Performance Management Resources

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

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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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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:

PDFMicrosoft Word | Google DocMicrosoft Excel

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.


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.


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.

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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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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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.


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 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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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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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 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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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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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.


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.


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.


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 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.


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 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.


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 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 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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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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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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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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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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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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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.


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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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


  • 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.


  • 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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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.


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).


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.


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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What is Management by Objectives

What is Management by Objectives?

Management by objectives is a system for improving employee performance where management and employees jointly create objectives.

According to the theory, having employees offer input on goals and action plans is a way to encourage higher performance and commitment. The idea was first outlined by Peter Drucker in his 1954 book, The Practice of Management. Drucker pointed out that employees often lose sight of their objectives because of an “activity trap”. When we get too involved in our current activities, we forget the original purpose. With MBO we jointly agree on common identified goals, which helps to eliminate the activity trap and keep us focused and aligned to our goals.

How does MBO work?

MBO is a results-driven strategic approach to goal setting. The process begins by defining specific objectives through shared discussion, then collaboratively deciding on how to achieve them in sequence. This would allow managers to pace work accordingly and create a more productive environment. As a result, employees see their own accomplishments as they complete each objective reinforcing a sense of achievement. Ideally, employees will fulfill their responsibilities because they have personally been involved with the goal-setting process as well as brainstorming with management on how to reach them. Meeting objectives is later graded with group input and often incentivized.

Why does MBO work?

MBO’s success can be attributed to several important features. The first one is the equal participation of both managers and subordinates. This model cannot function properly unless both parties are aware of their roles and participation. Secondly, MBO emphasizes a joint goal-setting and joint decision-making feature. Superiors bring their knowledge and experience to the table, while subordinates help determine the speed and capacity in which goals can be reached. Lastly, the MBO model ranks high on support levels. Because of its dynamic, managers and employees are forced into effective communication resulting in stronger relationships and positive work environments.

What are the steps?

There are several steps to the MBO process:

  1. Identify organizational goals - Goals must be realistic and achievable, which helps to guarantee your best results.
  2. Define employee objectives - Translate organizational goals to employees. The purpose is to make sure each employee is aware of the objectives and willing to participate in the process.
  3. Monitor progress - Here, management needs to provide proper resources and support so employees can follow through with their action plans. Making the progress measurable is key. If you can show that objectives are being met, your employee will likely experience personal growth and be further motivated.
  4. Performance evaluation and feedback - MBO traditionally uses positive recognition.
  5. Reward Performance - After a performance evaluation, your employee should be rewarded for high performance.

The Pros and Cons of MBO

Management by Objectives has a variety of benefits. The most obvious one is the amount of employee participation and engagement. Increased participation creates a positive work environment as employees feel the direct impact of their mutual work effort. This leads to more motivated employees and a higher level of job satisfaction. Another benefit of MBO is it develops stronger communication skills. The model requires a substantial amount of input and feedback which helps everyone to improve their exchange of ideas. Better communication equals better relationships and clearer direction. Lastly, and probably the best pro to consider, MBO is easily applicable to any organization at all. It is not difficult to implement, no matter the type of industry or size. It can truly suit the needs of most organizations without incurring major costs.

Criticisms however do exist. The most criticized issue of Management by Objectives is its short-sightedness. Some believe MBO has the tendency to consume an entire organization’s resources solely towards achieving goals, overlooking other important needs. This produces the mentality of achieving goals “at all costs” where employees are tempted to focus only on the finish line without considering the quality of their work. If the employee is a manager, this stifles leadership as well. Efforts become polarized as employees begin to focus only on their own set of objectives instead of the bigger picture. Another criticism is the joint approach doesn’t work well when challenges concerning incompatible needs arise. Some would say it is too time consuming and difficult to sustain over time. The most interesting criticism might be that MBO misses the human point. Because it is organization-centric, questions regarding the managers’ personal objectives, needs, and relevance are many times left unanswered.

In Conclusion

Management by Objectives is now a popular and widely used management theory. I believe its appeal to conduct business in a positive, productive work environment would catch anyone’s attention. Decisions don’t feel top-down and each member of the organization contributes equally. The synergetic approach does not lack in benefits and implementing this system is straightforward and clear. Ultimately, keep in mind that MBO leaves behind a demand to meet both organizational and individual purposes, which can easily become problematic without proper leadership.

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What is Modern Performance Management? 5 Steps to Create a Process

Modern performance management is about designing a process that is unique to your organization and its culture. Even with outside role models and inspiration, the most successful organizations are being driven more by what they see inside their company than what they learn elsewhere.

For example, Adobe, Deloitte, and GE each designed a unique performance management strategy, and despite three very different approaches, each was a perfect fit for their organization.

Does Modern Performance Management mean the Death of traditional Performance Reviews? Not exactly.

Sensational headlines would suggest traditional performance reviews are a thing of the past. And yet the leaders of the performance management revolution have all continued to use aspects of traditional reviews in some form.

Adobe still uses end-of-year reviews that summarize performance and allow for discussions about compensation. They chose to reduce the length of these reviews and add quarterly check-ins to create a more ongoing dialog around performance.

Deloitte transitioned to a short four-question review system administered at the end of every project or quarter—whichever comes first. They use these more frequent reviews to create employee rankings, which drive promotion and compensation at the end of the year.

GE introduced a real time feedback app, but they also continue to do annual reviews, which they now call Summary Conversations. Instead of bringing up new ideas, the end of year discussions summarize feedback.

Modern performance management can be intimidating, but it’s actually quite simple. There isn’t some new “right” way to do things. It’s all about taking the old tools and bringing them together in a way that best serves your organization.

5 Steps to Creating a Modern Performance Management Strategy

We’ve taken what we've learned from working with hundreds of customers and put together a plan for any organization to create their own modern performance management process.

We've expanded on this post with a full guide here:

Creating a Modern Performance Management System

1. Understand Your Organization

Be sure you begin the process with a clear understanding of your own organization in the context of performance management. PwC provides a good place to start—they identify four building blocks for diagnosing the needs of your organization and determining your Organizational DNA. 

  • Decision Rights: Understand how decisions are made, who is influencing them, and who is making them.
  • Information Flows: How does knowledge and information move around your organization? Are their formal channels? 
  • Motivators: Identify teams’ and individuals’ objectives, opportunities, and incentives—how does your company’s history and existing practices impact them?
  • Structure: Create a formal organization model with clearly distinguished roles and responsibilities.

The performance management strategy that works for you will be different from what works for other organizations because other organizations will differ on these factors. For example, the right strategy for a flat video game development company will be very different from a 50 year old insurance organization with lots of hierarchy.

2. Set a North Star

Performance management can serve several purposes, and it is important to identify which is right for your organization. Here are a few of the most common-

  • Accountability
  • Development
  • Recognition
  • Engagement
  • Organizational Alignment
  • Reinforcing values

The military has historically focused their performance management strategies on accountability and recognition. In organizations with strict hierarchies and well-defined roles this makes a lot of sense.

In many creative organizations, like Betterment, the focus in on alignment. Flat organizations with many ill defined roles can struggle to together in one direction.

3. Use the Three Building Blocks

With a clear purpose, you’re now ready to develop a clear process. At PerformYard, we’ve found nearly every performance management strategy can be built with just three parts:

  • Reviews: While we’ve seen a lot of pushback against performance reviews, some type of structured review process continues to serve an important purpose. Regularly scheduling reviews allows for longer-term reflection on performance, and a formal process keeps things fair and transparent.
  • Goals: High quality goals will not only motivate your team and move everyone in the same direction, they also form the bedrock of constructive performance conversations. When everyone can agree in advance on what success looks like, then it is much easier to discuss what’s working and what isn’t.
  • Feedback: Feedback is what connects reviews and goals to an employee’s day-to-day. You can think of review meetings and goal meetings as the planning for how we’d like to perform. Feedback takes those intentions and reinforces them, putting them to action throughout the entire year.

4. Get Out of the Way

As HR leaders we care deeply about these topics. It is our job. However, it is important to remember that it is not the job of most people at our organizations. Some employees might even see our performance management processes as a distraction.

That is why it is so important to put on our product designer hats and think of our employees as customers of our product. Customers don’t want confusing and time-consuming products that don’t provide them clear value.

If you’re current system is bulky and disliked internally, the first thing to do is fix that.

You won’t have any buy-in to build on your existing performance management process until you make it easy and useful.

At PerformYard we streamline any performance management process you want to run. By design we do not force anything on our customers. Whether you want to do annual manager reviews or are going to try weekly 360s it can all be managed simply in PerformYard.

Once you’ve streamlined your existing process, then it’s time to start iterating.

5. Iterate, Iterate, Iterate

If your company has more than 1 employee there is already some type of performance management in place whether its formal or informal. And one of the great benefits of accepting that there is no magical right way to do performance management is that you can embrace your existing process and start improving it year after year.

Rather than make wholesale changes to your process every year, keep what’s working and drop what isn’t. For example, maybe this year you add 4 quarterly conversation, and remove a third of the questions from your annual review. See how that works, then next year adjust again.


Modern performance management is about doing what’s right for your organization. While a big clunky annual review may no longer be right for you, that doesn’t mean you need to make a jump to continuous feedback and OKRs. You already have the building blocks, so simplify your process and start iterating. Before you know it you’ll have your own modern performance management process.

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Why SMART Goals are Important

The ideas behind SMART are timeless, however if you simplify complex ideas into simple acronyms a lot is lost. That is why we think it is time to go back to the source, and explore exactly what makes SMART goals smart.

We looked at what goal science has to say about the S-M-A-R and T. SMART is still very important, but it might not be for the reasons you've been told.

S is for Specific

The reasoning behind setting “specific” goals is that we perform better when we know what to do. Think about your to do list. Which are the items that get done quickly and which are the ones that seem to stay on your list forever? If you are like me, something like “Buy a dozen eggs” will get done quickly while “Buy a chicken” might stay on my list for weeks. I have lots of experience buying eggs and can get right on it without much thought. I have never bought a chicken and having lived in the city most of my life I’m clueless about where to start.

There have been several studies that prove this. One study, out of Stanford, created two versions of a reward card for a frozen yogurt shop. The first version offered 1 free yogurt after purchasing any six flavors of yogurt in any order. The second version required ordering banana, apple, strawberry, orange, mango, and then grape in that order to receive the free cup.

The customers given the more specific version of the rewards card were 75% more likely to return to the store 6 times, complete the card and get their free cup of yogurt.

Professors Edwin Locke and Gary Latham have also written about this phenomenon. They found that as we move further outside our own area of expertise we have to engage in more and more problem solving to understand how to approach a goal. This can have negative consequences on our ability to stay motivated and complete our goals quickly.

It is a logical idea. If buying eggs is my goal I can move right to completing it. However if I am tasked with buying a chicken I will first have to engage in some problem solving, starting with my very minimal knowledge of chickens and expanding on that knowledge until I know enough to complete the task. This second process involves a lot discovery and does not always happen in a predictable way. The less I know about chickens at the start the longer and more unpredictable the process of buying a chicken will be.

You might have already noticed that buying an egg and buying a chicken are equally specific sentences. Which I did to make the point that just because you give someone a goal that sounds specific does not mean you are living up to the reasoning behind SMART goals. Specific goals should have a clear path to success for the person receiving the goal. If you’ve ever worked with a young intern, you know that specific goals mean different things to different people. For the lowly intern even getting a cup of coffee requires tremendous problem solving.

Lets return to the frozen yogurt example for a moment. There is something I didn’t tell you. The researchers also measured how many people wanted to take part in the rewards program. They presented one of the two versions and asked if the customer would like the rewards card.

Customers presented with the more flexible version (any yogurt in any order) signed up two and a half times more often than customers presented the very specific version!

We are great at completing specific goals, but we want flexible goals. This leaves us with a conflict. On the one hand employees are more likely to want to take on flexible goals that give them autonomy and let them do a little learning and problem solving. On the other hand employees will be most successful with a specific set of goals that requires no thinking, just rote action.

As a manager then we must balance these two forces. Generally goals that push employees slightly beyond their existing skill set, so that their skill set can still be applied to solving the new problem will be both quickly achieved and stimulating for the employee.

Another approach is to ask yourself, am I trying to get buy-in on a new goal or am I trying to get a difficult goal completed? If you want your team to embrace an easy but unpopular goal, consider making it a little less specific and a little more flexible so the team can embrace it and make it their own. If you already have lots of support but the goal is very difficult, consider being very specific so the team can apply their energy to exactly what needs to be done.

All that boiled was down to an "S." Before reading this you might have been forgiven for wondering why your intern still hasn't bought you a chicken.

In summary, the S in S.M.A.R.T. stands for - 

  1. Make sure the person receiving the goal can see a clear path to success
  2. And don't make the goal so rigid that your employee feels like a soulless automaton 

M is for Measurable

A measurable goal includes a metric or metrics that can be tracked so those involved know when the goal has been achieved. Many of us are guilty of setting goals that can’t be measured. For example maybe you have wanted to “be healthier.” Without metrics to quantify that goal it will be very difficult to know how much progress you are making or when you finally achieve "healthier." The unmeasurable goal is also an unclear goal, healthier could mean weighing less, but it could also mean running more.

When we make goals more measurable we also make them more motivating. From the last example, we might decide to throw out our goal to be healthier and replace it with a goal to complete a 5k race in under 30 minutes. This new measurable goal allows us to calculate exactly how much time we need to improve, and there is no ambiguity around if or when we achieve it. In fact there will be a triumphant moment when we cross a literal finish line.

The value of measurable goals is well understood, and Measurable is probably the most popular of the five characteristics of a SMART goal. So rather than convince you to make your goals more measurable, let me make the case that maybe your goals are already too measurable.

George Doran coined the acronym S.M.A.R.T. back in November of 1981, and in his original definition Doran is far less insistent on measurability than many of us are today. Doran said, “Notice these criteria don’t say that all objectives must be quantified...managers can lose the benefit of more abstract objectives in order to gain quantification.”

"Blasphemy!" I hear you say. But Doran is not the only one.

Drs. Edwin Locke and Gary Latham are the grandfathers of the study of modern goal-setting. These two scientists do not even include measurability in their 5 Goal Setting Principles. Instead measurability is discussed only as a way to give your goals more Clarity. For Locke and Latham measurability was important only as much as it made goals more clear, because clear goals are more motivating than ambiguous goals.

Now you might be thinking that Doran, Locke and Latham are luddites from another time. A time before big data, sensors, and tracking everything. Modern companies like Intel, Google, Uber and Twitter only care about things that are totally measurable.

Well lucky for us we know how Intel, Google, Uber and Twitter set goals. They all use a popular framework called OKRs. OKR stands for Objective and Key Results. The objective is a qualitative goal (ie not easily measurable) and the key results are several metrics that will be used to determine if the qualitative goal was achieved. Notice how the squishy unmeasurable goal come first in their framework.

The thing that Doran, Locke, Latham, Intel, Google, Uber and Twitter all have in common is that they don’t choose goals based on measurability. They set the goals that are most important for their companies first then they figure out the best way to measure them.

It is important to separate the goal and how we measure it because when we focus just on hitting certain metrics it can create perverse incentives. For example, maybe as a way to run that 5k race in under 30 minutes we drink a ton of caffeine and take a dangerous supplement. Sure we beat hit our metric, but we definitely did not achieve the original spirit of the goal which was to be healthier.

So by all means keep making your SMART goals measurable, just don’t compromise on what matters just so you have an easier time measuring. The OKR framework is helpful here. Set your goals first and let them be unencumbered by how easy or hard they are to measure. Then figure out how to make them measurable.

A is for Achievable

Oh “Achievable.” How did you get such a prominent position in the most well known framework for creating effective goals?

George Doran’s original SMART had “Assignable” as the A... but he did use “Realistic” for the R. Today the most common SMART acronym uses “Achievable.” But still, whether it is “Realistic” or “Achievable” how is this one of the 5 most important characteristics of an effective goal?

Can you imagine the conversation a rocket scientist who recently read Doran might have had with President Kennedy in the Fall of 1962?

Rocket Scientist: Mr. President I don’t feel like putting a man on the moon in this decade is realistic. What about a more achievable goal like sending a little robot up there?

President Kennedy: We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills.

The president knows what he’s talking about, and he’s backed up by the scientific research. In fact almost all goal research says that goals should be difficult or challenging in order to improve employee performance. “We choose to go to the Moon and do the other things...because they are hard.”

Unfortunately, SMART doesn't say anything about making our goals difficult. “Brush your teeth on the first Tuesday of every month,” is technically a SMART goal. However, since most of us are setting goals with the purpose of improving performance it seems like a strange omission.

For that reason I think it is important that we bring some nuance to the A in SMART so our goals will be better aligned with the scientific research.

For that lets turn to the work of the famous goal researchers Locke and Latham. They considered the idea of achievable goals, but only in the context of setting challenging goals.

One of the duo's most fundamental findings over their entire career was that, “the more difficult the goal, the greater the achievement.” This finding held true even when the goal was impossible.

But impossible is the opposite of achievable, what is going on here?

Locke and Latham explain it like this, difficult goals drive higher and higher performance as long as a person remains committed to those goals. For a person to be committed to a goal they must 1) believe the goal is worthwhile (we’ll cover this in the next post) and 2) believe the goal is achievable. Finally the word “achievable” in a scientific paper.

What Locke and Latham are saying is that when we set goals they should be the most difficult goal that our employees will believe is achievable, and therefore stay committed to. So yes, our goals should be achievable in the eyes of our employees, but our goals must first be challenging or they will not drive improvements in performance.

When Kennedy is giving his famous Moon Speech he is not interested in compromising on his audacious goal, he is trying to make the country believe in it, believe that it is achievable to go to the moon. Rather than making the goal easier, he is increasing the belief of his people.

Practically what this means is that when we look at the A in SMART it shouldn't make us want to set easier goals. Instead it should remind us to set the most difficult goals that we can then convince our employees are achievable. The A in SMART should really stand for “An almost impossible goal that your employees will believe is achievable.”

Subscribe to our blog to get our next post about the R in SMART - Relevant. We'll dive deeper into the idea of keeping employees committed to goals.

R is for Relevant

Remember Algebra homework? Or maybe your kid’s algebra homework?

When I think back to those days, there is one exasperated question that always comes to mind…

“But when am I ever going to use this stuff again?”

If you think for a moment about how you would answer that question from your teenage self or teenage child, you might just already understand the importance of the next component of SMART goals.

R is for Relevant, and it is the second “commitment modifier” we've talked about. Think of commitment modifiers this way…

You start a new project and you’re totally gung-ho, then things starts to get hard and the little voice inside your head says, “this is impossible” or “this is stupid.” That little voice is reducing your commitment to the goal because it isn’t achievable (impossible) or isn’t relevant (stupid).

The goal researchers Locke and Latham say "When goals are easy or vague, it is easy to get commitment, because it does not require much dedication to reach easy goals. When goals are specific and hard, the higher the commitment the better the performance."

So once we've crafted a difficult and specific goal the job is not over, we have to continuously maintain commitment to it if we want to keep performance high.

Back to the algebra homework, when the little voice inside our head was telling us that algebra is stupid. At this point a good leader, maybe a parent or a teacher, can help bring relevance to the goal by showing us why it matters. For example, “If you want to be an architect (or something else we feel is important) you’ll need to know algebra.” Or “You’re right, as a NFL player you might never use Algebra, but if you want to play in college you’re going to need to get good grades.”

One of the most important things to remember when creating goals for your team is that relevance is not intrinsic to the goal itself. People can find different relevance for the same goal.

Completing an algebra assignment could be relevant for one child because understanding and improving in math is important in its own right, while the same assignment for another student might only get completed because they seek the approval of their parents, and a third student may only do it because they’ve been threatened with expulsion if their grades don’t improve.

One of the most common mistakes managers and business leaders make when setting goals is thinking that a good goal is crafted on the page. They think, let me Google “writing good goals” and then take an hour to scribble down the team’s goals. What you can't write down is the relevance to each team member. The relevance the goal has for you is probably obvious -

“If we increase our Q4 numbers 10% I will look amazing to the boss and I will be in a good position for that promotion I want.”

But you have to remember that those things might not be relevant for everyone on your team. The algebra teacher might assign the night’s homework because “my students need more practice before they are ready for next week’s lesson.”

Meanwhile the students are doing the assignment for totally different reasons, or maybe they don’t have a good reason and aren’t doing the assignment because “it’s stupid.”

So while you might set the same goal for every person on the sales team, you may need to use several different techniques to create relevance.

Something I often hear is “because I said so," that should be relevance enough. That is true to a point, although over time your team’s commitment will start to slip if they don’t have more.

Our favorite goal researchers have a lot to say about this. From Motivation Through Conscious Goal Setting, “There are many ways to convince a person that a goal is important. In work situations, the supervisor or leader can use legitimate authority to get initial commitment. Continued commitment might require additional incentives such as supportiveness, recognition, and rewards.”

So get out there and spend a few moments with each member of your team, talk about the goals you set and help each of them find the relevance they need to succeed long term. Some will be motivated by the success of the company, others by personal power and riches, and a few may just want to avoid getting fired. Whatever it is everyone needs their own relevance or the positive impacts of your well crafted goals will quickly start to fade.

T is for Time Constrained

Time if the fourth dimension, it is a fundamental part of...of just everything. Everything you do happens over the course of time, so to set a goal and not talk about time is just crazy. Time is so fundamental to goals that you’d think we wouldn’t have to talk about it, but we do and we will.

A time-constraint is just a deadline. It could be one deadline, or it could be a recurring deadline. Maybe you don’t want to just complete 1 blog post, but you want to complete 1 every week.

Deadlines get their own letter in SMART, but in the science of goal setting deadlines are important for their impact on two other characteristics of effective goals, Clarity and Difficulty.

Setting clear goals helps us to focus our energy and motivation towards action. If a goal is unclear it can be very disorienting. Imagine you set a goal for yourself to complete a painting and sell it. On it’s surface that is a very clear goal, but if you don’t set a deadline all of a sudden the possibilities become endless. Should you practice for 1 month or 6 months before starting the painting you'll try to sell, how often should you practice, how good should the painting be before you try to sell it.

This is the type of ambiguity that tanks goals. As you start to work towards your goal, things will become difficult, your paintings won't be as good as you expected them to be and the ambiguity in your goal will become the room you need to start making excuses. "I'm still going to sell a painting, I just need more time to practice." "I'm still going to sell a painting, I just only have once-a-week to paint these days." The less ambiguity there is in a goal the less places there are for us to get lost in our pursuit.

If we imagine that our goal had been to sell a painting in 3 months, we can see how that would bring clarity and help us formulate a plan. We'd be able to start working backwards from that date and determining just exactly what we need to do to accomplish our goal. Eventually 3 months would come around and we would either succeed or fail, but either way we'd be futher ahead than if we hadn't set a deadline.

Everything you do is going to take place over time and so any goal you set needs a deadline to have clarity.

