxi industry, but also by how they’ve handled internal matters such as performance management and employee relations.

How They Manage Their Contract Drivers

One unique aspect of Uber’s business is their relationship to drivers. Drivers can sign on to work or sign out at will. The Uber platform manages the workforce algorithmically, using incentives like surge pricing, ratings, and extensive online training content.

After every Uber ride, the rider rates the driver and vice versa. These regular performance ratings have a real impact on both the driver’s and the rider’s ability to continue to use the platform.

It’s simple, but this regular measurement has a major effect. It’s often called the “observer effect.” Our behaviors change when we know we are being observed.

Uber has created an automated performance management system. It’s like a robot manager. Here’s what that looks like in more detail.

Goals

First, they set goals and clear expectations. How so? When a new driver registers with Uber, they are provided with extensive rules on how they’re expected to perform. This includes very specific ways your account can become deactivated (aka you get fired).

Feedback

Second, the continuous feedback process at the end of each Uber service takes care of monitoring performance and measuring key performance indicators. While ratings have their issues, very frequent ratings from many different people will balance out any biases that might exist in a smaller sample. Although there are some types of biases that can’t be eliminated.

Reviews

Third, there is at type of performance appraisal. Most companies do this once per year but this looks different for Uber contract drivers. If your driver rating ever drops below 4.6, you’ll be dismissed, whereas if you have consistent high ratings, you get a VIP status with additional benefits. This sounds a bit like a continuous rank and yank. Eliminate the worst drivers and reward the top performers.

Performance Management for Everyone Else

Uber’s former performance management system relied heavily on a standard ranks and ratings process but after some of the recent scandals they’ve done away with it.

Uber has a new strategy they call the “T3 B3 process.”

T3 B3 stands for “top three bottom three”, and it asks employees to list their top three qualities or strengths and bottom three areas that need improving. Goals are then derived from these answers and entered into a system which can be accessed by everyone; employees, managers, top executives, etc.

Uber prefers this collaborative review process over the old one because it focuses on development rather than past behavior.

Feedback is given formally and frequently and it gets categorized into positive reinforcement or constructive advice.

Although they believe that positive reinforcement is the key to improvement, constructive advice is necessary for making adjustments. Managers check their feedback ratios on a weekly basis and try to keep them balanced.

In addition to the individual goals around job performance, Uber also has employees set citizenship goals. Employees can create goals for doing good for someone else inside or outside the company.

The “doing good” could be anything from pro bono work, or helping out your fellow co-workers, Uber drivers, or Uber customers.

Why the switch to T3 B3?

Uber’s traditional performance review focused too much on employees' past behavior rather than future capabilities, and having gone through many changes over the past few years, it was time for a brighter outlook.

Employees complained that the old process was subjective and lacked communication which enabled managers to get away with their biases. With minimal feedback, it felt like they were simply being told “this is what you’re good at, this is what you’re bad at, and here’s a score.”

What do Uber Employees Say?

Leadership at Uber claim that their current performance management system promotes a celebration of people, but what do employees say?

Some have noted that “the culture at Uber is excellent” with a “fast paced environment and very low stress levels.” They also believe that “colleagues are what make this place great; very friendly coworkers who are intellectual and hard working.”

Their biggest complaints were over navigating the constant change of leadership and priorities.

Online reviews also show that employees love all the perks like free lunches and flexible time off, but almost everyone complains about the challenge of growing within the company, something that seems to have made a large impact from the previous culture.

So what about the contract drivers? what do they think? They love the independence and freedom the Uber platform affords them, but would like to see better benefits, something that is challenging to provide when you’re set up as a contract worker instead of full time staff. Driver comments online also show the frustration of wearing down their vehicles, and the unexpected costs they incur.

Uber has done a lot of interesting things to manage performance, is there anything that might work at your organization?

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