The other important aspect of deadlines is their impact on goal difficulty. Locke and Latham talk extensively about the power of difficult goals to increase output. It makes sense, if you think a goal is easy, you’re probably not going to work that hard to achieve it. If it seems really hard, but still achievable and worth doing, you’re going to give it everything you’ve got.

Time can act as a way to increase the difficulty of any goal. Think about it, almost all of us will cover 1 mile on our feet over the course of the next few days, but some people devote their entire lives to covering that same distance in under 4 minutes. It is something that all of us can do, but only becomes a motivating and difficult goal when we put a time constraint on it.

The easiest tasks benefit most from tight deadlines. This is because an easy goal can be made difficult with a deadline and therefore drive high performance. If you ask me to run a mile in the next week then I might not make any progress until the last few minutes of the last day of the week. If you tell me to accomplish the same goal in the next hour, I'm immediately kicked into gear and thinking about getting a change of clothes and some better shoes. If you tell me to cover a mile in the next 10 minutes I'm headed out the door now and I'll just endure the blisters and chaffing. The same goal with three different deadlines and therefore three levels of difficulty, drives three different amounts of effort.

The next time you set a goal don't forget time, it is inescapable.

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Employee Check-ins vs Employee Reviews

If you’re heard the word “check-ins” talked about in performance management circles, you’ve likely had one of two reactions: what’s the big deal? It’s just another method of performance reviews, right?

Or, maybe, the Adobe innovation piqued your interest and you’re wondering whether to ditch your annual performance reviews like other companies have. Whatever you do, don’t allow the semi-sensationalized nature of employee check-ins to influence your perception of them. You may find that they’re not such a dramatic innovation after all--maybe they’re simply another method of measuring employee performance.

This article will help to better define the buzzword that is “check-ins” and maybe help you to analyze whether they are right--or wrong--for your employee performance conversations.

Similar to performance reviews

In many ways, employee check-ins are not so different from traditional performance reviews. The main priority in both remains the same--to conduct effective one-on-one meetings with employees to discuss progress, goals, and share feedback.

The most significant difference is the frequency in which the meetings occur. The idea behind check-ins is to foster a more informal, ongoing dialogue between employees and their managers. Some companies schedule mandated check-ins every month, while others schedule them as needed, or after completing major projects. Regardless of their specific schedule, the main purpose is to keep the lines of communication between employees and managers open so as to engage and manage employee performance more readily.

Adobe introduced the concept of employee check-ins in 2012 as a means of doing away with traditional performance reviews. As Adobe realized, and as many other companies have discovered, the annual performance review format tends to get bogged down by paperwork, bureaucracy, and unnecessary complexity. It can also lead to employees feeling limited by ranking and undervalued for performance.

Check-ins were brought into play as a means of catalyzing change in the standard performance review format, and to help employees feel more engaged and empowered.

How check-ins differ from performance reviews

The purpose of check-ins is to ensure that employees are given the opportunity to understand their expectations, share feedback, and discuss the development that is needed to enhance their performance.

Much of the appeal for companies that have switched to check-ins is the informal nature of them. Instead of being scripted, check-ins can remain relatively casual for both employees and management. The idea is that more frequent, less formal communication will allow employees and managers to work better together in accomplishing goals, sharing feedback, and developing skills.

While check-ins can be held with a more casual approach, it’s important that managers are still able to keep a loose structure intact in order to make the most of employee conversations. Employees should walk away from each check-in feeling inspired and driven to action, having established clear goals and discussed pointed areas of development.

The benefit of holding more frequent check-ins is that managers have a better idea of what an employee is working on in that moment. Instead of providing vague references to the employee’s overall performance from an extended length of time, managers can point to specific projects, goals, or coaching points to hone in on during each meeting.

It’s also important to note that feedback shouldn’t be restricted to just check-ins or formal reviews--feedback should be given throughout the year, so that these discussions can focus on goal-setting under the assumption that the employee already has ideas of ways to improve.

Beware of micromanagement

To the manager, more frequent, informal check-ins can certainly seem like a solution to the problems presented by annual or traditional performance reviews. But check-ins aren’t without their pitfalls.

In the case of traditional performance reviews, employees often reported feeling left in the dark regarding their performance rating until the annual or quarterly meeting, which would often leave them even more confused and unmotivated. Holding less frequent reviews runs the risk of employees losing vision of their goals, and then being overwhelmed with feedback to the point that they walk away discouraged and criticized.

However, the opposite can become true of check-ins--instead of being left in the dark, check-ins create many opportunities for an employee to feel micromanaged. A Harvard Business Review article distinguishes the importance of “checking in” with an employee rather than “checking up” on them--in other words, establishing clear, meaningful goals while also giving them the autonomy to meet those goals.

If you’re considering check-ins

We’ve said it before, and we’ll say it again: Doing what’s right for your organization and your employees is key.

It’s not a bad thing to hold less frequent check-ins, especially if you believe in the success and capability of your employees. In many organizations, typically ones that are smaller, managers have found that checking in with employees is less needed when they are able to give employees clear strategic goals. This develops a sense of ownership in the work, and in turn, creates a nearly autonomous workforce that fosters healthy collaboration in management and employees.

In larger companies, however, frequent check-ins play a valuable role in making an employee feel heard, seen, and set up for success in achieving company goals. The increased communication fosters employee engagement, and, in the long run, can help your organization retain employees. Employee check-ins can also be used as a valuable way to measure a new hire’s experience.

Most importantly, managers should seek to establish a regular cadence of check-ins or performance reviews (no matter how frequent) that fits the needs of their organizational needs.

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What are Behaviorally Anchored Rating Scales (BARS)?

Behaviorally Anchored Rating Scales, also known as BARS, are a type of performance management scale that use behavior “statements” as a reference point instead of generic descriptors commonly found on traditional rating scales. Designed to add the benefits of both qualitative and quantitative information to the appraisal process, BARS measures an employee’s performance against specific examples of behavior that are given a number rating for the purpose of collecting data.

Establishing specific behaviors for grading, are meant to give the rating a higher degree of accuracy relative to performance. This is because you’re relying on unique, individual behaviors required for each individual position within an organization, instead of behaviors that can be evaluated in any position across the board. It is presumed that using a rating scale with specific behaviors for selected jobs, minimizes the subjectivity in using basic ratings scales. We’ll take a closer look at this later to see if it’s true.

For now, let us consider some examples of what BARS might look like.


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The job being appraised belongs to a customer service representative:

  • A level four rating might assume the rep “answers the phone after 1 to 2 rings with a friendly greeting.”
  • A level six rating might assume the rep “answers phone after 1 ring with the correct company greeting.”

A traditional rating scale would ask if the employee “answers phone promptly/courteously” and list the number ratings as “1-never, 2-not often, 3-sometimes, 4-usually, 5-always”. It is clear to see there will be a difference in the outcome of the appraisal with the more definitive BARS method.

The job being appraised belongs to a nurse:

  • A level four rating might assume the nurse “shows sympathy to patients.”
  • A level six rating might assume the nurse “shows higher levels of empathy in all dealings with the patient and their family.''

The job being appraised belongs to a waiter.

  • A level 2 rating might assume the waiter “talks on phone while taking orders.”
  • A level 4 rating might assume the waiter “makes eye contact with customers during every transaction.”
  • A level 6 rating might assume the waiter “greets customers cheerfully and makes suggestions from the menu based on their preferences.”

What are the Pros and Cons?

While these examples are great at offering an insight to the effectiveness of the BARS method, not everything about Behaviorally Anchored Rating Scales is perfect. There are several benefits to making the switch but also some downsides one should examine first.

The benefits of using the BARS approach include:

  1. It is easy to use. The standards upon which the employee is being appraised are significantly clear which makes the entire process much less confusing.
  2. It is based on behavior. The ultimate goal of employee appraisals is to improve performance. Having a better understanding of the behaviors and what leads to them, allows the company an added perspective to what works and what doesn’t.
  3. It is impartial. Because BARS is heavily focused on behavior, the evaluation process seemingly has more fairness to it.
  4. It is completely individualized. BARS creates the ability to design a unique performance management experience for every position within an organization.

The downsides of using the BARS approach include:

  1. It is a time-consuming process. As great as it sounds to design the unique experience for each position, an organization with many different roles would have to invest an enormous amount of time and resources to get it done.
  2. It can be expensive. Time is money. For smaller organizations with multiple roles, this may not be feasible to accomplish in the short run.
  3. It demands a management team that is highly devoted/motivated. All of the statements and anchors used on the appraisal need to be developed. It is demanding and managers would have to be highly involved.
  4. It can be accused of leniency bias. BARS directly removes the opportunity for an evaluation to be biased, however, it doesn’t remove them all. Some believe there is still room for the leniency error.

Who is it best for?

After taking a closer look at the pros and cons of using Behaviorally Anchored Rating Scales, one can expect that the method is best used by larger companies financially capable of pursuing the project. However, realizing that major manager input is mandatory, the company also needs to have understandable time and commitment expectations.

It would be ideal if the company did not have a large number of different positions but rather, groups of positions or departments made up of similar types of jobs. Being that this approach is still a measuring system used for rating employees, another suitable use for BARS is when you encounter bias challenges in the current performance management process.

It’s emphasis on behavior produces objective ratings difficult to distort.

How to set yourself up for success?

If you want to include BARS in your performance management plan, it is highly recommended that you start by diligently researching the approach. Be prepared with a full understanding so that you can execute the method properly for your own organization. Also be sure to have a team onboard. As previously mentioned, managers will need to be greatly involved. The following steps will assist in developing the final product:

  1. Collect examples of adequate and inadequate behavior related to jobs. Some use the Critical Incident Technique.
  2. Convert data into performance dimensions using examples of behavior.
  3. Ask your team of subject matter experts (SMEs) to translate into their own performance dimensions.
  4. Give the remaining behaviors a scale, usually a 5 to 9 point one.
  5. Discard the higher deviated standards to ensure SME agreement on behavior ratings.
  6. Develop the final scale accordingly.
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5 Modern Alternatives to Annual Performance Reviews

The business world is becoming faster, more efficient and more innovative. In coordination with these changes, many HR professionals are evaluating classic annual reviews to see if there is a better way to do things. Let’s take a closer look at some of the modern performance management alternatives that are often discussed.


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One-on-ones are an informal opportunity for managers and employees to regularly meet face to face.


  • Demonstrate interest in the employee. Quite simply, one-on-one check-ins let the employee know that they matter to the manager. These can help build an employee/leader relationship.
  • Act as an early warning. These informal meetings can help identify struggles or issues early on.
  • Opportunity to listen. Many people are looking for an opportunity to be listened to, and these one-on-ones provide a chance for employees to tell their story.


  • Easy to postpone. It can seem simple to postpone or cancel these one-on-one meetings. If this becomes a regular habit, it can send a message to the employee that their role or work isn’t as important.
  • Time-consuming. These meetings can be hard to manage if a manager has multiple direct reports.
  • Hard to measure. These meetings often don't have a formal reporting structure to help capture an employee's progress against goals throughout the year.

Quarterly Check-Ins

As the name suggests, these mini-performance evaluations happen with an employee four times a year. These can be formal or informal meetings to discuss performance from the last quarter.


  • More interaction with employees. Meeting an employee at least four times a year provides an opportunity to deepen the leader/employee relationship.
  • Timely feedback. Instead of asking an employee to keep a yearly scorecard, managers can provide feedback as things happen. This allows an employee to act on recommendations immediately.
  • Reduce admin load. Managers can pull together information from these conversations to perform annual performance reviews.


  • Manager commitment. If a manager has many direct reports, this meeting frequency can become a burden.
  • Lack of long-term focus. When you are reviewing progress on a shorter-term basis, it can be hard to focus on the big picture.

Project-Based Reviews

Project-based reviews are distinct from other types of reviews because they focus on the last project an employee completed. Project-based reviews combine feedback from project managers and others from different teams who also worked on the project.


  • Goals are clearly defined. Project-based work tends to have very clear objectives, scope, and deliverables. This can help guide reviews.
  • Timely, relevant feedback. Managers and employees can discuss relevant feedback from others who worked on the project while the work is still fresh in everyone’s mind.
  • Meaningful performance records. Project-based reviews can quickly surface patterns of excellence or signs of trouble in an employee.


  • Not a one-size-fits-all solution. Projects can be too big or too small for this to work. Daily or weekly project reviews would quickly become overwhelming, and multi-year projects could leave employees with very infrequent reviews.
  • Time-consuming. Since input needs to be gathered from a variety of sources beyond the direct manager, this style of feedback can be time-consuming for both the manager as well as peers and project leaders.

Goals and Goal Check-ins

These meetings focus the discussion on creating and measuring performance and progress of an employee’s SMART goals. It typically doesn't involve a formal analysis but could be documented.


  • Provides timely feedback. This helps keep employees engaged with and thinking about their goals throughout the year. It also provides an opportunity for discussions when things are not going well.
  • Goal tracking. This also allows managers to track an employee’s activities related to goals and objectives.


  • Can be too focused. If employees and managers are only discussing goals, there may be other successes or challenges that are not being discussed.
  • Overly impersonal. Discussions about goals and progress against goals can be very impersonal. These meetings don't often contribute to building a strong employee/manager relationship.

Continuous Feedback

In a nutshell, continuous feedback includes any assessment that happens on a regular basis. These can be formal or informal meetings.


  • Provide immediate evaluation. These meetings help address issues and celebrate successes as they happen.
  • Summary of objectives. Employees are reminded of their responsibilities and overall objectives and can be sure that they are on the right path for success.


  • Hard to see the big picture. When you are meeting on a regular basis, it can be harder to identify the milestones in measurable goals.
  • Keeping a consistent schedule. Continuous performance reviews can only be successful if they are indeed continuous.

Organizations have many performance management options. The best process for your organization may actually bring together elements of several of the processes described above. The bottom line is that any employee performance review process needs to accurately reflect performance and ultimately be effective.

Ready to learn more about creating a modern performance management system? Check out our guide.

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What is the Essay Method for Performance Appraisals?

While some would label it as the “grandfather” of performance appraisal methods, the essay method is still a commonly used appraisal method in a variety of business models. The essay method, sometimes known as the “free-form method,” is a performance review system where a superior creates a written review of the employee’s performance.

These essays are meant to describe and record an employee’s strengths and weaknesses in job performance, identifying problem areas and creating a plan of action to remedy them. Whether the essay is written by the appraiser alone, or in collaboration with the appraisee, essays provide supervisors the opportunity to assess behaviors and performance with greater complexity and attention to detail.

There are many reasons that the essay method--which was one of the first methods used to evaluate performance--is still effective today.


One of the most noteworthy aspects of essay appraisals is their free-form approach to performance reviews. Whereas some employers can feel limited by rigid performance appraisal criteria, the essay method takes a far less structured stance than typical rating scale methods. In so doing, the appraiser is able to examine any relevant issue or attribute of performance that is pertinent to an employee’s job description or overall company growth.

The essay method assumes that not all employee traits and behaviors can be neatly analyzed, dissected, and rated--instead, it allows appraisers to place varied degrees of emphasis on certain qualities, issues, or attributes that are appropriate. Rather than being locked into a fixed system, this open-ended method gives supervisors the freedom of expression and critical thought.

When preparing an essay, a supervisor may consider any of the following factors of an employee as they relate to the company and employee relationship: potential and job knowledge, understanding of the company’s policies, relationships with peers and supervisors, planning and organization, and general attitudes and perceptions. This thorough, non-quantitative assessment provides a good deal more information about an employee than most other performance appraisal techniques.

However, as with all performance appraisal methods, there are a few limitations that the essay method suffers from that are worth examining.


One of the major drawbacks of the essay method is its highly subjective nature--they are often subject to bias, and it can be difficult to separate the assessment of the employee from the bias of the evaluator. While the essay can provide a good deal of information about the employee, it tends to tell more about the evaluator than the one being evaluated.

Another element that essays leave out (that other appraisal methods rely heavily on) is comparative results. Instead of utilizing standardized, numeric questions, these appraisals rely only on open-ended questions. While the essay method gives managers the ability to provide detailed and circumstantial information on a specific employee’s performance, it removes the component of comparing performance with other employees. This often makes it difficult for HR to distinguish top performers.

Overall, the appraisal method’s greatest advantage--the freedom of expression for the evaluator--can also serve as its greatest handicap. Even the actual writing of the reviews can upset or distort the process of employee appraisals, as the introduction of inconsistent, unorganized, or poor writing styles can distort and upset the review process. An employee may be unfairly helped or harmed by an evaluator’s writing ability. An evaluator can also find themselves lacking sufficient time to prepare the essay, and can write an essay hurriedly without accurately assessing an employee’s performance.

What is the essay method best used for?

Appraisal by essay is generally most effective in performance reviews for employees with atypical job descriptions or non-numerical goals. While other appraisals work well in analyzing performance for jobs that are subject to goals based on numbers, essays offer a more subjective analysis of performance for employees with managerial or customer service positions.

When analyzing production, the essay method is most effective in combination with another appraisal method. Using a graphic rating scale along with essay appraisals allows one method to focus solely on numbers, while the essay portion can be used to analyze other performance goals.

Doing essay appraisals right

Here are 3 things to strive for in order to set your company up for success in essay performance appraisals:

  1. Consistency.

Keeping a standard for style and length of essay appraisals can make the biggest difference in ensuring that your reviews are effective. Essays that are unstructured and unnecessarily complex can be detrimental to an employee’s rating, as well as using unspecific, flowery language that is not relevant to the employee’s performance. In order to remain efficient and effective, today’s evaluators should focus on making appraisal essays short and specific, ensuring that the entire review reflects the performance of the employee.

The appraiser should also ensure that they are making sufficient time in their schedule to prepare the essay. A busy evaluator may compromise an employee’s performance rating by writing a hurried essay, or running out of time to thoroughly assess employee performance. It’s important for all participants of essay appraisals to take enough time to write a consistent, accurate, and succinct review in order to set employees up for success.

2. Proficiency.

If you’ve chosen to use essay appraisals in your organization, it’s important to ensure that your appraisers possess the ability to write well. Even if an essay contains detailed, circumstantial information, it becomes difficult to extract valuable data from a poorly written essay. To ensure that nothing stands between an HR professional’s ability to assess an employee’s performance, evaluators should be trained as well-equipped writers.

Giving writing assistant tools or tips to supervisors can make all the difference in the accuracy and efficiency of an employee’s performance review.

2. Objectivity.

Subjectivity is both a strength and a weakness in essay appraisals. Not only are essays themselves often biased, but the misinterpretation of essays can even further distance the main evaluator from an accurate portrayal of an employee’s performance. Including objective standards in a performance review results in a more balanced and productive review process, and helps to eliminate the forming of incorrect conclusions about an employee’s behavior and performance.

Organizations often implement this goal by pairing essay appraisals with another appraisal method, such as graphic scale ratings, to draw more accurate conclusions and performance data. In so doing, evaluators can utilize all of the free expression and open-ended characteristics of an essay appraisal, while still maintaining accurate, easily translated results that are effective for the overall organization.

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3 Approaches to Performance Management: Google, Betterment and IBM

Some of the biggest names in technology and finance are not just making headlines for innovative advancement in their industries. Believe it or not, these companies also have unique approaches to performance management leading the way. Systems created by them for discovering great managers are becoming a trend and technology developed for their employee review purposes are grabbing everyone’s attention. Thriving in their performance management goals, one thing these three companies have in common is they saw a need for modification, and set out to reinvent the way they manage employee performance. The results have kept their employees happy while saving their businesses time and money.


Google is an American multinational technology company that specializes in Internet-related services and products. They have what some might say is the world’s most progressive human resource organization. Google calls it “People Operations Practice” and they focus on three main purposes:

  1. Select and hire only the best fit candidates
  2. Build a merit based reward/incentive system
  3. Developing employees to their fullest potential, through coaching, outside training, and through a 360-degree crowdsourced feedback program

Taking a further dive into the way they implement these purposes, we find out that Google has a combination of some traditional HR practices with a new twist. This summary breaks down the performance management process Google is well known for:

  • Annual performance review with a mid-year checkpoint
  • Monthly performance check-ins that address career development, coaching, personal issues, etc.
  • “Googlegeist engagement survey” (measures a vast expandment of topics)
  • Annual “Upward Feedback Survey”, similar to 360-degree review where only supervisors are reviewed by their direct reports
  • A mildly different form of Management-by-Objectives called OKRs (objectives and key-results)
  • “Meritocracy”: compensating people unequally through bonuses, equity stock option grants, and prizes.


Betterment is an online investment company known for using technology to yield returns. They do not get paid for certain funds or have any of their own, which gives them their customer centric style. Through the years, Betterment’s HR approach has emphasized a performance management philosophy of constant iteration. Jon Stein, Betterment’s CEO and founder, says the best system is one that changes easily just as your company grows and changes also. What he has learned from several trial and errors can be summed up into a final version of Betterment’s Performance Management System including:

  • Betterment added key performance indicators:
  • This move was meant for overall business performance rather than singular, distinct targets. An example they’ve mentioned is tracking referrals as a key performance indicator to make sure they're headed in the right direction, instead of setting a quota that had to be met.
  • They developed a new tier of leadership to facilitate more cross-team partnerships:
  • This is a great example of a fast-growing company revising its performance management to cope, as well as communicate the need for organizational change.
  • They called this new management level "pillar leads" that work on cross-functional projects as a unified group.
  • They made reporting simpler and more visible for all:
  • While every team has a “dashboard”, it is rare for them to instinctively collaborate or deviate from their own personal objectives. The need for more push metrics arose but Betterment wanted to broadcast in a way that was clear, allowing teams to see each other’s progress toward company goals. For instance, they send and email regularly to everyone highlighting current numbers and team metrics as well as posting them up on walls for public viewing. This has also created a common impression that “all hands on deck” to get fellow employees where they need to go.


IBM is an American multinational information technology company, that recently changed it’s 10 year old performance review system for a brand new approach that shifts employee goals throughout the year and involves much more feedback. This change came about because IBM’s chief HR officer noted employees were already doing work differently. The former system, quite similar to many traditional annual reviews, asked employees to set their goals for the year in January. After a mid-year check-in with management, they’d receive a final assessment and a single performance score in December of that same year. According to Diane Gherson, employees entered a variety of situations throughout the year, which meant oftentimes they weren’t even working towards those original objectives. So managers ended up in “irrelevant discussion” during the annual evaluation trying to determine whether the 11 month old goals were fulfilled. What they ended up with was an effort of crowdsourcing ideas from 380,000 employees across 170 countries.

They eliminated some unexpected ideas:

  • Self-assessments; the majority of employees didn’t feel it was helpful
  • Relative performance rankings; managers would no longer meet with each other to compare employees, rather, the employees wanted more frequent, direct feedback.

The result was an app-based performance review system, they named “Checkpoint”. With Checkpoint, IBM employees will have a performance management program that addresses several key objectives:

  • Setting shorter-term goals
  • Management feedback on employee progress every quarter (or less)
  • Employees will be judged across five criteria in which managers will assess whether they’ve “exceeded” or “achieved expectations” in these dimensions (or if improvement is needed): 1. business results, 2. impact on client success, 3. innovation, 4. personal responsibility to others, 5. skills.

Kudos to IBM for creating an app! There is now no single measure of an employee’s performance like in the old system. Before there was only one score but now there are five. This makes for a much more dynamic and balanced discussion.

Google, Betterment, and IBM remained flexible in their approach to HR practices. As a result, their creativity led them to redesign performance management systems that just weren’t effective anymore. In all likelihood, these practical examples of companies managing performance in their own way prove one size doesn’t fit all but there are certainly great models to glean from.

More Inspiration

These organizations are not the only ones going their 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 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

How Does Amazon 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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The Benefits of Project Based Reviews

Project based work is more popular than ever. With the rise of outsourcing there are more agencies and firms engaging with companies on discrete projects. So how does Human Resources keep track of employee performance when the conventional annual or quarterly check-ins don’t match the natural cycle of an employee’s work?

Enter the project based review. A natural mix of performance management and project management.

Project based reviews are distinct from other types of reviews because they focus on just the last project an employee completed. This allows the questions to be more directly relevant to the work, and it also allows the employee and the whole team to be judged against the objective goals set out for the project.

So in addition to more typical questions like how well the employee works with her teammates, you can also ask questions like did the employee deliver her part of the project on budget and on time.

Here are some more benefits to using project based reviews-

Benefits of Project Based Reviews

  • Goals are clearly defined - Because project based work tends to have very clear objectives, scope, deliverables, etc, it is much easier to have objective criteria in project based reviews.
  • Feedback is closely tied to work - The immediacy and limited scope of project based reviews tends to eliminate many of the idiosyncratic rater effects found in other types of reviews.
  • Fast Feedback cycles - Project based reviews match the cadence of the feedback to the cadence of the work perfectly. Employees have the opportunity to receive and internalize feedback before getting into the next project where they can demonstrate any improvements.
  • Meaningful performance records - The frequency and relevancy of the feedback creates a very meaningful performance record for each employee. With annual reviews, if an employee gets a bad rating one year, it can be hard to know how much to read into that. Was the whole year really that bad? Project based reviews quickly surface patterns of excellence or lack thereof.

Who Should Use Them

  • Organizations that work on discrete projects - The is obvious, but don’t try to force project based reviews if your teams are not already working on very clear and discrete projects. It also matters that the projects are a bit different each time. If the employees are doing identical work on projects throughout the year, the project cadence is less meaningful.
  • Established project management practices - The benefits of project based reviews are most pronounced when your teams already have a quality project management process in place. If your teams are just winging it on projects then you won’t get the benefit of objective criteria when reviewing a project.
  • Projects that aren’t too short or too long - The administrative burden of reviews for daily or weekly projects will quickly become overwhelming. On the other hand, multi-year projects could leave employees with very infrequent reviews. The sweet spot can shift depending on the length of the review process and is somewhere between every few weeks and a few times a year.
  • Matrixed organizations - When teams are coming together from different functional areas to accomplish something for the organization this is a great time to look at project based reviews. Often the traditional hierarchy approach used in quarterly reviews won’t work as well for employees always working with a new team of coworkers.

Some companies are unmistakably project based such as management consulting firms or branding agencies, but many companies have elements of project based work in addition to ongoing work. In those cases it could make sense to layer a light project based review process on top of a more standard quarterly, semi-annual or annual process.

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Rating Scales for Employee Performance Reviews


Rating scales are very common in employee reviews and performance checkins. They help us quantitatively measure employee performance. 

The benefits of employee rating questions are that they allow for simpler comparisons between employees and they can speed up the appraisal process. Faster appraisals can allow organizations to solicit feedback from more people in one review.

The downside of performance rating scales is that a lot of nuance is lost in a simple three, five or seven point scale. It can be hard to boil down all of a person’s strengths and weaknesses to one number. 

The other common issue with rating scales is that they are poorly constructed. This post is designed to help you create the scales for your performance management process. We also provide a ton of examples to borrow from at the bottom.


We built PerformYard to streamline and automate any organization's unique performance management strategy.  


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Choosing the Right Rating Scales

There is literally a science to rating scales. Social scientists have been using questionnaires to collect real scientific data for many decades.

That means we don’t need to reinvent the wheel here, we should learn from our scientific colleagues.

Nominal vs Binary vs Ordinal Data

Stay with me, we should have a quick understanding of the types of data we’re collecting before diving deeper into rating scales. There are three types of data that are most often collected on employee appraisal forms - Nominal, Binary and Ordinal. Here is what they mean…

Nominal = Categories

Example: “Which of our six company values does this employee most live-up-to?”

When the answer options have no relationship to each other, in other words they aren’t ordered, or have any numeric relationship, you are asking a question that will generate nominal data. These are not technically rating scale questions, but are commonly found on review forms.

Binary = Yes or No (either or)

Example: “Is this employee ready for promotion?”

Binary data is always either or. The most common example being yes or no. Other examples are exists or doesn’t exist, is or is not, complete or incomplete. Deloitte collects binary data in 2 of the 4 questions on their review form. Google collects binary data on their upward reviews of managers.

Ordinal = Ordered List

Example: “Rate the employee for the following statements using a five point scale from Strongly Agree to Strongly Disagree”

Ordinal data is collected when we ask rating scale questions. The answers to a question will be a list of possibilities that have a clear order or ranking. As you move up the scale, options should clearly be better/more and as you move down the scale, the options are worse/less.

Numeric vs Descriptive Answers

There are two common ways to present rating scale answers, Numeric and Descriptiv. Here is what they mean…

Numeric - Just numbers (like 1-5)

Example: “Score the employee’s leadership ability between 1 and 5.” 

Numeric scales rightfully get a lot of pushback. It can be really hard for managers to understand what constitutes a 4 verse a 5 when it comes to subjective competencies like “assertiveness.” 

Descriptive - Ordered descriptions

Example: Everything from Agree to Disagree all the way to Behaviorally Anchored Rating Scales.

Descriptive rating scales include descriptions of what each step up on the scale looks like. This could be as simple as different levels of agreement or it could be as complex as a set of specific actions an employee should have taken to achieve each level.

Most Common Rating Scales - Likert vs Semantic vs Custom

Likert Scales

Likert scales are the most common scales and one we’ve all seen before. This scale measures our response to a statement, with the most common being…

Strongly Disagree - Disagree - Neither Agree nor Disagree - Agree - Strongly Agree. 

Well designed likert scales will be symmetrical, with an equal number of positive and negative responses. They will also be balanced with what feels like the same distance between each choice. 

Five choices is the most common, but any number is possible. One of the most important decisions to make is whether to give an odd or even number. An odd number of choices will mean the central option is neutral, neither positive or negative. An even number of options is sometimes called a “forced choice” does not give a neutral option and so the respondent has to pick a side.

Semantic Scales

Semantic scales are similar to likert scales but present just two extremes with unnamed options in between. For example you might ask an employee to rate a recent project between success and failure with 7 options in between.

Custom Scales

This is one of the most common choices on performance rating forms. We find that HR teams like to create their own scales to fit their needs. This is a bold move that could lead to unexpected distortions in your data. But! If you’re up for it we’ve provided many real life rating scale examples below.

Examples of Rating Scales in Action

UC Berkeley

The University of California, Berkeley human resources department currently conducts performance appraisals with a 5-level rating scale, ranging from Exceptional to Unsatisfactory. Supervisors that assign a Level 2 (Improvement Needed) or Level 1 (Unsatisfactory) rating to an employee must complete a Performance Improvement Plan for said employee. This plan is developed to improve or correct poor performance, containing timelines that are outlined and monitored to measure the employee’s progress. A Level 5 (Exceptional) rating is said to be achievable, but given fairly infrequently. High-performing employees often receive a Level 4 (Exceeds Expectations) or Level 3 (Meets Expectations) rating.

Huntington Ingalls

This company uses a rating system that is both numerical and alphabetical, focused on whether or not employees meet company goals. Their 5-point scale assigns abbreviations that coincide with each numerical ranking: 5 = FE (Far Exceeds), 4 = EX (Exceeds Expectations), 3 = ME (Meets Expectations), 2 = DR (Development Required), and 1 = IR (Improvement Required).


Harvard makes use of multiple rating scales within their organization, including overall performance ratings of employees, goals, competencies, and direct report ratings. Overall performance ratings are given on a 5-point scale, observing employees with performances that are leading (5), strong (4), solid (3), building (2), and not meeting expectations (1).

Goals are also tracked using a 3-point rating scale that measures whether a goal or project was on time, on budget, and accomplished. A 3 ranking implies that a goal was met, a 2 ranking is given to partially met goals, and a 1 ranking is assigned to an unfinished goal where most or all dimensions were not achieved.

Competencies ratings are given to employees who demonstrate thorough to lacking knowledge of the organization’s core competencies. This 4-point scale ranges from Advanced, to Proficient, to Developing, and lastly, Does Not Demonstrate.

Direct report ratings are reserved for managers only, and determine whether the ratee’s capabilities are Highly Effective (3), Effective (2), or Needs Improvement (1).

Emory University

Emory University’s HR team operates an in-depth rating system that is similar to BARS. Each employee is rated against a long list of unique core competencies that the organization abides by. This checklist includes building trust, collaboration, communication, delivering results, problem solving, taking initiative, functional knowledge and skills, and service to others/customer focus.

Each of these categories deals with how well an employee displays honesty, respect, listening and sharing, productivity, decision making, and reasoning. The competencies are rated with a 3-point system ranging from Exceeds Expectations, Meets Expectations, and Unacceptable. All ratings apply to supervisors and managers, as well as non-managers.

More Examples

Unsatisfactory | Needs Improvement | Meets Expectations | Exceeds Expectations | Distinguished

Needs Improvement | Meets Expectations

Does Not Meet | Meets | Exceeds

Below Level | At Level | Above Level

Needs Attention | Satisfactory

Unacceptable | Needs Improvement | Acceptable | Good | Excellent

Did not meet expectations | Met some but not all expectations | Fully met expectations | Exceeded expectations | Significantly exceeded expectations

Area of Deficiency | Inconsistently Meets Standards | Meets Standards | Meets High Standards | Regularly Exceeds High Standards

Needs Improvement | Consistently Meets Expectations | Exceeds Expectations | Strongly Exceeds Expectations | Superb 

Unsatisfactory | Meets Most | Fully Meets and Sometimes Exceeds | Consistently Exceeds | Far Exceeds 

Never | Sometimes | Often | Always

Not Often Enough | From Time to Time | Most of the Time

Minor Contribution | Important Contribution | Critical Contribution

Low Performer | Developing Performer | Highly Valued Performer | Top Performer

Unacceptable Performance | Partially Successful | Fully Successful | Superior | Distinguished Performance

Poor | Below Average | Good | Very Good | Outstanding

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The Biases You Must Remove from Your Performance Reviews

Did you know that even after developing the best HR performance management system for your organization, you still have to deal with rater bias? Objectivity is the key to a good appraisal system but unfortunately, it is not always easy to attain. Performance data is created by people, and people's opinions can be biased in a number of ways.

What is rater bias and why does it matter?

Rater biases can come about consciously or unconsciously. They are tendencies that affect how managers rate their employees unrelated to actual performance, they are also called "Idiosyncratic Rater Effects." Here are some of the more common examples:

  • Averaging ratings closer to the middle because "no one is perfect"
  • Over-prioritizing a particular skill that we value highly in ourselves
  • Rating for potential instead of performance
  • Focusing too much on recent events
  • Overvaluing people who remind us of ourselves

Ideally, accurate ratings are based 100% on an employee’s performance. Yet when a person’s unconscious bias is applied to performance appraisals, it can lead to inaccuracy, favoritism and even unfair treatment of employees.

Studies have also shown that when employees perceived performance ratings to be affected by rater bias, they expressed reduced job satisfaction further leading to greater intentions of quitting their jobs. Thankfully, there are ways to address rater bias and optimize your performance appraisal process.

The Most Common Sources of Rater Bias

The Halo Bias is the tendency to give overall favorable ratings due to strong performance in only one or two areas. Its opposite, the Horns Bias, is the tendency to give overall unfavorable ratings due to poor performance in only one or two areas. An example that would fall into this category would be an employee who always shows up early to work, even if the employee performs average overall, this one easy to see thing could greatly increase their overall rating.

What you can do: In this case, basing an employee’s performance on only one perspective allows the bias to take effect. A 360 degree perspective gathered from multiple sources, such as managers, colleagues and reports, would provide more accurate results. This idea is often referred to as crowdsourcing, and it can help to factor bias out of the equation.

Recency Bias, is likely the most common. It happens when the employee’s most recent performance level skews the opinion of the total work for the cycle being evaluated. This could happen both ways; they performed well for the entire period but made a terrible mistake before appraisal time, or they performed poorly until a recent accomplishment just before appraisal time.

Similarly, the Spillover Bias is a when a manager continues to provide positive or negative ratings for an employee based on the employee’s performance in previous cycles. The rater seems to be stuck in a mode of thinking which might be attributed to a case of forgetfulness. However, this type of bias has the potential to lead an employee to be over or under valued for their work.

What you can do: When trying to address recency and spillover bias, it is important to increase familiarity with the employees over longer periods of time. Some companies like Adobe are replacing annual reviews with quarterly performance discussions. A version of this continued conversation throughout the year gives managers the opportunity to keep up to date with employee performance and progress which brings to light what skills and strengths are being developed, as well as areas that need improvement. Work on a system that allows the attachment of files and notes so employees can be sure that their actual accomplishments are being considered when managers complete their appraisal.

Leniency and Severity Bias is when managers tend to rate higher or lower on average than their peers. This is often attributed to a manager's personality, culture or perspective on management. Since ratings are meant to be compared across the company, this bias will make your comparisons inaccurate.

Another bias is the Affinity Bias, where the rater gives higher ratings to those employees with whom they believe they have more in common. Opposite to it, the Alienation Bias is the tendency to give lower ratings to those with whom the manager believes they have less in common. This is typical in a situation where the rater and employee both grew up in the same town, have a similar heritage, or favorite sports team.

In like manner, the Identity Bias is the tendency to view and rate employee performance filtered through stereotypical assumptions about sex, race, sexual orientation, ethnicity, religion, political affiliation, socioeconomic status, educational background, age, disability, etc.

Lastly, the Comparative Bias rates an employee in comparison to another one, or groups of others, instead of evaluating them based on their ability to meet the defined performance expectations.

What you can do: When dealing with these types of behavioral bias, it is important to focus on definitive behaviors as well as measurable goals or achievements. Ratings often cover subjective metrics, but rather than asking if one answers the phone promptly/courteously, you might ask if one answers the phone within five rings or with a specific greeting. Having descriptors for the rating scale can also guide a manager to choose the proper rating and put away the bias.

Ratings are important because ratings equal data, and companies love data. You can decide to pursue good data by removing all bias, but another option is to just not collect or trust quantitative data in certain situations.

There isn’t a perfect way to eliminate every single bias, because in the end, people are the ones rating, and people are biased. So focus on helping people generate the best performance data possible, and back it up with more subjective and long form questions as well.

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Building Blocks of Modern Performance Management

At PerformYard, we believe that your performance management process should be as unique as your organization. We also know that building and implementing a custom, flexible performance management strategy can be challenging, especially one that works with your company. That’s why we’ve collected all the pieces of modern performance management and laid them out below.

Creating the right strategy is about bringing together these elements in a way that will best serve your employees and your organization.


The core of performance management lies in employee appraisals. These could be called check-ins or calibrations or something else entirely, but despite the backlash most all organizations still use structured meetings and review forms as part of their process.

There are many different ways to customize your appraisals, from frequency to the questions asked. Although the objectives of performance appraisals varies from company to company, there are a few key elements to be aware of as you construct your reviews to be as effective as possible for your company.

Who reviews who

Traditionally, performance appraisals have been conducted in a top-down approach where the manager is the sole evaluator of the employee. In a contemporary setting, however, reviews can take on a 360-degree approach that allows employee evaluation from all directions, including management, colleagues, customers, and partners, as well as self-reviews.


Another important element to consider in your performance evaluation is the kind of questions you ask. Between two fundamental types of questions, open-ended and closed-ended questions, your appraisal form should consist of a variety of pointed questions that give managers a comprehensive understanding of an employee’s performance, and give employees the sense that they were heard and evaluated fairly.

Open-ended questions have no predetermined answers, which can be great for performance reviews; and in the meantime, closed-ended questions (yes/no, strongly agree/strongly disagree) can collect actionable data.


One of the most important components of a performance management process is determining when and how often reviews should occur. The classic model of performance reviews holds appraisals annually, at the end of the year. This allows management to draw data from at least 12 months of employee’s performance, which can help to inform raises and promotions.

However, reviews can be done at any increment of time -- from quarterly to semiannually, and even project-based. Whether you choose to conduct them every three, six, or twelve months, a variety of surveys have shown that the majority of employees prefer more frequent conversations with managers.


In the past, traditional performance appraisals took on a format that had a more rating-oriented approach in evaluating work results, with methods including appraisal templates, grading scales, ranking, checklists, critical incidents, essay evaluations, and more. Modern performance reviews tend to focus more on an employee’s development, in order to not just review the year but plan for the future.

Format can include giving employees a score based on numerous areas of job performance, as well as qualitative input, and comments directed to employees that communicate how they can best succeed.


The best way to initiate an effective performance management process is to set forth clear goals and expectations. Involving your employees in the planning process allows them to envision how their personal goals will fit into the overall goals of the company, and gives them a clear understanding of what is expected of them and what to work towards.

Setting goals also helps managers to develop an understanding of the ongoing training needed for employees, and ensures that both are on the same page as progress is made. Goals that are given meaning, and are challenging (but attainable) can drive performance more than any other element in your performance management strategy.

Types of goals

Personal goals are the goals set forth by each individual employee. These goals are 100% about the employee, and are usually great for engaging employees with their work and determining where an employee shines in an organization.

Corporate goals have more to do with the success of the organization, and therefore the success of individual employees. These goals seek to align each team member’s individual goals with the overall goals of the company, bringing about a sense of unity between company and team priorities.

Goal direction

In traditional performance management methods, companies communicated top-down goals that were paired with annual performance reviews. Originating from senior management, these goals are identified and communicated to team members, cascading from the top of the company to lower-level employees.

Collaborative goals, or bottom-up goals, are created by team members that understand the company’s strategy for achieving goals, as well as the individual role they play in the company. A manager will compile a set of company goals based on each team member’s individual goals, ensuring that each employee is a key player in executing the company’s strategy and objectives.


While effective performance management has a great deal to do with documentation and meetings, it has even more to do with continuous dialogue. Ongoing feedback between managers and employees helps to more quickly recognize achievement, document individual performance, and ultimately help employees succeed.

Sources of feedback

Customers can be considered the most important source of feedback as they can provide input for individuals, teams, groups, and management performance. Using surveys, customer visits, complaint systems, and focus groups, customers can provide a unique perspective in the feedback process.

Supervisors, managers, and team leaders are generally the most experienced in giving feedback, and tend to have specialized knowledge of their employees and team members. When given adequate training, these sources can be an integral part of acquiring data for feedback purposes.

Feedback can also be provided by an employee’s peers. This feedback tends to be the most actionable, as an employee’s coworkers deal most directly in examining their performance in the workplace. Subordinates can also provide upward feedback that can improve a manager’s style and performance, and can also motivate low- to moderate-performing employees.

Types of feedback

Constructive feedback, praise, and criticism all fall under the category of feedback in the workplace. While praise and criticism are fairly self-explanatory, constructive feedback is generally the most potent in providing specific information that is based on observation, and is issue-focused.

Constructive feedback is helpful because it contains both positive and negative feedback. Positive feedback affirms past behavior, and focuses on actions that were successful and should be continued. Adversely, negative feedback critiques past behavior and emphasizes the actions that should not be repeated.

Both of these types of feedback can also inform future performance, as employees can get an understanding of what behavior to avoid or improve in the future.

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Managing Complexity without Compromising Your Review Process

When a fast-paced, growing company signs-on with a new Performance Management software, they have high expectations for the value it will add to their corporate framework; streamlined communication, greater accountability, more frequent check-ins, more robust reporting features, to name a few features. Their expectations are high, as they should be, and their intentions are noble, as they always are. But before they begin compiling a portfolio of flowcharts, modules, performance tables, and spreadsheets, those tasked with the implementation should consider the following:

  1. The most effective employee experiences usually steer clear from unnecessary steps and processes. Rather, they focus on increasing productivity and quality of work.
  2. If employees that feel their performance management system is easy to execute and serves a distinct purpose, they are more likely to embrace their system
  3. If employees believe their performance management system is cumbersome and unnecessarily complex, they may become inherently untrusting of the process, feel micromanaged, and therefore, less likely to engage with the system.

The benefit of having a clear and concise performance management process is apparent, but sometimes not so easy to execute in practice. Sound like your organization? Here a few ideas to get you on the right track:

Set your priorities based on the immediate value added

Chances are, when you began sending RFP’s for a new performance management software, you probably had 1-2 features that were ‘must haves’. Keep those features front and center of your implementation, even if there were other ‘bells and whistles’ you may have been interested in during your sales demos. You can also enhance or supplement your process later.

Was your priority to automate your pre-existing review process? Great. Focus on transitioning your forms into your software and setting up a system that mimics what you’d done in the past.

Was your top priority to increase engagement? Rather than attempting to use multiple features for this one purpose, focus on the type of engagement you are looking to enhance, and instead work exclusively in feature that will best get you to your desired outcome. In doing so, you’ll be able to establish a standardized process and promote more consistent product usage across your organization

If your objective is better accountability, perhaps start exclusively within a goal setting feature so that your employees can get in the habit of using of setting and tracking their goal progress and develop a cadence around how they monitor their progress. In doing so, employees will feel that they are setup for success as they become more adept as using they continue to use the system successfully.

Be intentional with your reporting features

When it comes to analyzing your data, sometimes less is more. While the reporting structure may be designed to be robust to accommodate different organization’s needs, it doesn’t mean necessarily mean that their needs are your needs, or that you should adopt every conceivable report type to stay relevant. Hone down on the type of information you are looking to extract from your company’s reports and create a process that will bring you specifically to those reports. Overquantifying your employees can lead to disengagement, and may not come with tangible benefits to your organization’s compensation model. Even companies like General Electric and Microsoft have conceded that complex processes don’t lead to reliable data. And that doesn’t address the degree of subjectivity that can be associated with performance management driven reports.

In short, reporting features, when used strategically and specifically, can undoubtedly be a great resources when identifying your workforce’s strengths and weaknesses. But over-usage or making an attempt to over quantify your workforce, when simpler, more qualitative methods can be adopted can be counterproductive to its initial purpose.

Re-evaluate and make adjustments as needed

There’s no shame in looking back at the end of a year or few years and deciding what’s working and what needs to be tweaked. Companies like Regeneron and Deliotte, both examined the efficacy of their performance management processes. In doing so, they made strategic changes their previous processes, and their newly created system was adopted with high levels of success across the board.

The readjustment phase for your company can be more subtle. If you noticed that employees were quick to go in and set their goals at the beginning of Q1 but haven’t been so diligent about going in to update their goals in Q2 and Q3? Maybe it’s time to think about implementing a check-in. Conversely, if you noticed that review form responses become more spare and less detailed throughout the year? Maybe it’s time to reduce the frequency of your check-ins and/or switch up your question types to elicit more detailed responses. The benefit of starting simple and re-evaluating subsequently is it gives you will not only have the bandwidth to zero-in on your existing process, but also the clarity and experience to identify strengths and/or opportunities to make adjustments.

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How Does GE Do Performance Management Today?

When it comes to discussing performance management, it’s impossible to skip Jack Welch’s “rank-and-yank” review tactics back in the 1980s. During a time when the economic reality at GE demanded efficiency and operational excellence, the company became well-known for its hard-charging and intense approach to performance reviews.

The company has since undergone much change in their style and performance management process. Today they conduct a more evenly distributed and ongoing review process. The focus is less on rating and ranking and more on developing, connecting, and inspiring employees.

Here is what performance management looks like at GE today.

Performance management at GE

GE rolled out its new performance management strategy at the end of 2016, replacing its legendary Employee Management System that was implemented in 1976 and widely emulated by other companies. The change took place largely due to a program launched in 2013 called FastWorks, which introduced skills and processes to make GE a more lean, agile, and customer-centered organization.

Under the new direction of CEO Jeff Immelt, GE began to shift from annual performance reviews to a system that accommodated the lean and innovative methodology of Fastworks. The organization developed a simple, contemporary smartphone app, designed with the sole purpose of facilitating more frequent communication and meaningful conversations between managers and employees.

The app, called PD@GE, exchanges voice and text input, attached documents, and even handwritten notes between employees, managers, and teams across the company. The organization’s goal was to shift their employee review focus onto continuous dialogue and shared accountability. The app facilitates a constant exchange of feedback year-round; participants can receive suggestions from anyone in their network, including upper management and members of other teams.

In order to continue in the vein of customer-centered growth, GE’s IT team developed the app so that managers can hold regular “touchpoints” with employees in order to set goals and update priorities based on customer needs. At its core, the app serves as a platform to define goals for employees and to enable constant improvement for all users.

While many of the headlines and articles detailing the legendary company’s migration from annual cycles and stack rankings may lead people to believe it’s been a neat and succinct transition, the question begs to be asked: Has GE really gotten rid of annual rankings entirely?

Summary Conversations

As stated previously, one of GE’s main aims in their performance review strategy is to facilitate recurring, meaningful conversations between managers and employees. Along with continuous feedback through the PD@GE app, the company also mandates yearly summary conversations where employees and managers finalize and submit a summary document together.

During the meeting, employees and managers reflect upon goals met and impact achieved, while casting vision for future goals to be met. These meetings act as an existing piece of the old EMS structure, and operate just as they did before -- with managers basing compensation, promotion, and development decisions on the input provided.

However, with the introduction of the new performance-development approach, these year-end conversations exist as more of an ongoing dialogue rather than a one-time meeting that is loaded with expectations. This allows the conversations to be more meaningful and future-focused, and informed by more specific data of an employee’s contributions and achievements throughout the year.

In a Harvard Business Review article, GE executives Leonardo Baldassarre and Brian Finken describe GE’s new performance-development approach as an attempt to shift the company’s focus from “command and control” to “empower and inspire.” Judging by the company’s latest increase in productivity and significant benefit yield for customers, it’s working.

But how do their employees feel about the change? Let’s take a look at some anonymous Glassdoor reviews to get a glimpse of how GE’s work culture has shifted along with their performance review strategy.

What Employees Say


“Great company to work for even while being one of the largest corporations in the world. Never have to worry about not having a job. They seem to care about the ‘little’ guy as much as possible.”

“Best company I have ever worked for. The company knows how to motivate employees and get ahead of competition. Even through rough times they are still competitive in areas. Leaders are trained unlike other companies where managers and leaders are terrible and untrained.”

“World-class training programs and people development. Very smart leadership, great to learn from. Strong organization around the business cycle, you know what to expect. Work/life balance is good, if you make it a priority.”

“Work culture is too good, people around are very professional. Company is very secure for female employees. Offers good work life balance as flexible work hours are allowed. No punch in/punch out needed as GE believes in their employees. Lateral/vertical movement is appreciated after every 3 years.”


“Very big company so it makes you feel unconnected to some of the things that go on. Many times it is difficult to get a straight answer when important, company-wide news comes out. Progressively changing a huge company takes time, don’t expect culture to change overnight.”

“Management can be clueless. Culture has been rough the past few years with layoffs and reduction in force. HR controls a lot of the decisions, with little line of sight to what’s actually happening. And too many buzzwords.”

“Back in the day when Jack Welch was at the helm, GE was run like a well oiled machine. The stock split, GE was good. GE was diversified and the pension was funded. Things changed when Jeff Immelt came and took charge and totally screwed up GE, he did not do what was best for the company, nor did the board of directors. They kept the problem going on for over 16 years. Replacing Immelt and not giving John Flannery enough time to fix a 16 year mess was wrong. After 39 years, this is not the GE I started with. I was embarrassed at the end to say I worked for this company.”

In summary

So, has GE’s management served to “empower and inspire” its employees as they set out to do when they shifted their performance management approach?

It may be that time will tell. However, it’s safe to say that many positive changes have occurred during the company’s transitional phase that have impacted many individual pockets of the organization -- and perhaps the most significant is the culture.

Leader of cultural transformation at GE, Janice Semper, set out to change the company’s operations and solutions for its customers by first looking inwardly at the mindsets and behaviors of its employees. The organization has made many strides to change the language and the way that many processes are done in order to promote a sustainable, collaborative, and empowered employee environment.

At the end of the day, GE’s performance management strategy focuses on people and dialogue -- meaning that intensive conversations and enormous chunks of time are dedicated to ensure that each employee is exhaustively evaluated both on what they’ve accomplished and how they lead. Attention is given to each individual appraisal, and manager’s assessments can be questioned or given feedback to ensure that the quality of each appraisal is honest and comprehensive.

And clearly, it’s working -- one of the most repetitive “pros” found in GE’s anonymous Glassdoor reviews is the company’s culture.

So, while it’s hard to say whether or not GE has abandoned its old system for good, it is certain that there have been benefits to both of the company’s major performance review systems. The company would not be what it is today without its Six Sigma, rank-and-yank of the Welch era, and is experiencing continued growth and profound success as they continue to adapt their appraisal process to the needs of their organization in an ever-changing business environment.

More Inspiration

GE 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.

3 Approaches to Performance Management: Google, Betterment and IBM

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

How Does Amazon 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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The Right Way to Use Ratings in Performance Reviews

Ratings are often maligned because no one wants to be boiled down to a score, but ratings do offer a quantifiable view of performance.

When companies need to make decisions regarding their talent base, they rely on data and use trends to plan for improvements. Some questions they might be asking are which managers are most efficient? Which employees demonstrate the best leadership qualities? Are there skills gaps that need to be addressed?

For someone in the process of building out a performance management strategy, rating scales can be an essential tool used to measure the performance. So if the information gathered from a rating scale system is valuable to an organization, why are some ditching the entire approach, and is there a better way to implement its use?

What are rating scales?

First, let's clarify; ratings are not rankings. Rankings make up a system where employees are compared and categorized into some type of ordering or buckets.

Ratings instead are the quantitative answers to performance appraisal questions. Ratings could be used to rank, but they certainly don’t need to be used that way. According to SHRM, rating scales are used in performance management systems to indicate an employee’s level of performance or achievement. The types of methods used to measure the performance are graphical rating scales, numerical scales, and letter scales. Some are only 2 or 3 point scales, but most companies opt for a 4 or 5 point scale, which might look something like this:

Outstanding - 5pts: Performance consistently far exceeds job standards/expectations on a sustained basis.

Exceeds Expectations - 4pts: Performance consistently meets and exceeds normal job requirements.

Meets Expectations - 3pts: Performance meets position requirements.

Needs Improvement - 2pts: Performance meets some position requirements, objectives and expectations.

Unsatisfactory - 1pt: Performance does not meet position requirements. Immediate attention to improvement is required.

Pros and Cons of Ratings

The advantage of this model is that it is structured. It allows ratings to be quickly compared and contrasted, and because each employee receives the same rating criteria with the same range of responses, it is a standardized process as well. Consequently, this encourages fairness in treatment for all employees and creates standard measures of performance across any business area.

The disadvantage one might run into with rating scales is the loss of trait relevance. Are the selected rating-scale traits relevant to the performance of all employees? Since the questions need to be constrained, there is a higher likelihood they won’t apply to an employee’s work. Not every job within an organization will require the same use of specific traits.

Another challenge is the accuracy of ratings. Numbers can feel authoritative, but they are only as good as the process that creates them. Just because it’s cleaner to make decisions with data doesn’t mean that you’ll be making the right decisions.

How to Make Ratings Better

One way to improve performance rating data is through calibration sessions. The way this works is managers prepare preliminary performance appraisals, then meet with other managers who supervise similar groups of employee's. The participants review and discuss their proposed appraisal ratings for every employee. In the end, participants adjust ratings to assure accuracy and final performance appraisals are then prepared. This also weeds out the “hard” and “soft” grader effect.

Another way ratings are being modified is by combining them with qualitative comments and feedback that give the employee a clear understanding of why they got their rating and how their performance aligns with goals. In this case, we see that ratings can serve as a base for more productive conversation, engaging meetings, and employee input.

Lastly, many companies are changing the scales to reflect behaviors and ditching the “expectations” terminology. A lot is said in a word and employees don’t necessarily feel great when given a number 3 for fulfilling their job description accordingly. Re-defining rating scales to make them specific to the criteria being rated could mark goals “achieved” or “deferred”. Competencies and soft skills could be marked as being observed “consistently” or “sometimes”.

Organizations that are able to develop standard competency based ratings across all functions would be most likely to benefit from its implementation. Likewise, companies that can rate various job objectives across all functions as well, could benefit from using rating scales in their performance reviews. Companies that work on diverse projects, or contain diverse positions, might not be able to customize the use of ratings to their advantage.

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Focal Point Reviews Benefits and Challenges

The differences between focal point reviews and anniversary date reviews are significant, and many HR professionals struggle to decide which method is ultimately better for handling employee evaluations. The truth is that there is not necessarily an objectively better method -- each company’s needs are unique, and both approaches have merits and challenges that are likely to shape your organization in different ways.

While focal point reviews have managed to eclipse anniversary date reviews in popularity, it is best to choose the performance review cycle that works best for you -- we’ve laid out some pros and cons to help you do just that.


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Focal point and anniversary date: What are they?

Focal point reviews, also referred to as common date reviews, are performance evaluations that occur all at one time for all employees within an organization. These reviews can occur once, twice, four times a year, or even more frequently. Salary adjustments and performance evaluations are conducted on a fixed date for all employees, or segmented groups such as executives and front-line employees.

Anniversary date reviews are scheduled in such a way that each employee is reviewed in cycles that are based on a date specific to that employee (like a hire date). Employees are reviewed and compensated at the same interval, but not the same date. This system usually makes it so that a company is conducting individual performance reviews year-round, rather than at one time.


The benefits of focal point reviews

The advantages to focal point reviews are numerous -- so much so that they have become the favored review approach among many of today’s companies. Organizations that have chosen to implement focal point reviews have found that they are easier for HR to coordinate, as the review process can be completed in a single one-to-two month time frame rather throughout the full year. Synchronizing performance reviews across the organization allows companies to establish corporate goals before beginning the process, ensuring that individual and organizational goals are linked as employees approach performance reviews.

Focal point reviews also give managers the opportunity to compare and contrast employee performance, making it easier to distinguish top performers and to pinpoint low-performing employees. Many companies have found that this approach helps managers to distribute fair and consistent feedback, as well as compensation adjustments that are unaffected by changing business cycles.

The challenges of focal point reviews

Some managers might consider focal point reviews to be a dream performance management strategy; but to others, one-to-two months of non-stop performance evaluations is a nightmare.

A significant amount of time and dedication is required to complete a review process that spans across the entire company, especially for managers with a large number of employees. This might require management to neglect other tasks for as long as it takes to complete the process, which has the potential to hurt organizational growth and development -- not to mention it has the potential to seriously exhaust your managers.

Another downfall of focal point reviews is the inadvertent, but significant disadvantage that it places on newer employees. Employees that are new to an organization will not have a full year of performance to be evaluated, and often, companies make no plans to address partial-year reviews.

These challenges are what have motivated some companies to continue practicing an alternative method -- namely, anniversary date reviews.

The benefits of anniversary date reviews

One of the appeals of anniversary date reviews is that evaluations are distributed more evenly for managers. This ensures that management does not become overloaded with reviews during a brief season. It also gives them the ability to spend more time and attention on each evaluation.

Proponents of anniversary date reviews claim that the evaluations have the potential to be of higher quality, since more time can be spent on each individual employee’s review. This approach also allows all employees to be evaluated based on one full year of work, placing new hires and seasoned employees on a level playing field when it comes to reviews.

The challenges of anniversary date reviews

While the spaced-out nature of anniversary date reviews can make it less stressful for managers to handle evaluations, it can also cause some difficulty in a manager’s efforts to keep organized in the review process. With so much data to keep track of, reviews can easily become delayed or postponed -- not to mention the potential recurring issue of retroactive salary increases.

The evaluation process can also become jumbled due to ever-changing data that can evolve over a year’s time. Reviews can become difficult to administer, and managers may find it challenging to gather accurate performance metrics and to make improvements to the review process.

How to choose

Ultimately, the main goal of your decision making process should be to choose the review cycle that works with your organization. The choice between focal point and anniversary date reviews should depend on the size and needs of your company, and should be implemented with other customized evaluation tools to maximize your performance reviews.

Focal point reviews may be the better option if your company is focused on maintaining organizational excellence in your performance review system. They can also be helpful to managers that wish to evaluate employee performance using a comparison and contrast method.

On the other hand, some organizations wish to evaluate individual employee performance against established standards rather than against fellow employee performance. In such cases, anniversary date reviews work well to objectively analyze an employee’s performance exclusively as it relates to the goals and standards set out by the company.

Focal point reviews allow managers to schedule reviews and salary adjustments according to the timeline that fits your organization’s overall growth, from quarterly to annual reviews. However, anniversary date reviews can be better suited to fast-growing companies that are hiring at an ongoing, consistent pace because they ensure that every employee is rated equally.

If you’re still having a hard time deciding, never fear -- some companies choose to combine the two approaches, transitioning from anniversary date reviews to focal point reviews after the first few years.

Regardless of the performance review cycle your company chooses, the most important thing to remember is to implement the process in a consistent way. The best thing that you can do for your organization and your employees is to lay the groundwork for effective and constructive performance review feedback.

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Stack Rankings: What they're good for and where they fail.

Some have condemned it as a cutthroat, destructive, and outdated practice, while others promote it as the most effective tactic to ensure a high-performance workforce -- stack rankings are one of the most widely discussed (and highly contested) components of performance management strategies.

When it comes to the debate of stack rankings, it’s no secret that the majority lies with people who despise them. Companies such as GE, Microsoft, and Goldman Sachs abandoned them long ago due to employee backlash. But even after facing such harsh criticism, the controversial approach hasn’t been entirely dismissed -- prestigious companies like Amazon and IBM are still implementing stack rankings in their performance appraisals. So, what does this mean? Is the majority wrong about stack rankings? How do we know if (or when) we should (or shouldn’t) use them?

First things first, it’s helpful to understand the origins of stack rankings, and the context in which they were created.


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The history of stack rankings

The practice of stack ranking, otherwise known as rank-and-yank or forced ranking, was conceptualized by GE’s CEO Jack Welch in the 1980s as a method of differentiating high-performing employees from low-performing employees. The process ranks individual employees relatively against their coworkers in order to reward top-tier performers, while identifying and weeding out low performers.

Stack rankings came out of a desire to enact performance appraisals in an effective and efficient way, with the ultimate goal of cultivating a high-performance workforce. But this is where it gets complicated:

In a stack ranking performance rating system, managers are forced to rate their employees on a bell curve. Only about 10-20% of employees can be designated as top performers, while a fixed number of employees must be labeled as low performers and are either placed in a probationary improvement period or let go. In the meantime, about 70% of the company’s workforce, labeled the “vital” employees, are depended upon for adequate and reliable performance.

Naturally, the implementation of stack rankings has produced a variety of both negative and positive effects, both in overall organizations and among employees. Here are a few of the positives.

What stack rankings do well

One of the main goals of stack ranking was to achieve meritocracy across organizations and businesses -- and, some would say, that is exactly what they do best.

CEO David Calhoun, a former vice president of GE, defends stack rankings for this very reason, claiming that the system was effective because they had a clear objective to support it. The objective at GE, and for many organizations, was to clearly articulate the specific criteria required for employees to become high-performers in the organization. Stack ranking promotes, and even forces, honest discussions between employees and managers about where they stand in meeting that criteria.

In this regard, the stack ranking system can help to avoid uncomfortable or ambiguous circumstances that employees often face -- whether it’s a high-performing employee who isn’t getting promoted and doesn’t understand why, or a low-performing employee who finds himself suddenly and unexpectedly laid off.

Stack ranking can also be a positive force in employee morale. The process of identifying high-performers makes it easier for organizations to take the necessary steps to keep them. In the stack ranking process, managers are provided with useful data that can help them to more quickly spot and champion talent.

Addressing low performance can also have a beneficial effect on productivity, especially if low-performing employees are given specific objectives to improve and develop. This also serves to motivate regular and high-performers when they see that low performance issues are being taken care of. Overall, the process can help to inspire and spur on employees of all performance levels.

Now, it’s time to discuss some of the less-than-positive outlooks and opinions about stack rankings -- and while the above-mentioned “positive effects of stack ranking” can ring true in some organizations, other companies and employees would fervently argue that stack rankings had the complete opposite effect. Here’s what they might say:

The arguments against stack rankings

While creating a meritocratic workplace based on employee performance seems like a fair way to promote and fire employees, many companies have discovered that the use of stack rankings has resulted in more harm than good.

Ex-employees of Amazon, where stack ranking is still in use, have spoken out about the tech giant’s cutthroat, survival-of-the-fittest work environment. The company’s work culture, which has been described as “purposeful Darwinism,” evidently pits employees against one another to compete for the top-performing percentile. Naturally, this hardly boosts employee morale.

Others have criticized the flawed nature of forced ranking, claiming that the process was crippling for its employees and overall growth. When Microsoft got rid of stack rankings in 2012, an article was written describing the lack of innovation that the company experienced due to the harmful practice. When every manager was forced to rank their employees on a scale from top to poor performers, two out of 10 employees would receive a great review, seven out of 10 would receive an adequate review, and one employee would receive a terrible review. Author of the article Kurt Eichenwald determined that the practice had caused employees to compete against one another rather than with other companies, stifling the organization’s overall growth and innovation.

So, you might be wondering -- what’s the verdict? Are stack rankings a good or bad tool to use in performance management? It all depends.

When stack rankings should/shouldn’t be used

Stack ranking is obviously a powerful performance management tool, but should be used with caution and close examination of your organization’s overall goals. Author Dick Grote makes a case for using the controversial evaluation system on an interim basis, saying: “The procedure is not right for all companies, nor something that should be done every year. But in the right company at the right time, forced ranking creates a more productive workforce where top talent is appreciated, rewarded, and retained."

Implementing a stack ranking procedure essentially guarantees that managers will be able to differentiate talent within your organization, which can lead to several positive business outcomes. Rewarding and retaining top talent can simultaneously inspire and stimulate middle-to-low performers toward higher performance. When used in combination with continuous, candid feedback, stack rankings can be a powerful tool to create a more productive workforce overall.

However, be cautious of the pitfalls -- namely, a competitive work environment, and an emphasis on rating rather than cultivating employee improvement.

Taking Microsoft as a prime example, a competitive work culture can be detrimental to both team dynamics and overall company success. The moment that your employees start spending more time thinking about their ranking and where they stand in relation to their coworkers, they become distracted and unable to produce their best work. This can lead to talented employees underperforming, and focusing more on their rating than on the feedback they need to improve and succeed.

Similarly, if your company is reliant on innovation and creativity, you may want to consider leaving stack rankings out of it -- especially if you desire for your performance appraisal process to focus on employee growth and development.

Stack rankings are riddled with issues and complexities, yes, but they could still have a positive impact on your organization. While they shouldn’t be the only facet of your performance management process, maybe there is still room for them as part of your process.

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The Purpose of 90-Day Reviews for New Employees

New-hire reviews are one of the most frequently overlooked and grossly underrated parts of a functioning performance management strategy. Whether it’s well-intentioned managers that allow new hires to fall through the cracks, or companies choosing to skip reviews altogether, the idea behind new-hire reviews can get lost in the onboarding process. New-hire reviews, specifically 90-day reviews, can actually be one of the most important facets of your performance management strategy.

The purpose of 90-day reviews is to make the onboarding experience as seamless and effective as possible for new hires and management alike. An investment in your company’s new hires via 90-day review can make the biggest difference in productivity and average tenure for employees, manager-employee relationships, and saving time and resources at your organization.


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Here’s what a successful 90-day performance review should look like:

1) A benchmark for measuring performance.

90-day reviews function as an important checkpoint for an employee’s progress. In order to fully understand the importance of 90-day reviews, it helps to analyze the patterns of new hires in today’s organizations.

Employee loyalty statistics have determined that average job tenure is about 4.5 years. Employee retention numbers are critically low--especially in tech companies--and according to a study from an HR technology company, approximately 17% of new hires leave within the first three months at a new job, while 30% leave within the first six months.

If anything, these statistics prove that a new employee’s first 90 days are critical. Companies that choose not to implement 90-day reviews into their performance management strategy are forced to then rely on annual reviews to evaluate employees, which--if the above statistics are true--either occur after one-quarter of an employees entire tenure, or after an employee has already left the organization.

90-day reviews serve as an excellent benchmark during onboarding to measure a new employee’s performance in a realistic timeframe. After a solid 90 days, new employees should feel independent enough to be held accountable for their performance at the company thus far.

2) An opportunity to ask questions.

A successful 90-day review gives employees the opportunity to assess themselves while also giving and receiving feedback. The review provides an open forum of communication which allows each new hire the chance to speak, ask questions, and get the help they need to continue improve their performance.

An employee has the opportunity during this review to discuss with management any questions, requests, or concerns that may have surfaced during their first 90 days at their new job. They can receive feedback on their initial performance that includes reinforcement of things that are working, as well as feedback about the things that should change. The 90-day timeframe gives them a chance to make changes early, ultimately setting them up for success in the annual performance review.

3) A solid foundation for manager-employee relationships.

While the 90-day review could technically be considered a formal discussion for managers to communicate and clarify their performance expectations for new hires, this review can also be an important opportunity for managers to build a solid relationship with their employees. Overall, a well-planned 90-day review can help to solidify and guarantee long-term employee engagement at your organization.

Connecting socially can also help your new hire to better understand the culture and politics of your company. While a hefty percentage of starting a new job has to do with projects and tasks, there is also a large social component to a new hire’s first 90 days in a new work culture. Meeting in a 90-day review can help your new hire to understand the lingo, meeting dynamics, and general culture of your organization.

Ultimately, 90-day reviews benefit managers greatly, as they provide structure to the task of assessing a new hire’s potential success going forward. After 90 days, managers have had ample opportunity to observe the progress made by new employees, and a formal discussion can help managers more quickly evaluate whether a new hire is not a great fit for the organization. This can be an instrumental step in helping to save time and resources at your company, and is one of the reasons that 90-day reviews can be an incredibly effective tool in performance management strategies.

Here’s what a 90-day performance review shouldn’t be:

1) A “probationary period.”

The first 90 days of a new hire’s employment are often dubbed a “probationary period”--a phrase that has lead to many common misconceptions about 90-day reviews. Employees can misinterpret their first 90 days in a new job to be a correctional period that they are immediately placed in on their first day of work. This can potentially harm their view of the company, leading employees to believe that they must “hit the ground running” instead of taking the time that they need to get up to speed.

90-day reviews should instead be adopted into performance management strategies with the intention to structure the review as a reflection of the position. The reviews should be designed to get new hires up to speed in a thoughtful and deliberate way, ensuring that your new hire is able to add value to the company as soon as possible, while also feeling valued as a contributor.

2) A one-sided Q & A.

If your approach to 90-day reviews consists of nothing more than a checklist of questions for your new hires, chances are you won’t get much out of using them in your performance management strategy. It’s important that managers treat 90-day reviews as a performance review for both employees and management. When the review consists of nothing but feedback from management, a new employee can feel as though their opinions are not valued, and that the effort they put into their first 90 days of work went unheeded. New employees are often already stressed by the multitude of new tasks and responsibilities on their plate, and overloading them with feedback can cause them to feel overwhelmed.

Allowing new hires to provide feedback, both positive and constructive, helps companies to streamline their onboarding process and help new hires realize their full potential more quickly. Feedback for both parties is a critical component to ensuring that both managers and employees get the most out of your 90-day review. New employees can provide valuable information about what is and isn’t working, which can lead to improvements for the overall organization.

3) Post-poned or shrugged off.

You may think this is an obvious one--but unfortunately, this is one of the most common mistakes that companies make regarding 90-day reviews. Managers that promise to conduct a 90-day review and fail to follow through can cause unnecessary stress to new employees that are already overwhelmed with the start of a new job.

It’s important that management puts forth the effort to create an organized agenda when it comes to 90-day performance reviews. Studies show that organizations that follow through with 90-day reviews see direct benefits in increased employee engagement and tenure. According to a recent study, new employees that went through an organized, structured onboarding program were 58% more likely to remain with the organization after three years.

The key to achieving a well-structured onboarding program that sets your new hires up for success may be as simple as sticking to your 90-day review plan.

So, why use 90-day new hire reviews?

Overall, 90-day reviews can be a great, highly effective tool to implement into your onboarding and performance management strategy in order to increase productivity, extend employee tenure, and ultimately access the full potential of new hires at a quicker pace. When new employees are given the opportunity to weigh-in and be evaluated at around the 3-month mark, it’s possible to unlock their full potential and see their contribution to the organization much sooner.

If done right, 90-day reviews will help to transition your new hire from the “new guy” into a key performer at your company within the first 90 days on the job.

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How does Facebook do Performance Management

Facebook stands apart from the crowd in more ways than one. Their performance management strategy is no different.

Although some Fortune 500 companies are moving away from performance evaluations, Facebook is standing firm by conducting biannual 360 reviews. The company also facilitates a continuous stream of real-time feedback, allowing employees across the globe to give and receive feedback.

Peer reviews and feedback has the potential to create a competitive and hostile work environment -- but from what it sounds like, you won’t hear employees complain about that at Facebook. Instead, coworkers often exchange feedback with complete cordiality and civility, to the point that one news outlet labeled the work atmosphere “cult-like.”

Whether or not the employees are as happy as their Facebook profiles make it seem is up for debate, but one thing is certain -- Facebook’s talent is certainly taking the already-successful company even greater heights.

Let’s take a deeper look at Facebook’s performance management strategy.

Facebook's approach to performance management

Employees and managers at Facebook generally know what to expect when biannual performance reviews roll around. Due to the company’s continuous stream of 360 real-time feedback, everyone has a good understanding of an employee’s performance prior to the appraisal, minimizing any uncertainty or ambiguity on both ends.

All of Facebook’s global employees have access to internal software that enables real-time feedback among coworkers, while management uses the software to keep track of project progress and provide general support. The information gathered in this system, as well as the feedback collected from three to five close colleagues in peer reviews, is what managers use to determine each employee’s performance at the biannual review.

Molly Graham, a software engineer at Facebook, shared online that the actual process of gathering 360 feedback is dubbed the Performance Summary Cycle. According to Graham, “There is a two week period where employees solicit peer feedback (usually 3-5 peer reviews), and write a self assessment. Managers then read all the peer feedback and the self assessment and determine a ‘Performance Assessment’ or rating of the employee's performance over the last six months as well as whether or not it is the right time to promote the employee.”

You’re probably thinking: “Don’t they also decide which employees to fire?”

In an interview with Business Insider, Facebook’s VP of People Lori Goler stated that the company’s evaluations act as checkpoints rather than in-depth investigations into an employee’s performance. Goler claims that if anything is surprising in these reviews, then “something has gone horribly wrong.”

In other words, management seizes the opportunity during performance reviews to reward the performance of exceptional employees, whereas underperforming employees rarely make it to their performance review.

Employees walk away from their appraisals with a grade out of seven. The numbers are given definitions from “redefines” to “does not meet.” This stack ranking system has obviously worked to some degree, as evidenced by the social network’s astronomical success and impressive talent, but it has had a somewhat polarizing effect among employees and ex-employees.

Potential Problems

According to a 2016 edition of the Harvard Business Review, Facebook promotes three core values in their performance management strategy: fairness, transparency, and development.

However, it sounds like some ex-employees would argue that the company did not always live up to these values.

In January 2019, Salvador Rodriguez of CNBC conducted in-depth interviews with more than a dozen former employees to ascertain how the felt about Facebook’s performance culture. The Ex-employees likened the company to a cult, claiming that employees feel a distinct pressure to never show dissent, to keep up appearances on their Facebook profiles, and to force cordiality and friendships with their coworkers in order to advance.

Here are few statements from these employees regarding their struggle with the company’s performance review system:

“It is not OK to act like this is not the best place to work." - Former employee

"People are very mindful about who they're connected with on Facebook who they also work with and how what they're posting will put them in a favorable light to their managers.” - Former employee

"It's a little bit of a popularity contest. [With the Peer Reviews ] you can cherry-pick the people who like you — maybe throw in one bad apple to equalize it." - Former manager

In direct opposition to COO Sheryl Sandberg’s personal mantra to strive for authenticity at all costs, one former employee claimed, "I never felt it was an environment that truly encouraged 'authentic self' and encouraged real dissent because the times I personally did it, I always got calls.”

Many of these ex-employees attributed Facebook’s recent series of scandals to its so-called no-dissent work culture. If employees had been encouraged to give honest and critical feedback, they said, some of these problems may have been caught prior to their exposure in the media.

While the peer review component of their performance management strategy may be an efficient way of assessing each employee’s strengths in such a large company, many former employees felt that it often turned into a simple popularity contest where coworkers were pitted against one another to compete for advancement.

However, there are two sides to every coin, and there are obvious and unmistakable benefits to Facebook’s performance management system that are hard to ignore.

The Benefits of Facebook’s Strategy

Lori Goler, along with head of HR Business Partners Janelle Gale and writer Adam Grant, implored fellow HR representatives and companies not to “throw the baby out with the bath water” when it comes to performance reviews, claiming that the complete disregard of performance reviews is an overreaction to how they’re executed. Facebook’s implemented system was discovered to be the most practical and efficient among the various methods they tried. They write:

“Many companies that are abandoning performance evaluations are moving to real-time feedback systems. That is an excellent way to help people repeat their successes and learn from their failures. But it doesn’t help them—or the organization—gauge how they’re doing overall.”

And employees seem to agree--in an internal study, Facebook concluded that over 87% of people wanted to keep performance ratings.

Employees recognize that the system has flaws, but most also agreed that what they have is better than no reviews at all.

Former Facebook manager Daniel Ho claimed that the company’s performance review software and 360 feedback twice a year made it easy for employees to give and receive recognition and visibility. Ho said, “Facebook's process was transparent enough that I knew where I stood and what I needed to work on. It was hard not to notice that managers cared about giving employees ownership, responsibility, and opportunities to learn.”

And Goler et al. agree -- at Facebook, performance reviews are used to help employees understand how their contributions matter to the company’s growth, as well as to more easily recognize and reward top performance.

What to take away

Here’s what we can glean from the way Facebook has constructed its performance management system:

While performance evaluations are not necessarily the perfect system, and can have costly flaws, they are certainly better than no reviews at all. Without formal reviews, performance will still get rated in another, more secretive manner that leaves employees in the dark and creates a sense of distrust toward management.

Even continuous real-time feedback, while a helpful tool to improve an employee’s performance, can employees unsure of their impact on the company overall.

More Inspiration

Facebook 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.

3 Approaches to Performance Management: Google, Betterment and IBM

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

How Does Amazon Do Performance Management

How Does GE Do Performance Management Today?

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

Continue Reading
Performance Management at Tesla: What we know.

Just when you thought performance management was getting soft, along strolls Tesla hitting the headlines with its no excuses approach.

If you believe the hype, Tesla has been managing its extreme growth and aggressive goals as an old-school taskmaster.

Back in 2017, the global automotive company reportedly fired hundreds of staff with little or no warning following annual reviews. It was an unexpected move and one that left everyone wondering whether the notorious rank and yank approach would be making a comeback. Then, in 2018, Tesla announced it was planning to cut another 9% of its 46,000-person workforce, citing the "normal ebb and flow of hiring and firing in a business."

Tesla stands out amongst its tech star peers for a less cushy approach to performance management process. Here's what we know about it.

What’s going on at Tesla?

Tesla is one of those mysterious companies we’re all intrigued by.

What’s it like to work there? What do employees do all day? What do they get rated on?

Unfortunately, we can’t answer all of these questions.

Here's what we do know. The company was founded in 2003 and is currently estimated to be worth $60 billion. Led by the enigmatic (and let's face it, controversial) Elon Musk, Tesla is an organization like no other. Its business is luxury cars, but its ambitions are much higher. Under Musk's guiding hand, Tesla wants to revolutionize the entire automotive world in ways we can’t even imagine.

Explaining his master plan for Tesla, Musk writes “the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.”

The man has grand aspirations. And Musk has made it no secret that the company faces challenging production targets. (He recently apologized to a customer who was waiting for her new Tesla car by tweeting “we’ve gone from production hell to delivery logistics hell.”)

As Tesla ramps up production to hit a target of 5,000 Model 3 cars every week, its priority is 100% delivery execution. Given the goal, maybe a cutthroat performance management approach is the best way to get those results and keep customers happy? We'll let you be the judge.

A glimpse into performance management at Tesla

Like most organizations of Tesla's size and influence, its performance management system is somewhat of a mystery.

But if you know how to read between the lines, there are some interesting strands to follow. For starters, it seems that the performance management culture has changed quite dramatically over the last few years as the company has grown.

From employee development to stack ranking

Back in 2016, when Juliana Bednarski was HR Business Partner and Louis Efron was Head of Global Employee Engagement, the picture looked quite different. In a presentation for Talent Week, Bednarski and Efron outlined Tesla’s dynamic approach to leveraging the best talent.

They recognized the importance of engaged employees and their impact on customer engagement. In response, they created the Tesla360 Summary. This was essentially a staff survey that used the Maslow Hierarchy of Needs to guide performance management. The survey was a massive success and achieved an impressive 91% participation rate.

So it's strange that during the tenure of Gaby Toledano, the Chief People Officer who left late last year, Tesla appears to have embraced an entirely different approach. Details are thin, but it seems that they've gone back to using a traditional annual review to determine promotions, demotions and firings.

That's a stark switch up from their previous engagement-focused approach aimed at helping employees reach the top of the self-actualization pyramid.

Changing priorities, changing process

In an email statement submitted to Fortune, a Tesla spokesperson confirmed that performance reviews happen annually and employees meet with managers to discuss their achievements over the past 12 months.

As a result, top performers are rewarded with either compensation, equity awards or promotions. And we saw what happens to the low performers.

Not much to go on there. But it's clear that Tesla is driving hard to deliver what former employee, Spencer Gore (now CEO of Impossible Aerospace) describes as “industry-defining product on a limited budget."

And, to deliver on such a promise, Tesla needs to run a manufacturing operation that is lean and mean.

With Tesla’s formidable production goals, it might make good business sense to remedy the bottlenecks as firmly and swiftly as possible. And if that's the goal, what could be more effective than the good old rank and yank approach?

But to be fair, even the grandfather of rank and yank performance management, Jack Welch would say that this is approach is as much about employee growth as it is about assessment. And it is possible that Tesla's current performance management framework somehow marries the two. But with the layoffs still hot off the press, it may be awhile before they start opening up about their latest performance strategy.

Is Tesla’s approach good or bad?

It depends on who you ask.

If you defer to Tesla's current and former employees, some seem to accept that working for Tesla is a competitive and stressful environment. Others are less complimentary.

But for many, the prestige of having Tesla on your resume supersedes the downsides. One anonymous employee writes “having the opportunity to work for a company that is changing the world is exhilarating and rewarding.” But another reviewer warns “Tesla is a high-stress, fast-paced environment. People here work really hard and get things done. I wouldn’t say it is for everyone.”

It’s hard to say where Tesla's performance management process will go from here. For a company with such high aspirations, it’s clear that its employees hold the key to success. But how they attract and nurture that talent seems to be a moveable feast. As the new VP of People and Places, Kevin Kassekert, settles into his role, it will be interesting to watch how Tesla’s performance management evolves in the future.

More Inspiration

Tesla 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 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

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?

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

Continue Reading
7 Questions Managers Should Ask Unhappy Employees

Have you heard Richard Branson's latest business mantra?

The airline/clean-energy/galactic-tourism mogul insists that "‘happy employees = happy customers". And while this is exactly the kind of cloying HR advice we tend to see as a luxury exclusive to celebrity CEOs like Branson, research tells us this is one piece of advice that is surprisingly practical. How your employees feel can absolutely impact the success of your business.

According to a study by The University of Warwick, happier workers were 20% more productive. And on the flipside, Gallup reported that unhappy, disengaged employees cost the US economy over $450 billion per year. But we’re all human, and everyone has good and bad days. The real issue is, when left unchecked, employee unhappiness can spread throughout the team and wreak havoc on organizational productivity.

Never assume, always assess

Before we get to the questions, it's important to remember how easy it is to jump to conclusions about what's driving someone's behavior.

But what makes one employee unhappy, might not even affect another. Moreover, happiness isn’t a switch that gets turned on and off.

You need to take time to get to the root of what’s really going on. Does an employee feel unrecognized for their efforts? Is there a conflict with another member of the team? The problem may be completely unrelated to work, such as a family bereavement or relationship issue.

You can't know until you start the conversation.

Yes, it might be awkward. But there are few ways to approach employees without making them feel like you’re putting them on the spot. The first step is asking the right questions.

7 questions to ask the unhappy employee

1. How have you been feeling lately?

Sometimes addressing a problem head-on is the best way to start a transparent and open dialogue.

Plus, you never know. What indicates "unhappiness" to you may be nothing more than a couple of stressful yet fleeting moments for your employee. State what you've observed in a non-judgmental manner and ask the employee if your observation is correct.

For example: "I noticed you were a little curt in this morning's standup. How have you been feeling lately?"

2. What do you enjoy most and least about your work?

Knowing what makes your employee happy is just as important as knowing what makes them unhappy.

By asking the individual about both the good and bad, you're prompting them to not only vent about their issues (something they're probably doing a lot of anyway), but also to pause and think about how those issues stack up against the benefits — those aspects that they truly love but have been too stressed to acknowledge lately.

3. Do you feel recognized and respected for your work?

Research shows that receiving regular praise can lead to higher employee retention. But according to Gallup’s analysis, only a third of workers said they received recognition for doing good work in the past seven days.

It's also important to remember that what counts as "recognition" to one person, may not be viewed as respectful recognition by another. For example, introverts might dread public announcements while extroverts might see anything less as not being recognized at all.

Find out where and when the unhappy individual last felt that their work was recognized and tailor your performance management and rewards approach accordingly.

4. Are you doing the things you really want to do?

A BIG complaint from employees is that managers just aren’t interested in them.

If you want to build trust and maintain a good working relationship, you need to really engage with your employees. Find out what their personal and professional interests are. Are they happy with their career choices? Are there issues in their personal life that are holding them back? Do they have a passion and are they able to pursue it at work?

Once you build that rapport, you’ll be able to communicate with a greater sense of clarity and purpose because you'll know what awesome work means to them. Plus, you can address issues faster and more effectively when you're able to frame them within the context of what matters to the employee.

5. Do you enjoy working in your current team?

Cultural toxicity can be an employee happiness and productivity killer. And the higher up the ladder you get, the less likely you are to recognize it.

This question can help you explore the team dynamics on a deeper level. Does the employee get along with their teammates? Do they have friends? If not, why not?

Pioneering researchers like Christina Maslach have pointed out that, "Social relationships in organizations can be the most positive feature, while also being the greatest source of stress. When researchers go into organizations, they often think that workload will be the main problem. In fact, people often say they can do the job and handle the workload, but they cannot cope with the competitiveness, politicking, put-downs, back-stabbing, gossip, unfairness and lack of recognition."

It may feel like a Pandora's box, but until you find out what's really going on at the team-level, you'll be paralyzed in affecting any real change.

6. How can I make things easier for you at work?

Don't underestimate the role you play in your employees' lives.

Even for employees dealing with personal issues like parenting challenges, divorce, or even harmful lifestyle choices like addiction, can benefit from time-off, flexible working options or access to the right tools or counseling.

But if you genuinely want to help, you need to be willing to ask what you can do to support them. Be ready to offer specific suggestions in case they're too overwhelmed to know what it is that they need.

7. What does your ideal work scenario look like?

Is your working culture too prescriptive or totally lacking structure? Does your employee need to have more input into how they work and when? Maybe remote working sounded like a good idea but is actually making them feel detached and isolated.

Again, don’t make assumptions.

To find the right solutions, you need to work together with your employee. And if it feels like too much work, remember that by taking the time to show your empathy and support, you’re investing in a happy, productive future for everyone.

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Write Better Reviews With Our Performance Appraisal Cheat Sheet

If you want happy, thriving and committed employees, you need to give good feedback. And, when we say "good", we don’t mean unfounded praise for the sake of it.

What we mean is that you, the manager, put in time, effort and intentional thought into what and how to make employee reviews a valuable exchange.

Because according to the Society for Human Resource Management, 95% of employees are unhappy with the management of their performance reviews and 90% don't believe the process is reflective of the truth. Ouch.

The harsh reality is that far too many managers think they can just turn up for a performance review unprepared and rely on their subjective memory to carry them through. But that's an approach that time and time again has proven to result in biased, inaccurate and ineffective performance reviews.

But writing a meaningful review doesn’t have to be nearly as daunting as the business headlines make it out to be. Read on for a quick cheatsheet to help managers write better reviews in less time.

Managers, it's time to change your mindset

Today, most managers are about as loved as the office fax machine.

Unless they absolutely have to, employees would rather not engage. And if they're really honest, they're not even totally sure why they're there.

But like employees, managers have gotten a raw deal. They have mountains of paperwork to fill out, bureaucracies to navigate and they get very little feedback about whether their actions are helping or hurting.

So it makes sense that most managers would be tempted to rush through the first stage of writing up the employee review. After all, they've got to tick that box so they can move swiftly on to the next one. Problem is, if you don’t put in the groundwork, the result will be generic and useless.

The question for managers is this: Do you want to simply go through the motions, or do you want real progress for the individuals on your team?

Admittedly, some people just aren’t great at giving feedback — there’s definitely a skill to doing it well. But like any new skill, it’s something you can practice and develop. Instead of thinking ‘I can’t be bothered’ or ‘I don’t have time for this’ — change your viewpoint. A much more productive way to look at the process is to view it as a reflective exercise. One where you gather information with the express purpose of generating a meaningful dialogue and clear follow-up steps.

Set aside an hour (you honestly don’t need more) and write down the key points you want to cover, using your company mission, values, personal and departmental goals, and previous reviews as a rough guide.

And remember, it’s better to have something short and relevant than a 10-page review filled with pointless platitudes or irrelevant ratings. Here are some practical tips to keep in mind.

5 step cheat sheet to write better reviews

Step 1. Write with authenticity

Ask yourself, ‘How can I help this employee?’ Remember, your goal is to ensure that the employee walks away knowing what they did well and how they can improve. The more genuine you are, the more honestly and objectively the employee will view their own performance.

Cover things that went well and things that didn’t go so well. And don’t shy away from sensitive topics. Instead, tackle them in a way that encourages the employee's personal and professional growth.

Step 2. Call out success

It's a fact: Employees who receive praise and recognition perform better. Research reported in the Harvard Business Review found high-performing teams are nearly 6X more likely to focus on positive feedback than the average team.

Take a minute to think about your employee's biggest wins and strengths and provide real examples of how they impacted the rest of the team or the business at large.

For instance, saying ‘You’re a great team player’ gives the employee zero practical insights into what behaviors they should keep demonstrating at work. But if you give them a concrete example like, ‘When the team was short-staffed, you didn't hesitate to pick up the slack to make sure we were able to ship on time,’ they can then relate to the memory of the event and tell you more about what happened.

That's how you get better insights into what drives an employee to do their best work. And as a major bonus, the employee will walk away from the review feeling awesome about what they've accomplished.

Step 3. Be specific

If there's one single rule for writing better reviews, it's this: Avoid vagueness like the plague.

Common statements like, 'You have poor communication skills’ are as lazy as they sound. What does that even mean? Is the employee a poor writer? Are their presentations confusing? Have other team members complained about their interpersonal skills? You need to exemplify each comment clearly.

In this instance, you could write: “In meetings when you disagree with another person, you appear emotional and it’s difficult to finish the discussion.” This gives the individual a real-life situation they can either recall or imagine and, hopefully, relate to.

Then you can identify a solution: “When you have a point to share that you think will help the team, try to point out how it will impact the work itself so that everyone can see the big picture impact of your suggestion.”

Step 4. Keep it concise

Edit your review to remove any vague, verbose or played-out language.

That means avoiding overused terms like ‘good’ and ‘excellent’. Instead, see if you can bring in a few action words like: excels, exhibits, demonstrates, grasps, generates, possesses, communicates, directs and achieves.

Choosing better, more specific words is a powerful way to say more with less.

Step 5. Talk to other stakeholders

It doesn't always make sense to approach the employee review as a solo project.

Even if you're not integrating peer or 360 reviews into your performance management process, it can help to get feedback from other people to either confirm or discredit your assumptions about an employee's performance.

Ask for examples of when the employee did something well or when they needed extra help or support. This will make sure the written review is fully focused on the individual being reviewed, not the manager reviewing them.

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Performance Appraisal for Remote Employees - Top Challenges to Address

A successful performance management implementation enlists HR Professionals to set clear objectives, timelines, and have a thorough understanding of their workforce needs; which can be a difficult feat in itself. One variable that adds an additional layer of complexity is when the roll-out occurs across a decentralized office. A decentralized office can be any one of the following scenarios:

  • Several regional offices with varying cultures, management styles and workplace dynamics;
  • A contracting agency whose workforce includes both onsite construction workers and offsite administrators, both with starkly different job tasks;
  • Or, a company that has a high percentage of remote workers or workers that use co-working spaces.

According to Forbes, about 43% of employees spend some of their time working outside of the office and that number is only expected to increase. Regardless of the circumstance, the challenges presented with implementing a performance management system that accommodates the modern, dynamic, office environment may bring into question its efficacy or its necessity entirely, but it shouldn’t.

According to one leading food and beverage company, the performance review is, “the glue that holds an organization together across geographic, technical, and cultural boundaries.” Performance management is an integral component of a company’s organizational strategy. Without it, executives are unable to answer the ‘how’ before the ‘why’ when identifying their workforce needs.

PerformYard clients are no exception to the shift from the traditional office environment. Our Customer Success Team has first-hand exposure to some of the challenges imposed on their HR Leaders as well as solutions our clients have adopted, using our software’s capabilities in order to mitigate these problems. Here are the top  challenges and takeaways:

Challenge #1: Employees feel disconnected from their company’s mission.

They don’t see their daily work impacting the ‘bigger picture,’ leading to decreased productivity and accountability.

Solution #1: Manage off-site productivity the same way you manage on-site productivity, by having clear goals and accountability,

Before implementing your software, rather than asking “how will my performance management be able to enhance connectivity between our corporate and regional offices?” Instead ask, “Does my performance management allow for goal transparency and have an intuitive way for workers to track and update progress?” Instead of asking, “Can my performance management system accommodate a remote team tasked with only special projects?” Instead ask, “Does my performance management allow for me to set top company goals that departmental or individual goals can align to?” Adopting a top-down mentality that begins with clarity and transparency before moving to individualization is good starting point.

Challenge #2: Standardizing the reviews process seems nearly impossible.

Between having multiple HR people, various management styles, and different cultural norms, standardizing the reviews process seems nearly impossible.

Solution #2: Assign one person to oversee the software implementation from a corporate standpoint and have them train representatives from different entities so they can adopt their own methods as needed.

This person should should not only have the bandwidth to learn the software inside-out, but should also be willing to initiate frequent dialogue with local HR teams to ensure the software is used correctly adds value. In some ways, the solution here is similar to the first challenge, in that, the first step begins with high-level corporate approach. But the former does not effectively reach each worker.

Having a ‘performance management guru’ allows companies to create a standardized process as a foundation while empowering other entities to make tweaks and modifications that may be more suitable for their specific needs. Using this approach, local HR professionals can incorporate performance standards that are customary for that particular region.

Challenge #3: Employees feel left out of office dialogue.

The concept of ‘water cooler talk’ that once built office camaraderie and rapport is no longer prevalent.

Solution #3: Establish a method of communication that is frequent and informal where employees can interact with each other.

Even if your company uses other communication platforms like gchat, slack, or an internal system, using a feature directly from your performance software is useful for two reasons. First, studies show that remote-site workers require more frequent dialogue than those in the office to absorb new information and to help them feel aligned with the rest of the team. So in this instance, having additional channels of communication for specific work functions, is better. Second, using a feedback feature within your performance management software will establish a link between daily conversations surrounding performance and a more formal reviews process whether it be through a reporting function or otherwise.

With customization being the pinnacle of the PerformYard platform, our resounding answer to any performance management related challenge is that there is no one-size fits all solution. At a minimal, a successful implementation will involve the following: having your ultimate corporate objectives thoroughly established, a willingness to make tweaks and adjustments to accommodate varying processes, and a software management tool designed to do both.

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What is organizational alignment? And how to do it.

Organizational alignment, also referred to as 'strategic alignment', is a company's ability to get everyone on the same page about what needs to get done and how.

But importantly, it's also about a company's ability to paint the bigger picture and get every individual within the business to see themselves in it. Or, as organizational strategists Jonathan Trevor and Barry Varcoe put it in their HBR deep dive, organizational alignment is how you bridge "the gap between ambition and performance."

And if you're not hitting efficiency benchmarks or reaching your potential as an organization, you could have an alignment problem. But don't worry, there are ways to fix it.

Why is organizational alignment so elusive?

If getting your numbers back on track and fighting employee disengagement feels like an uphill battle, know that you're not alone.

Organizational alignment is an ongoing challenge for every business, regardless of shape or size. For example, investment tech startup Betterment changed their approach to organizational alignment and employee performance management three times on the road to reaching 100+ employees.

And since the beginning, massive household names like Starbucks have built their empires on organizational alignment systems in order to consistently hit growth targets and provide an awesome customer experience across some 25,000 stores in 62 countries.

With so many diverse individuals under one roof, true alignment is no small feat. But it's not impossible, either. Let's break it down to the core building blocks of a truly aligned organization.

Putting the pieces together

Companies with strong alignment know their goals, actions and purpose. Here's what that means.

Goals: What are we driving the business towards?

Regardless of whether you're using annual revenue goals or departmental OKRs, an aligned organization puts the proven growth metrics first and foremost.

Depending on where you are and what you want for your business, your goals can and should vary. For more on the core elements that make a goal effective, check out our breakdown here.

Actions: How will employees achieve those goals?

Some 95% of a company’s employees are completely unaware of or confused about the business strategy. And only 7% know what's expected of them in order to help achieve company goals.

Once you're clear on the tangible results you want to see, you owe it to your employees to give them everything they need to make those results happen.

Clarify the specific day-to-day tasks, actions and behaviors at the individual and team level that, when compounded over time, add up to high-level success.

Purpose: Why is it important to achieve these goals, with this particular approach

Cautionary tales like that of Enron and Wells Fargo show us that breakdowns in organizational alignment often occur when employees are incentivized by the wrong things.

State your mission regularly and your values clearly so that every employee knows exactly what are your business goals and the behaviors that help you meet them.

Keep trying

We all dream of spearheading the kind of organizations that make business history. Organizations where every last individual is passionately pulling in the same direction. But the truth is, business is messy, chaotic and fraught with change — and there's no magic formula that can ever make it otherwise.

But luckily, there are many ways to make sure that the above three performance points are always being met at every level of the organization. Cascading goals is a classic approach used by many — but even companies who reject the classic hierarchy (like Asana and their AOR model), can create an approach that makes sense for their unique business culture.

What matters is that you're willing to learn and adjust as you grow.

Because as tempting as it is to blame employees for angry customers or unmet targets, the reality is it's every leader's responsibility to be the guiding force that lights a clear path forward for the business, and everyone in it. After all, how can we expect employees to support a strategy they don't know exists?

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Performance Management Process Steps

Bulky, time-consuming and ineffective. The once ubiquitous annual appraisal has gotten a bad rap — and don't get us started on ratings.

We get it. Employees don't want to be told they're 'better than average, but not excellent'. And we know that 50% of millennials would rather receive meaningful feedback every month than sit down for an hour each December. For many HR leaders, it's clear. The annual review has to go.

But the question is: in exchange for what?

Continuous feedback? Weekly check-ins? Bi-annual reviews? Performance management can be the quintessential HR Rubik's cube if you let it. And while you probably do need to make some changes, those changes might not need to be as drastic as you think.

If you want to change your performance review process but aren’t sure how, here are five steps to help you find a better way.

1. Find out who you are

The number one reason companies stay stuck in an outdated performance management process is perfectionism.

HR leaders become attached to an image, idea or industry case study that made a lot of sense for someone else, but might not be relevant for them. When it comes time to buckle execute on that big idea, the process quickly becomes muddled and eventually stalls out.

But every company has its own unique DNA.

So before you embark on a system change-up, take time to identify who you are as a company.

For instance, if you have a hierarchical structure with highly skilled professionals, many of whom do a similar job, you might have a cultural need to boost employee engagement and motivation. In contrast, a small company with a flat structure of specialist employees all working on different things may need to focus on how they measure performance fairly and consistently across small but diverse teams.

Give yourself permission to do this your way. The performance management process can at should look different at every company.

2. Define your purpose

Once you're clear on what your business is really about, have a good think about what you need your performance management process to accomplish.

In other words: what's the purpose of your performance review?

Is it to increase employee skills or foster greater accountability? To boost engagement or is it there to simply justify salary decisions? Be honest.

If you want your performance management process to produce meaningful outcomes, you need to define why you’re doing it.

For example, there’s no point asking managers to review employees biannually when they work on a monthly project cycle. In a case like that, it would make more sense to have a more regular review schedule while introducing some less formal elements to address issues when they arise.

3. Know your performance management building blocks

Want to know a secret?

This performance management stuff isn't as complicated as it sounds.

It all boils down to 3 simple elements. Once you know those, it's easy to come up with an arrangement of those blocks that makes sense for you. For instance, Asana has an end of the year self-review that it combines with a biannual review, while the video game company Valve has a 360 system where teams of employees conduct performance interviews with everyone in the company.

Here are the 3 simple building blocks every performance management process has in common:

Reviews — Does a formal or informal approach fit better with your company culture? How often do you want to review your employees (annually, semi-annually, at the end of every project)? Who else do you need to hear from (self-appraisal, manager, peer-to-peer)?

Goal Setting — What types of goals will you set? Can you connect individual goals to the company's overarching vision? Have you created an opportunity for employees to include their personal goals?

Feedback — Where in your organization's work streams is it easiest and most natural to provide employee feedback? How do your employees want to receive feedback (in a one-to-one meeting, regular check-ins or through 360-degree-feedback)?

4. Don’t rush it

Rome wasn't built in a day, and you better believe your perfect performance management process won't be either.

Sure, HR case studies make it look easy but for some companies, it can take years to implement a new process. Managers and employees need time to familiarize themselves with it and they need a well-thought-out argument for why they should change in the first place.

So start with small steps like changing or removing appraisal questions, feedback methods or resetting the cadence for your reviews. Some of the most impactful change happens incrementally. You could even start by simply taking a much a smaller version of your current appraisal and executing it four times a year to test the waters.

5. Revisit, refine, repeat

Performance management is a moving target.

Finding an approach that works for your company means getting some things right and some things wrong. You have to be brave enough to take that leap and find what works for you. Create reflection points where you can assess what's worked, what hasn’t and how to remedy it.

And whatever you do, don’t be fooled by thinking you need to create the perfect process, especially if it takes you away from your true purpose for performance management at your company.

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Examples & Questions for an Upward Performance Appraisal

Upward feedback, a.k.a. asking employees to review managers, can help you create the kind of feedback-rich culture that makes big things happen for your business. And not only that, it can also help squash some of the nasty, business-killing side effects that come as a result of bad bosses.

How to structure your upward performance review

Regardless of whether you're evaluating employees or managers, most performance appraisals will include a healthy mix of ratings and open-ended questions to keep the feedback clear, specific and relevant.

Most upward appraisal forms will include anywhere from 3 to 20+ ratings-based statements and another 2 to 5 open-ended questions to collect feedback verbatim.

Let's tackle the ratings section first.


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Part 1: How to rate leadership competencies in upward reviews

The first thing to know about ratings is there's a right and wrong way to use them in performance reviews. Upward reviews are no different.

If you want to use ratings fairly and effectively, start with a system that's simple, clear and based on behaviors — not vague metrics or subjective personality traits. First, choose the manager competency or characteristic you want to evaluate, then construct your rating statement.

Ratings for measuring a manager's ability to coach and lead

According to leadership consulting firm The Ken Blanchard Companies, the average organization loses up to $1 million dollars per year in missed opportunities due to sub-optimal leadership.

With the right questions/ratings statements, your upward appraisal can help identify opportunities to coach the coaches within your organization and make sure everyone from top to bottom is getting the support they need to do their best work.

Example statements

My manager gives me actionable feedback on a regular basis

My manager's feedback is clear, direct and empathetic

My manager always follows feedback with a suggestion for how to improve

My manager assigns stretch opportunities to help me develop in my career

My manager's feedback is objective and backed up by clear examples

My manager listens to feedback and takes action on it

Ratings for measuring a manager's commitment to a specific business value

Most performance headaches usually boil down to a misalignment between manager expectations and employee behavior. But if a manager isn't exemplifying the company's core values, you can bet your employees won't either.

An upward performance appraisal is a great way to go deeper on a specific competency that aligns with one of your key business values. For example, if a culture of transparency and open communication is central to the way you run your business, you may want to create specific ratings statements geared specifically toward that.

Example statements

My manager is always ready to hear me out

My manager is a good listener

My manager cares about my feedback

My manager takes action on my feedback

Google’s upward feedback survey is a stellar example of how to ask about a manager’s leadership skills in addition to their company-aligned strengths that support the overarching cultural values. Google gives 13 quantitative, strongly disagree to strongly agree statements that cover eight behavioral goals for managers:

  1. Be a good coach
  2. Empower your team and don't micro-manage
  3. Express interest in employees' success and well-being
  4. Be productive and results-oriented
  5. Be a good communicator and listen to your team
  6. Help your employees with career development
  7. Have a clear vision and strategy for the team
  8. Have key technical skills, so you can help advise the team

If you take some time to lay out the core behavioral values that make up a great leader at your org, your rating statements will essentially write themselves.

Ratings for measuring a manager's progress on a short-term goal or initiative

Finally, ratings are also a great way to track short-term improvement.

For example, if you want to get a read on the progress of a particular change management initiative, let's say an internal campaign to support greater diversity and inclusion (D&I) in the workplace, you could include statements like the following.

Example statements

My manager clearly explains how change will impact the team

My manager is transparent about the role of bias in the workplace

My manager seeks feedback from diverse groups of people

My manager keeps the work environment inclusive by respecting the team's scheduling needs

Part 2: How to collect upward feedback using open-ended questions

As with ratings, open-ended questions can be used to support any number of goals, values or change initiatives within your company.

Using the above example of measuring a manager's progress toward a D&I goal, you could ask open-ended questions like:

  • What specific steps does your manager take to ensure that everyone on the team is heard?
  • How comfortable do you feel voicing your ideas to your manager?
  • What are some possible ways your manager could help you achieve greater work/life balance?

The open-ended section of your upward appraisal could also take the form of statements as opposed to questions, for example:

  • Tell me about a time your manager personified one of your company values.
  • Describe one way your manager exemplifies the company culture.

Now, the way you'll phrase your statements and questions will depend on who's asking.

And it's important to know that there's some debate on the validity of making upward feedback anonymous. Proponents of the anonymous upward review say it encourages honest feedback and protects employees from retaliation from bad bosses. Critics argue that anonymous appraisals are rarely truly anonymous and thus can lead to a toxic working environment.

But if you're here, we're guessing a feedback-rich working environment is high on your list right now. If that's the case, creating at least one part of your system that's completely dedicated to encouraging direct feedback between managers and employees is an important step.

Here are some questions managers can use to solicit feedback directly from employees.

  • What concerns do you have when it comes to giving me feedback? What can I do to alleviate those concerns?
  • What's your favorite way to receive feedback and recognition for your work?
  • What are three things could I do to make your work easier and more fun?
  • What's most helpful thing I do to help you complete your work?
  • What's the least helpful thing I do?

A few things to keep in mind

Unfortunately, nothing in the sticky world of talent management is ever as simple as copy/paste. If you're new to the idea of upward feedback, there are some potential roadblocks to look out for.

  • Know your goal - No two upward review forms should be the same. At Google, the upward review is there to gauge the manager's ability to communicate as part of its wider goal to support the goal of creating a feedback-driven culture. The review has no connection whatsoever to performance or compensation decisions.
  • Rating the wrong things - Ask employees if the leadership competencies you laid out really make sense for the type of work they do in each department. Measuring managerial-level product engineers on their ability to be a team player may or may not be necessary at your company. Only rate what's necessary.
  • Anonymous or attributed - In many organizations, employees are afraid to let their manager know what they really think, resulting in skewed feedback and bad data. If you think this might be the case in your company, you may want to consider using an anonymous review for at least some parts of your upward performance management system.
  • Get your managers ready - Whether it's your leaders or your employees, every human being in your organization has a right to know why and how they'll be judged. Take time to explain the benefits of the upward review — securing that buy-in will pay back tenfold down the road.
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How To Create a Feedback Culture

Every business leader wants the kind of company where each and every employee feels like they have skin in the game. Where lightning-strike ideas turn into multi-million dollar revenue streams.

For most of us, it's a vision that just doesn't feel real.

Despite the myriad business books, scholarly articles and flowery Forbes editorials, the idea of a 'feedback culture' just doesn't feel viable at our companies — and we all have our "reasons". You can blame it on the industry, the economy or the team itself, but whatever the reason (or cough, cough excuse), you're sure this stuff won't work for you.

But what if it weren't really that complicated? What if the transition to a can-do culture were as simple as asking a question?

The need for feedback won't go away

The annual review is the proverbial dead horse of HR topics. And our obsession with it is understandable. As humans, it's natural to crave a magic pill. Our brains want a simple solution that's easy to follow: give your employees feedback at this specific time and place each year and solve all your business problems.

But the truth is this: There's no stone-set rule stating there has to be a separate time for giving and receiving feedback.

At its core, performance management is shockingly simple. It's an ongoing exchange of feedback. A two-way street that's always open. Call it "continuous feedback." Call it building a "feedback culture." Call it whatever you want. What matters is that it's an intentional dialogue — one that spurs people into action.

Like it or not, your company already has a performance culture. And the feedback you're giving (or not giving) could be speaking louder than you realize.

The thing about negative feedback in a group setting

A simple way to get past the analysis paralysis and start building a culture where 'feedback' isn't a dirty word is to get clear on when and how to deliver negative or corrective feedback.

One standout example of a company built completely on the value of candid, team-centered feedback is Pixar.

Pixar President and co-founder, Ed Catmull ran the company alongside Steve Jobs and John Lasseter for decades. Here's what he has to say on the importance of open dialogue.

"A hallmark of a healthy creative culture is that its people feel free to share ideas, opinions, and criticisms. Our decision making is better when we draw on the collective knowledge and unvarnished opinions of the group. Candor is the key to collaborating effectively. Lack of candor leads to dysfunctional environments. So how can a manager ensure that his or her working group, department, or company embraces candor? By putting mechanisms in place that explicitly say it is valuable."

Candor is a value held so tightly at Pixar that Catmull and his team created an elite collective feedback team called Braintrust. Braintrust is what Catmull describes as Pixar's "primary delivery system for straight talk". Every few months the team gets together to discuss the movie they're making and get clear on what works, what doesn't work, and why.

Sounds great, right? But here's where it gets hairy.

Business legend has it that Steve Jobs got some of his best ideas from his time working in Pixar's open and creative environment. (Some even credit his groundbreaking "Think different" campaign to the creative storytelling skills he learned while working there.)

But Jobs also had a nasty habit of giving harsh corrective feedback in a group setting — like the time he fired the head of Apple's MobileMe unit in front of a crowd of Apple employees. Group dialogue can be a powerful productivity tool — but only if you're clear on the ground rules.

How to talk about performance as a team

First, know that there are some key moments when it's absolutely critical not to give feedback.

  • When your feedback is more personal than professional
  • When creativity and autonomy matter more
  • When the failure speaks volumes
  • When you just don't have the patience

You can explore each of these circumstances in more detail here, but you get the gist.

If someone makes a mistake and doesn’t know it, that isn’t the time to have a team discussion about collective improvement. Your employees can read between the lines. So don't underestimate them.

Here are some better ways to start and maintain a performance-focused dialogue.

1. Use questions, candor and curiosity

HR leading companies like Asana use questions to help guide conversations, coaching and team-based decisions.

Asking questions, rather than prescribing answers, is a great way to both give and receive constructive feedback in a way that balances the positive and negative and keeps the dialogue focused on finding solutions.

2. Offset negative feedback with peer-to-peer recognition

Peer-to-peer recognition strengthens team unity and gives everyone a stake in the game. And as a major bonus, 41% of companies that use peer-to-peer recognition have seen positive increases in customer satisfaction.

3. Collect upward feedback

Last but not least, show your commitment to the importance of feedback by truly making it a two-way street. Companies like Google have developed a super smart way of approaching upward feedback, but if you just want a simple approach, try the SKS model which simply asks:

  • What should I stop doing?
  • What should I keep doing?
  • What should I start doing?

In a performance-driven culture, feedback is always about a team coming together to improve their performance as a whole and never about what one or a handful of individuals failed to do. Keep your eyes fixed on the bigger picture and your team will do the same.

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The Science of Performance Management

How often do you hear phrases like 'she's a natural athlete' or 'he's a gifted designer'?

Behind these common expressions, there's a hidden assumption that some of us are more talented than others. But is that true? Is the secret to high performance really just natural-born talent?

Or is performance something we can nurture within our environment? In June 2017, when Alex Honnold made history by becoming the first person to climb to the top of El Capitan without ropes safety gear, the internet was buzzing with speculation over these very questions. What was it that helped Alex accomplish this extraordinary feat? Was it physical aptitude, natural climbing talent or sheer mental will?

HR teams are considering the science more than ever when they design modern performance management strategies. And according to the research, the drivers behind an Olympic goal medal and a Nobel Prize is actually very similar. Let's take a look at what some of the brightest minds in business science have discovered about the "secret sauce" of great performance.

What do we know about human performance?

Our quest to understand human performance has intrigued scientists and psychologists for at least a hundred years.During the first half of the 20th century, the labor market was rich in human capital. With plenty of workers at their disposal, employers needed a way to discern between good and bad performance (or in more direct terms, who to keep and who to fire).

But it wasn't just employers who needed help classifying talent. During the First World War, the US military had so many recruits, they needed a quick way to identify poor performers and select stellar soldiers. They designed the first recorded merit-rating system to achieve that aim. By the 1990s the McKinsey War for Talent Study pointed a spotlight onto a fast-changing labor market. A shortage of talent due to the departing baby boomer generation was driving demand for a more sophisticated understanding of performance and reward systems.

This sparked a kind of "performance management golden age" in psychology and organizational theory that shaped our current thinking about performance management.

Meet the theorists behind modern performance management

Douglas McGregor — The Human Side of Enterprise

In 1960, Douglas McGregor penned his well-known Theory X and Theory Y. Together, these two theories clarified the differences between the key management styles of the time.

The authoritarian management style, Theory X, dominated business in the first half of the 20th century. The focus was on productivity, accountability and recognition. It assumed that when left to their own devices, workers will inevitably slack off. Under Theory X, managers were expected to control employee output through rewards and rankings.

In contrast, Theory Y defined a management approach that seeks to support employees. Rather than the classic carrot and stick routine, leaders who subscribed to Theory Y believed that employees genuinely want to perform well. Under this theory, it’s up to managers to develop and nurture this commitment in order to help employees reach their full potential at work.

Abraham Maslow — The Hierarchy of Human Needs

The influential psychologist Abraham Maslow is best known for his motivational theory The Hierarchy of Human Needs, often shown as a five-tier pyramid.

Each level, starting at the bottom must be satisfied before you can move up. Maslow outlines human needs in the following order, bottom to top: physiology, safety, love, belonging and finally, self-esteem and self-actualization in the top spot.

Until this point in the history of performance management, psychology only focused on curing mental illness. No one bothered to investigate people who were mentally healthy. This piqued Maslow's curiosity. He noticed a correlation between healthy people and increased states of being that he named 'peak experiences'.

Today, the entire field of positive psychology, made up of theories that focus on human strengths rather than weaknesses, is grounded in Maslow's work.

Peter Druker — Father of Modern Management Theory

With self-actualization now pinpointed as the holy grail of human performance, management consultant and author Peter Drucker set out to develop a framework that would help managers lead their employees to the top.

In 1954, Drucker argued that employees should have access to learning and development opportunities equal to those of managers and business leaders. And at the time, this was a radical position. Until this point, the biggest names in organizational theory had presented employees as subordinates whose only real job was simply to do what they were expected to do.

Fun fact: Drucker is also the brains behind SMART goals and the term "knowledge worker."

Mihaly Csikszentmihalyi — Reaching Flow for Peak Performance

In the 1970s, pioneering psychologist Mihaly Csikszentmihalyi conducted one of the largest psychological studies ever in human performance. As part of the study, Csikszentmihalyi interviewed individuals across all ages, genders and ethnicities about their performance.

He spoke to Japanese teenagers, Navajo farmers, athletes, chess players, dancers and factory workers to name a few. The result was fascinating. Regardless of their background or career, they all described experiencing a sensation they called ‘flow’ during peak performance.

In the 1990s Csikszentmihalyi utilized these findings to fully develop his theory on happiness, considering the two completely interlinked. He defined flow as the experience a person has when they are "completely involved in what he or she is doing." In the example of a musician, Csikszentmihalyi explained: "If you are playing a musical instrument you know what notes you want to play, every millisecond.”

A person performing under Csikszentmihalyi's definition of flow, reaches maximum productivity almost effortlessly and feels great as a result.

Steven Kotler — Decoding the Science of Ultimate Human Performance

Steven Kotler took the concept of flow a step further with his Flow Genome Project.

Kotler is often described as one of the world’s leading experts on human performance. He calls flow the “optimal state of consciousness where we feel our best and perform our best.” He explains that when we're in a state of flow “all aspects of performance both mental and physical go through the roof.”And according to a 10-year study conducted by McKinsey, Kotler's theory holds water. The study found that senior employees were up to five times more productive when performing from a state of flow. The bad news? The study also found that the average employee spends only 5% of their overall time in flow.

Just imagine the impact of increasing this to even 15 or 20%.

But how can you create flow in the day-to-day? According to Kotler, flow happens more often if you surround yourself with novelty, complexity and unpredictability.

The ‘fail forward’ ethos is one example of how companies can alter their culture to encourage more flow at work. For example, Google asked employees to deliver ten times more improvements, rather than 10% growth. By saying ten times instead of 10%, they're opening the door to radical new ideas rather than simply trying to optimize the status quo.

What's really happening in a high-performing brain?

These are the theories, but what about the science behind the theories?

Let’s take a quick look at what happens to the human brain during performance.

Neuroscience tells us that the human brain is malleable. It can adapt to its environment, creating new neural pathways and thinking patterns. Our flight or fight response is a perfect example of this.

The stress question

Discovered by physiologist Walter Bradford Cannon at the beginning of the 20th century, flight or fight response asserts that when humans perceive a threat, adrenaline is released in the brain causing an increase in our heart rate and often making us feel sweaty or even nauseous. The idea is we'll either stay and fight the threat or take off running.

Thousands of years ago, this physiological response gave us a life-saving biological advantage when faced by hungry tigers and other prehistoric dangers. But in the modern world, our threats are much more minor. Today, it's mostly things like public speaking, deadlines and of course, performance reviews that tend to make us sweat.

So how does this impact our performance? Does a shot of adrenaline speed us up or burn us out? A study by VitalSmarts found that 83% of leaders and 77% of workers say that top performers have less stress, confirming that increased stress and pressure does not lead to increased performance.

Why a slow brain is a good thing

Thanks to technological advances like brain imaging, we can now map the brain patterns of high performers to see what's really happening in there.

Historically, many theorists believed that during peak performance our brain usage actually increased and went into hyper mode. But actually, the human brain slows down and becomes hypo during peak performance. The pre-frontal cortex, the area of the brain responsible for our inner chatter and sense of time, gets essentially switched off in a phenomenon that neuroscientists call transient hypofrontality.

That's why when a person is deeply focused on completing a task, they seem to make decisions almost automatically. If your inner voice of self-doubt is activated, you become distracted and lose focus.

The answer to the question what makes one person perform better than another is anything but straightforward. The research shows us it’s a complex interplay of internal and external factors and unfortunately, there's no magic formula for getting it right. But one thing we do know is that given the right set of circumstances, support and mindset, we all have the ability to do great work.

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How Regeneron Built Their Performance Management System

Have you ever looked up from your day to day and realized there's no rhyme or reason to your performance management process?

Sure, you have all the ratings, weightings and paperwork in place. But what if it all amounts to nothing more than an administrative exercise?

This was the situation Michelle Weitzman-Garcia found herself in when she joined Regeneron Pharmaceuticals in 2015 as Head of Workforce Development. From the get-go, it was painfully clear that Regeneron's performance management system was in need of an upgrade. Managers hated it, and so did employees.

Fast forward to 2018, Michelle and her team have redesigned Regeneron's performance management process and the global biotech company has doubled in size. They have kept pace with that breakneck speed of growth and secured a 92% participation rate in the company's performance management process.

Here's how she did it.

Transforming performance management from the bottom up

Regeneron Pharmaceuticals develops life-changing medicines for patients with serious diseases. Founded in 1988, the company started with a small team guided by two core principles: hire the smartest people and do great science.

One of Regeneron's largest performance management challenges is that their business units do radically different work.

From drug development, corporate functions and product supply — they needed a flexible performance management system that could match the needs of their diverse workflows. For example, it can take a new drug up to 20 years before it's market-ready, but a marketing and sales plan for the same product might only take a few months to organize.

Each business unit needed its own customized approach. Figuring out what exactly that should look like was the first challenge Michelle faced.

She embarked on a three-year intensive redesign of their entire process, And she started by asking each unit of the business what they thought performance management should be.

Goodbye Ratings: a focus on simplification

One of the first things Michelle learned was that Regeneron's original performance management system was complex and antiquated. Structured around an intricate 12-point rating scale, it was also immensely confusing for managers.

Michelle reduced the rating scale to 4-points to make the process faster and easier. "There's a very strong consideration given to making sure that we're not taking time away from our scientists to do HR things, so that they can spend more time doing science and being more creative," she explains.

Armed with this feedback, Michelle and her team created four different review forms, including a traditional structured form for the R&D team and a 30/30 process (every 30 days employees get 30 minutes of feedback) to completely replace the appraisal process for the product supply team.

In 2016, Michelle and her team eliminated the rating scale for half of the company and each year they continue to scale down. As of today, less than 10% of the company uses ratings.

"The benefit we found of not having a rating is that it opens up more authentic conversations between managers and employees," says Michelle. Regeneron still uses compensation ratings behind the scenes, but they're working to separate that from the performance management process altogether.

Replacing goals with behavior-focused feedback

Rather than setting corporate and individual goals, managers at Regeneron talk about performance targets in terms of "what you need to accomplish."

According to Michelle, "It's really about teaching them about behaviors and performance. You can't have one without the other." Employees are asked to think not only about what they got done, but also how they got it done it. This shift in focus empowers engaged conversations about employee behavior, rather than focusing exclusively on how much they'll be paid.

Michelle and her team also introduced mid-year calibrations to hone in on performance and behaviors. For this, she uses a 9-box model with Results on one axis and Behaviors on the other. This shows her a full picture of how employees live up to both expectation and goals, all the way from "Exceptional Results, Inconsistent Behaviors" to "Inconsistent Results, Exceptional Behaviors." Behaviors are composed of important competencies and are defined at the local or departmental level.

Regeneron also does an annual calibration and discussion, and employees across departments are offered the chance to participate in voluntary mid-year discussions. Additionally, Michelle implemented a learning and development framework to help give more clarity to an individual's career planning and steer conversations around performance.

Would this approach work for you?

In 2016, 92% of Regeneron's employees were participating in the performance management process.

So, would Michelle's approach work for you?

The answer is probably yes. A bespoke performance management approach can do wonders for employee participation and engagement. But it's important to remember, change doesn’t happen overnight. And your managers and employees won’t thank you for rushing through a new process, only to discover a few months later it’s actually created more work.

If your goal is to abandon the old ways and create a custom-fit process that works, the unsexy truth is that it will take time. By allowing themselves three years to implement a new performance structure, Regeneron took the time they needed to do three core key things.

  • They objectively reviewed their existing process.
  • They clarified the purpose of their new performance management strategy.
  • They made space for future iterations and feedback from managers to help get it right.

And they haven’t stopped. Regeneron's process will continue to evolve, just as the company does.

More Inspiration

Regeneron 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?

How Does Asana Do Performance Management?

How Netflix does 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

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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4 TED Talks on Performance Management

Everyone loves a good TED Talk.

World-renowned experts sharing cutting-edge ideas in a bite-sized format — there's really no better (or quicker) way to get inspired.

And for performance management, a little inspiration in the form of a beautifully original idea is often just what we need. After all, there is so much NOISE out there. It can be hard to steer through the jargon and find a voice that can tell you clearly and simply why this stuff matters.

Luckily, we found four of those voices. So whether you want to be an HR trailblazer, or simply a better manager— sit back and be inspired.

1. The Puzzle of Motivation by Dan Pink

Watch time: 18 minutes

There’s a mismatch between what science knows and what business does.”


The Puzzle of Motivation by Dan Pink is one of the most popular TED Talks of all time.

What Dan will teach you about performance management:

This video, released in 2009, became part of the performance management canon because it flies in the face of the traditional ‘carrot and stick’ approach which, Dan points out, is actually pretty detrimental to business outcomes.

According to Dan, there's a 40-year-old body of expert evidence proving the classic reward incentives don’t work. Not only that, they're counterproductive. Dan's big idea is based on what he calls ‘intrinsic motivation’ — the desire to do things because they matter, not because we’ll be paid more.

Dan lays out a new business model based on three essential components for employee success: Autonomy, Mastery and Purpose. If you can come up with creative ways to use these tools, you can make your employees feel more motivated than money ever could.

One way to nurture greater autonomy at work is to rely on your performance management process to check in regularly, but not too regularly. When you get the timing right, you reduce your risk of falling into a culture of micromanagement.

The can't miss moment: minute 9:00, hear Dan explain why reward incentives simply don’t work.

2. What Makes us Feel Good About our Work by Dan Ariely

Watch time: 20 minutes

“Ignoring the performance of people is almost as bad as shredding their effort in front of their eyes.”


Chances are you’ve seen that quote before. It has made appearances in almost every HR publication on the internet — and for good reason.

What Dan will again teach you about performance management:

In this TED Talk, world-renowned behavioral economist Dan Ariely dives deep into the relationship between motivation, meaning and productivity. By taking us through a series of experiments, Dan demonstrates just how important meaning is in our working lives. And all too often, it's the missing piece.

Dan presents seven key principals that underpin employee satisfaction: Meaning, Ownership, Creation Challenge, Pride and Identity. And the other six principles are just as important as meaning (seriously check this one out!).

In one simple example of how to help employees develop a sense of ownership, take a look at how prototype optics manufacturer Optimax uses peer reviews. Under the right circumstances, peer reviews can not only help identify areas for development, they can also help your team feel a sense of collective support for your performance management process.

The can't miss moment: Minute 13:20, Dan's clever ‘instant cake’ anecdote, which outlines his theory that the more effort we put into a task, the more meaningful it becomes.

3. The Happy Secret to Better Work by Shawn Achor

Watch time: 9 minutes

“It’s not just the reality that shapes us but the lens through which your brain views the world that shapes your reality.”


In this immensely enjoyable talk, Shawn Achor takes us on a fast-paced journey into the science of happiness.

What Shawn will teach you about performance management:

According to Shawn, the old formula for success — ‘If I work hard, I’ll become more successful and I become more successful, I'll finally be happy' — is broken. Believe it or not, this broken belief system is more a recipe for unhappiness than anything else. That's because our brains are conditioned to constantly move the goal posts. For instance, an employee gets a promotion, but rather than being happy about it, they end up obsessing over hitting the next step on the ladder. And on and on it goes.

By switching into a present, positive mindset, employees and managers can experience what Shawn calls the ‘Happiness Advantage.’ With this performance power tool, employees can essentially harness the happiness hormone, dopamine, to become smarter, faster and more successful at work, without stressing out about it.

In your employee reviews, there are always questions about what’s gone well. But if you really want to tap into the 'Happiness Advantage', you need to narrow down the focus to what's good about the present. One way to do this is to simply ask employees what aspects of their work they feel the most grateful for.

The can't miss moment: Minute 9:20, Shawn explains the 'Happiness Advantage' in detail.

4. Forget the Pecking Order by Magaret Hefferman

Watch time: 15 minutes

“Companies don’t have ideas only people do.”


With that statement, Margaret Hefferman poses a radical idea: it’s not leaders that save the day but the team.

What Margaret will teach you about performance management:

She argues that the bonds and trust we develop with each other is a key driver of outstanding employee performance. Yet many companies ignore this. Leadership has been conditioned to create a competitive environment that values the "stars" rather than the group.

For those of us who see the importance of social cohesion at work, we often we assume it'll happen organically. But it doesn’t. (After all, anyone who's ever worked in an open plan office can tell you it's no guarantee of camaraderie.)

So how do you overcome this age-old culture of competition?

A great starting point is to encourage peer-to-peer recognition. For instance, the healthy snack delivery company Snacknation has ‘crush’ Friday, where employees are encouraged to publicly praise each other by simply calling out someone on the team who's really "crushing it". And it doesn’t matter if it’s for finishing a massive project or simply a small act of kindness. All crushes count.

The can't miss moment: Right at the start, hear Margaret talk through ‘the super-chicken model.’ It's pretty great. 

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360 Reviews: Self, Manager, Peer and Upward, which ones do you really need?

For most organizations, performance management isn't as linear as it seems.

To really get a grasp on employee performance, you need a variety of feedback models for both employees and managers. But with so many tools in the employee appraisal toolkit, which ones do you use to get the job done?

Here we take a clear look at what a self-review, manager review, peer review and upward review can accomplish in a performance cycle, using the hypothetical case of Jane, the Director of Finance. Let's pretend it's time to evaluate Jane's performance. Read on to find out which types of reviews you might use.

The Self-Review

What is it: The self-review is exactly what it sounds like. This self-discovery piece of the performance management puzzle usually shows up in the form of a brief survey asking an employee a series of general questions about their contributions over the course of the year and what the company can do on its part to help them perform better.

When to use it: It's usually used as part of a performance review process, not a stand-alone review. At many companies, employees are asked to complete a self-review as a way to prepare for their year-end annual review.

How to use it: Though self-reviews are most often used as a way to pave the path for an individual's annual appraisal with their manager, they can also be a great way to help get clarity on a role that may have changed over time. For leaders and managers they can help you identify job/scope creep, keep your finger on the pulse of employee engagement and uncover innovations that might have otherwise stayed siloed.

Do you need it?

Using our example of Jane, the Head of Finance, you might want to consider asking her to complete a self-review if you've noticed a drop in some of her standard KPIs. If Jane has traditionally been a reliable performer, the issue might be that changes in the business, market or regulatory landscape have drastically or incrementally changed the amount and/or type of work she's required to do each day. This will also help focus your appraisal around any aspects of Jane's role that might not be a fit for her personality and could be damaging her level of engagement on the job.

A self-review can be a great way to help Jane prioritize and develop a plan for her future growth. But be careful. You must be ready to follow up on the feedback received in a self-review, otherwise, you could risk losing her for good.

The Manager Review

What is it: The manager review is the classic review most of us think of when we hear the words, "employee appraisal." This is where a manager or supervisor assesses, using questions, ratings or a combination of both, the performance of an individual employee over a specific period of time.

When to use it: The manager review has traditionally been a year-end occurrence but with the rise of continuous feedback, many companies, including household names like Adobe, GE, Deloitte and Microsoft, have incorporated real-time, project-based and quarterly reviews.

How to use it: The way you use the manager review will have everything to do with your unique size, shape and ethos as a business. While it's true that companies of all sizes are shifting away from annual appraisals, many are still keeping the annual manager review and simply integrating more feedback during the year.

Do you need it?

As flawed as manager reviews are, research shows they're still the most accurate type of review available to us. But the results you get are all about how you use them.

Research shows that 43% of highly engaged employees receive feedback at least once a week. So if Jane's feeling disengaged because of an overwhelming workload or because she hasn't heard any feedback (positive or negative) for weeks or more, you might consider introducing a quarterly review that fits the rhythm of her work in finance and then follow that up with weekly or biweekly informal check-ins guided by the outcomes of those reviews.

The Peer Review

What is it: The peer review is an appraisal that asks an employees' co-workers to provide their feedback on an individual's performance, skills, competencies or attitude.

When to use it: Similar to the self-review, the peer review is usually used to provide guidance for the manager review, rather than act as a replacement. Peer reviews can help managers get a fuller picture of an employee's strengths and weaknesses, and potentially offset bias. (Though peer reviews can often end up biased in favor of the most popular employees.)

How to use it: While self-reviews and manager reviews are often seen as a staple, the decision to use peer reviews isn't always taken for granted. The way you incorporate peer reviews will have a lot to do with the overarching goal of your performance management strategy and unique company culture. For example, at prototype optics manufacturer of Optimax, peer reviews are used to assess skills and identify areas for improvement, while at Google, peer reviews are an essential element of upholding culture (e.g, "Do the right thing" or formerly, "Don't be evil").

Do you need it?

If you feel you need a wider view of Jane's performance, including how it could be impacting the working culture and vice versa, a peer review (or series of peer reviews) can give you that perspective.

The Upward Review

What is it: There's a growing body of evidence supporting the idea that feedback should go both ways. Companies like Google give employees that chance by letting them rate their bosses in an upward survey.

When to use it: Similar to the peer review, upward reviews work best when you have a culture of transparency and trust to support it. In these cases, you can use the peer review as part of your standard review process or as a supplemental review to help guide your top-level performance strategy. At Google, the upward review is issued on a semi-annual basis.

How to use it: With a growing emphasis on the impact of bad bosses, it can be tempting to jump on the upward review. But like all reviews, the upward review comes with its share of pros and cons. As a general rule, aim for a mix of specific quantitative and qualitative questions and make sure your managers know its coming.

Do you need it?

If it turns out that what Jane really needs is a little help learning how to be a better leader, you might lay out a growth plan that includes some learning and development in this area. From there, you can let Jane know about the benefits of upward feedback and see how she'd feel about using an upward survey with her reports. If she and the rest of the team are fully bought in, it could be a great way to track a game-changing cultural shift.

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4 Common Reasons Performance Management is Broken

Ask the HR critics and they'll tell you, the future of performance management has been hanging in the balance for quite a while now. Clickbait headlines like, "The Annual Review Is Dead" and "15 Reasons Your Employees Hate the Performance Review" hit a strong note with those of us who know there are improvements to be made.

But the truth is, there will always be a need for a system of checks and balances to help employees be their best at work. As humans, we just care more when we know where we stand. In fact, in one survey 92% of employees that negative feedback is effective at improving performance (that is, if you deliver it well).

Love it or hate it, performance management is here to stay. But that doesn't mean you need to rip out and replace your entire system. More often than not, a couple small tweaks is all it takes to get your existing process back on track.

Let's take a closer look at some of the most common issues that might be tripping up your system.

1. Your Annual appraisals are too heavy

If that sounds like you, know that you're not alone.

In many ways, the annual review has become the scapegoat for companies that have much bigger cultural problems. Do they take too long? Usually, yes. Are they too one-sided, formal, and complicated? Probably. Does that mean you should throw the performance review baby out with the bathwater? Not so fast.

Before you get rid of the annual review altogether, first consider a faster, more efficient framework, including more feedback opportunities throughout the year. Second, engage employees in the process so they feel a sense of ownership over their performance goals and the metrics you use to measure their performance.

2. Your ratings are meaningless

Rating employees can be a contentious endeavor, especially when ratings are tied to pay increases and promotions.

But when used correctly, ratings can be a great way to create and uphold workplace standards. The challenge is knowing when to use, and when not to use ratings in performance reviews. For instance, if you're rating an employee on a vague personal identity characteristic like how "collaborative" they are, you could easily see a backlash. Especially, if you're not bothering to follow that rating with development opportunities to help them learn how to play better with others.

Instead, focus your ratings to help carve out a growth path for employees or measure a manager's subjective opinion of the employee, not the employee themself.

3. Feedback has no connection to mission

The biggest mistake in performance management is forgetting why you’re doing it. But if your approach isn’t aligned with your company goals, you’re working with a blunt tool.

A 2016 study found consumer companies whose employees understood their role in delivering the organization’s aims managed to triple their annual growth rates.

Start by finding your performance management north star. And keep in mind, this probably won't be an exact match to the mission statement hanging in the lobby wall, but it should definitely be related. For example, Starbucks's mission statement is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

It’s ambitious, but also simple. So for Starbucks's employees, the ‘north star’ is all about creating the kind of culture that leads to stellar customer service.

4. Employee reviews are full of fluff

When you sit down to evaluate an employee, are you asking the right questions?

A well thought-out question can mean the difference between a productive employee and a toxic workplace culture. And there are many ways to say the same thing. Think about your language, tone and phrasing. Is it accusatory or focused on growth? Is your intent clear? Dig deep, ask follow-ups and allow a two-way conversation to take place.

Here are a few example questions to help get you started:

  • What was your biggest achievement in the last year/quarter/month and why are you proud of it?
  • Which aspect of your job do you enjoy the most and why do think you're good at it?
  • What other ways do you think could contribute to the company?
  • What's been the most challenging part of your work and how did you deal with it?

Despite the buzz, there's no one-size-fits solution to performance management. Your performance management must evolve right along with the rest of your business. And if your business has changed and your performance management process hasn't, it's probably time for a tune-up, not a complete trade in.


Ready for a modern and effective performance management system?

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What are Cascading Goals & How to Use Them

The idea of using goals as the lifeline between a company's grandest vision and an individual employee's daily actions has been around for decades.

So why is it that only 14% of employees know their company’s objectives?

It's not like organizations don't bother to set goals — 65% of organizations have an agreed-upon strategy. But creating a strategy is easy — executing it is a whole other ball game. Less than 10% of all organizations succeed in executing their strategies.

And executing strategies consistently?

We don't have exact numbers on that, but you can bet they're pretty minimal. The ability to deliver solid results over the long-term is undoubtedly what makes a company (and its leaders) great. But the secret to consistent performance at the company level, is all about the people who make the strategy happen at the ground level.

That's where cascading goals can help...IF you use them right.


Company goals, team objectives and employee progress are easy to track in PerformYard.


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What are cascading goals?

Cascading goals are goals that are translated from one level of the organization to the next. The point of a cascading goal is to get everyone from top to bottom completely aligned with the big picture organizational goal, and to make 100% sure they know exactly what to do by breaking that strategy down into clear tasks and deliverables that can be easily communicated and tracked.

Goals can be seen in a "cascade" — with a clear set of objectives at the individual, departmental and company levels. This can make it much easier to communicate and document your strategy, while eliminating any confusion over who owns what, when a goal needs to be accomplished, or even how to achieve a goal at the task level.

According to Billy Elliott, Country Manager of the Top Employers Institute in Africa, “Unless organizations take specific steps to cascade goals throughout the organization and align these with employee goals, the best laid plans will come to nothing. To drive true purpose and effectiveness in the everyday lives of employees, the company strategy needs to be filtered down to each level of staff."

Cascading your goals is how you achieve that "filtering down" so that no one in the organization is ever confused about what to do or when to do it.

The pros and cons of cascading goals

Like all things in life, business and HR, there are two sides of every story. The magic of cascading goals will be quickly lost, if you fail to use them intentionally.

While cascading goals are a great way to break down your company's vision into actionable chunks employees can bite into, they're also inherently hierarchical and can become prone to the kind of bureaucratic workflows and tunnel vision that have upended many an industry dinosaur.


  • Align business objectives with employee goals
  • Increase transparency and accountability when shared publicly
  • Reduces workflow redundancies, conflicting objectives and unclear responsibilities


  • Prone to blanketing diverse departments under one generic goal
  • Can become a time-intensive red tape exercise where the real goal becomes muddled
  • Can become rigid and outdated if not actively tracked and followed up

Stuart Hearn, commercial director at HR software company Vaado Software (previously HR director at Sony Music Publishing) sums it up perfectly in an interview for HR Magazine:

"If performance management is taken seriously within the senior team and they lead by example, then this tends to cascade through the organization. In organizations where the process is HR-driven and senior management is not committed to performance management, it tends to be more of a box-ticking exercise."

With cascading goals, any attempt to "set it and forget it" will backfire. Let's take a closer look at how to use cascading goals for good (rather than superfluous HR "box-ticking").

3 must-know tips for effective cascading goals

If you're doing it right, your cascading goal process won't stop after the CEO sets those initial goals.

Here are a few ways to break free of the linear approach and make your cascading goal setting process equally as dynamic as your business (and the people in it).

1. Get real about your goals

Don't overload your performance management process with too many organizational goals — but don't force autonomous departments to adopt one blanket goal, either.

Think about the top 3 things you really want to achieve and be SMART (e.g., Specific, Measurable, Achievable, Realistic and Time-Based) about how you set out to achieve them at every level of your cascading goal process.

2. Check your alignment

Alignment is key. Rather than investing all your energy at the front-end (setting up a strategic top-level goal and then walking away), give each department and employee some autonomy in setting the goals that make the most sense for them.

Make sure everyone is completely clear on what tasks are assigned to each goal, then set firm deadlines, performance metrics, and dates and reminders for check-ins.

3. Always follow up

Creating a strategic goal may feel like a lot of work for your CEO, but it's nothing compared to the burden your employees will feel if they don't have the tools and support they need to achieve those goals.

Always align goal reviews with performance reviews and make it a point to ask your people if they're getting the resources they need (including training, mentorship, and clear and specific feedback) in order to keep moving toward their goals.

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How to Fix Low Performance Review Completion Rates

Perhaps more than any other business function, HR performance is hard to measure. How do you know a benefit is worth offering? Can you justify the ROI on that shiny new tool or initiative?

Questions like these plague many an HR leader.

But when you're dealing with hundreds of different personalities, how can you ensure everyone's taking the time to provide their feedback. And, importantly, how can you do it in a way that won't annoy them or turn them off from the process completely?

Departmental competitions rewarding managers with free parking spaces for 100% completion are great and all, but if there's a crack in the foundation of your performance management process, those attempts will still feel forced. Here are some subtle yet effective ways to get your performance review participation rates back on track.

1. Eliminate the unnecessary

Raise your hand if you've heard this one before: "Sorry. I just don't have time for this right now."

It may sound like an excuse but in a world where managers typically spend 30-60% of their time on admin and meetings, it's not hard to imagine how they could come to resent the appraisal process, especially if it comes with a heavy paper trail. Research shows that managers spend up to 210 hours per year on performance management, and employees spend roughly 40 hours per year. For many employees, that's just too much.

If your employee appraisal process is overly complex, employees and managers alike will do everything they can to avoid it (even play hooky). Rather than loading an entire year's worth of feedback into one red-tape heavy annual review, consider some simple ways to deliver feedback more regularly, or try to adjust your appraisal forms to get the same or better insights with fewer questions.

If you're not sure what to keep and what to scrap, here's a quick guide to help walk you through.

2. Fight cynicism with purpose

If you get the feeling everyone dreads or even despises, your review process, you're probably right.

The reality is it's not just managers who are skeptical. A 2014 Deloitte report surveyed over 2,500 CEOs and HR leaders around the globe and found that 58% believe performance reviews aren't an effective use of time.

But if you can't see the value in the appraisal process, how can you expect anyone else to?

The good news is every review season is a fresh chance to reframe your approach. If you've recently implemented a lighter, faster review process, why not tell your employees about it? Tell them what you removed, what you kept and why. And if you're not sure where to start, sit down with your leaders and managers to find out what they want the review to accomplish. For example, do they want to encourage growth and development or raise the bar on autonomy and accountability? Performance management isn't a "set it and forget it" activity, but if it were, what would be the end game? What do you want to get out of it?

When your review process has a clear reason for existing, employees, managers and even the top-level players who are always "too busy" will find it much easier to get their reviews done.

3. Clearly communicate why and how

As HR managers, we take it for granted that this stuff's important. We've read the articles, we've seen the stats, we get it. But do your managers and employees know what's in it for them?

Fact is, 9 in 10 managers are dissatisfied with how their companies conduct annual performance reviews, which means they simply don't see the value in it. But if you've taken the time to develop a fair, focused, efficient process for evaluating employee performance, you should have no problem getting that buy-in.

Here are a few factors to include in your next announcement:

  • The overarching goal of your performance management process
  • A clear explanation of what the process was like then vs. now (if you've made a change)
  • Real-world stats, examples and testimonials of how performance reviews help employees, managers and the business at large (feel free to use another company's example if you don't have your own yet)
  • A step-by-step breakdown of how the process works and what the major deadlines are
  • Tips for giving clear and compelling feedback

Once everyone's clear on the why, how and when, use an automated tool to take the pressure out of following up with managers who are still dragging their feet.

How to make it stick

At the end of the day, the purpose of your performance management process matters just as much as the process itself. A great way to ensure higher participation rates in the long-term is to involve your managers in designing the strategy to include the things they view as important.

What have they seen that does and doesn't work? In an ideal world, how much time would it take them to complete an appraisal? What would they get in return? Set a review process and schedule they can feel good about and use the right set of automated tools and systems to make the implementation as pain-free as possible.

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How Does Amazon Do Performance Management?

Is Amazon a lone wolf in the tech world?

Unlike Apple, Microsoft, Google or Netflix, Amazon's working culture is anything but glamorous. You won't find employees skateboarding across the office or kicking back in high-tech meditation pods. Yet, Amazon is undeniably a direct competitor to some of the brightest Silicon Valley darlings. So if it's not competing on Michelin-star rated lunches and unlimited vacation time, how is Amazon winning its talent?

In 2015, a controversial New York Times article described Amazon's culture as "purposeful Darwinism" and accused the company of creating an environment where employees are ruthlessly pitted against each other using a brutal rank and yank performance management system. But employees, including Jeff Bezos himself, spoke out against the article saying that much of it was nothing but hype.

So what's true and what's false when it comes to the retail giant's performance management system? Unfortunately, it's tough to know for sure. But luckily, there are a few clues that can give us a good glimpse into how leaders at Amazon run their employee appraisal process.


We built PerformYard to streamline and automate any organization's unique performance management strategy.  


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Who is Amazon?

Before we start piecing together what we know about Amazon's performance management strategy, let's not forget how influential the tech giant is.

Amazon is arguably the most successful startup of our era, and has eclipsed the likes of Walmart as America’s largest retailer. Amazon created the modern category of retailing, pushing the boundaries on everything from eReaders to video streaming, web hosting, smart devices and so much more.

The tech giant currently boasts 100 million prime members and a market cap of about $380 billion. Its workforce is comprised of 560,000 employees from all over the world. Despite their top-dog status, Amazon remains ever-aware of the competition. “Our customers are loyal to us right up until the second somebody offers them a better service,” says CEO, Jeff Bezos, “And I love that. it’s super-motivating for us.”

The role of performance management at Amazon

Jeff's known to lead by lean, Six Sigma–style processes that enable Amazon to offer the best possible customer experience at the best possible price.

But Amazon arguably gets its edge by using a data-driven approach with clear metrics to measure both consumer and employee behavior. In Gallup's more objective assessment of the company's work ethos, head of finance for Amazon Web Services, Sean Boyle says, "Data creates a lot of clarity around decision-making. Data is incredibly liberating."

So is performance management at Amazon about liberating employees to make the best decision on behalf of the customer or is it as ruthless and unfair as the Times suggested? The answer depends on who you ask. (More on that in a minute.)

Only the best

“You can work long, hard or smart, but at you can’t choose two out of three.” — Jeff Bezos

At PerformYard, we're strong believers that every performance management process should have a clear reason for existing. Whether you're pro or anti-Amazon, you have to admit, its performance management purpose is clear: always demand the best.

Amazon's 14 leadership principles serve as clear performance guideposts. And almost all of them focus on an individual's ability to own and objectively test and defend their ideas, as opposed to "softer" things like collaboration or development.

But how does this play out in practice?

Continuous feedback meets annual stack ranking

From what we were able to garner from a limited amount of public info, Amazon uses a "stack ranking" (a.k.a. "rank and yank") performance management process in which employees are rated against each other in an annual review.

As Don Weobong President of Telania e-learning platform puts it, "every aspect of a worker’s performance is measured and ranked — from the earliest stages of the onboarding process, employees are also treated as data subjects in every respect. At the end of the day, employees are only kept if their metrics add up."

But here's where it gets interesting. Amazon also uses continuous feedback via its "Anytime Feedback Tool". This is an internal platform where workers can anonymously praise or critique colleagues. While the majority of the business world grapples with annual vs. continuous feedback, as if it's an "either/or" debate, Amazon boldly powers ahead with both.

And for employees who literally don't stack up?

Amazon uses a 3-month "Performance Improvement Plan," (or "PIP") to help the employee get back on track. You can guess what happens if they don't.

What do employees and managers really think?

If scathing accounts like that of the Times are to be believed, you might be thinking, "No wonder turnover at Amazon is so high."

And it's true. Median tenure at Amazon is just 1 year. But at Google, it's 1.1 years — not much better despite its cushy 5-star perks and seemingly well-rounded performance management model. So what do employees love and hate about working at Amazon?

Here are a few anonymous Glassdoor testimonials that can help shed some light.

The pros

“Keep doing what you're doing. The reason such a big company can still operate successfully is because it runs as a start-up, and you can see that in every part of Amazon. Every Day is Day 1.”

“The culture demands that you're able to defend your views or decisions in a rigorous, data driven way, and accept criticism constructively without taking it personally. This doesn't suit everyone, however if it does, then both these things become significant Pros, adding to your experience and growth.”

“You work with smart people, you work on exciting projects, you are pushed to your limits...which can be rewarding when you accomplish great things. The diversity of the potential work and innovation can be very alluring. I've often called Amazon my 'Sexy Mistress'...she's emotionally abusive, but she's so sexy that I go back for more punishment."

The cons

“The management process is abusive, and I'm currently a manager. I've seen too much ‘behind the wall’ and hate how our individual performers can be treated. You are forced to ride people and stack rank employees...I've been forced to give good employees bad overall ratings because of politics and stack ranking.”

“You're responsible for your own career progression and finding the places and teams that are doing the stuff you want to do. No one is going to take you by the hand and help you with that.”

“You have to be self motivated. NO ONE will hold your hand and tell you that you're doing a great job. If you need constant affirmations from management, this company isn't for you.”

All of the above

Then there's the most famous employee review. The one that virtually cemented Amazon's reputation for "purposeful Darwinism".

“Amazon is built, quite deliberately, to be Darwinian. The strong survive and the weak perish (metaphorically speaking) and the 'bar' is constantly increasing. The level of performance that would have been acceptable five years ago will get you canned today. It’s a kinda crucible that will help you develop a harder edge, if you can survive, that will service you well in your career and in life.”

Diverse challenges, breakthrough performance, zero hand-holding — these are attributes that may work well with a specific type of high-performer, and they definitely seem to match Amazon's unique position as a fast and fearless innovator.

And there is some indication that respect for this approach is growing. The average company rating on Glassdoor from current and former employees is a 3.4 out of 5. As of 2018, Amazon receives an above average rating of 3.8 — up from its score of 3.4 in 2015.

But not every company has the kind of magnetic employer brand that can be considered the "Sexy Mistress" of professional growth. While Amazon's clarity of purpose and hard focus on objective, data-driven feedback are solid performance management principles, smaller brands who need to hang to their people might be better off leaving the "ratings politics" and "emotional abuse" at the door.

More Inspiration

Amazon 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.

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

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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How to Choose the Right Goal Cycle Frequency

Goals are an elusive subject. Research on how to set them, track them, and of course achieve them has dominated both the personal and business spheres for decades, maybe even centuries.

According to some of the crème de la crème goal-setting researchers, a goal "is the desired outcome of a particular behavior or set of behaviors, and therefore goal setting involves specifying the level or standard of performance to be attained, usually within a predetermined time frame."

Let's think about that last part for a minute. Goals can be incredibly motivating, but only if the time period makes sense. If a goal cycle is too short, we don't get the rush of taking those giant performance leaps. Too long and we risking working on outdated, ho-hum goals that no one takes seriously.

But how do you really know when one goal should end and the next begin?

Simple benchmarks for choosing the right goal cycle

Spoiler alert: As much as we'd love to give you one, there is no magic formula for setting the perfect goal cycle.

In today's rapidly-changing business climate, even the time-honored quarterly goal has come under scrutiny. At the end of the day, establishing a relevant end date for your business goals is about asking yourself the hard questions, things like:

  • What matters to us more, profits or innovation?
  • Does why we have a goal, or how we reach it, matter as much as when we achieve that goal?
  • What do we want the future of the business to look like?
  • Are our goals meant to be reached? Or just pursued?

Long-term goals vs. short-term goals

One way to simplify the process is to start by drawing a line between your long and short-term goals. Again, this will look different depending on what business you're in.

A startup may have vastly different long-term goals than a centuries-old business that functions in a slow-moving industry. For example, 10x growth within 5 years might be the kind of high-stakes long-term goal that makes sense for a sparkling new tech company. But without clear criteria for how that goal will break down in the day-to-day, you could be putting your business at risk for the sake of pleasing investors.

For a 3-5 year goal, you might need performance reviews every month, or even week to keep your teams on track. But what if you're a major contractor who's just won a big-ticket infrastructure project that will take a decade or more to complete? In that case a long-term goal might be a 20-year goal broken down into "short-term" annual or biannual goals based on project specs that are already fully fleshed out.

Here are a few examples that can help give a little more context to how you think about the right goal cycle for your organization.

Apple - 3 Annual Objectives

"I want to put a ding in the universe.” – Steve Jobs, Former CEO, Apple

Steve Jobs was known for setting massive goals. Every year, Apple hosted a strategy meeting where the famed CEO would gather dozens of yearly objectives from key staff, then narrow them down until they were left with just three. Τhose 3 goals then became the core goals for the next year.

Jobs also set expectations for how those goals were to be reached. Focus was big. He was known for demanding zero distraction. Every activity his teams undertook either supported the annual goals, or simply weren't a priority. Apple even assigned a DRI (Directly Responsible Individual) to every project to make sure their teams stayed on track to hitting their yearly goals.

Starbucks - Why over when

“These goals represent our aspiration to create impact on the issues that matter.” - John Kelly, SVP of Global Social Impact and Public Policy, Starbucks

For Starbucks, social responsibility is the north star. The coffee giant's 2020 vision for social responsibility has clear guidelines and expectations. Starbucks breaks down their 2-3 year responsibility vision to smaller, more actionable goals under following headings:

  • Sustainable Coffee
  • Greener Retail
  • Creating Opportunities
  • Strengthening Communities

By stating that these are the goals for 2020 "and beyond", they're letting stakeholders know that this is an ongoing, long-term goal that they're committed to setting and resetting every couple of years.

Facebook - Non-goals take you farther

"Lots of times you have very good ideas. But they're not as good as the most important thing you could be doing. And you have to make the hard choices." - Sheryl Sandberg, COO, Facebook

At the end of the day, there isn't enough time to do it all.

Sheryl Sandberg has a great trick for choosing which goals really matter. Non-goals are secondary goals employees should focus on only after the main goal has been met. "You have your goals and non-goals. The non-goal is the next thing that you would do, because it's a really good idea," she says.

A rule like this might make more sense for a 20,658-person company like Facebook than a ruthlessly determined startup, but it's a form of prioritizing we could all learn from — both for the big picture long-term goals and the smaller day-to-day actions that get you there.

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Make Your Employee Appraisals More Fair with 4 Simple Ideas

If you've been following the performance management space for any amount of time, you know how controversial performance reviews can be.

Still, they're often necessary. So once you're caught up on the research, once you've read all the headlines, once you've accepted the fact that we can (and should!) do better — where does that leave you? What can you actually do to make your employee appraisals more fair?

Here are 4 practical tips you can take back and apply to your appraisal process right now to make everyone feel better at work.

1. Don't compare employees' past track records

At work, as in relationships, there's nothing more annoying than being compared to someone else.

Research published in Organizational Behavior and Human Decision Processes (and summed up in this brilliant HBR article) examined four studies using data from 1,024 American and Dutch employees in order to compare two types of reference points in employee performance reviews.

The first reference point, called "temporal comparison evaluations", uses the employees’ own past performance to show them how they've progressed over time. The other reference point, called "social comparison evaluations", uses other employees’ performance during the same period, so that a manager can rate an employee based on how much better or worse they performed over their peers.

As you might expect, researchers found that participants who received temporal comparison evaluations (feedback based on their own past performance) had a much easier time getting on board with the feedback given. They felt their performance appraisal was more individualized, discerning and accurate. They felt they'd been treated with respect.

On the flipside, everyone (strong and poor performers alike), who received a social comparison evaluation, felt the appraisal was unfair.

2. Link performance to outcomes

But if you can't compare employees' past performance, what can you do?

Using clear and specific outcomes is a great way to show employees how their work makes a tangible impact on the bottom line, while proving that your appraisal process is anything but arbitrary.

The outcomes will of course vary from role to role, but a good place to start is to think about the KPIs that matter most to each department. Make sure they're things your employees can actually own. For example, increased revenue might be a great outcome for your sales reps, but does your engineering department truly have the tools, resources and autonomy needed to draw a clear line between their work and its impact on revenue? If yes, great!

But keep in mind, there's a reason 65% of employees say performance evaluations aren't relevant to their jobs. Holding your people accountable for outcomes they have no real impact on is a sure way to make them resent you, so choose wisely.

3. Know exactly what you're measuring

I once knew a star performer who was about a foot taller than everyone else on the team. At almost six feet tall, no matter what she wore, it looked "short".

Despite the fact that she consistently outperformed the rest of the team on all the departmental KPIs, she was always rated a 2 out of 5 on dress code. Rather than settle for wearing pants every day, she quit and became a manager at a competitor company.

When employee appraisals muddy the water between expectations and goals, confusion abounds. Managers can lose sight of what's really important in an effort to force a "cultural fit" — and that's a sure way to lose your best people.

Once you've identified the core metrics that really drive performance, consider dropping any expectations that don't actually move the needle on your goals. (And never, ever rate an employee on metrics that just don't matter.)

4. Define your performance management goals and values

Perhaps the biggest reason 71% of American employees surveyed by Gallup said their performance appraisals weren't fair, is because they don't know why they exist in the first place.

Fairness cannot exist without clarity. Yet, how many managers do you know who can actually explain why the performance review process exists in its current form? (And no, "figuring out who to keep and who to fire" isn't an answer that will inspire confidence from your employees.)

One great example of a company with a clear performance management goal is Huawei. The major manufacturer has a performance management goal of "development over time" and they're known for evaluating employees based on their own past performance. In the words of their founder, Ren Zhengfei, “I will not judge whether each team has done a good job or not, because all of you are moving forward. If you run faster than others and achieve more, you are heroes. But, if you run slowly, I won’t view you as underperformers.”

If it's time to rethink your employee appraisals, consider including your people in the process. There's no better way to establish an environment of trust and fairness, than to involve them in finding a better way forward.

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

We've all heard the epic stories of game-changers like Jack Welch who seemingly pull off the impossible by getting 250,000 employees to "pull in the same direction" and reach record-breaking levels of success in their business. We've seen the stats. We've read the headlines. We get it.

Performance management matters.

For many of us, the question isn't whether or not to use a performance management process, it's: Where the heck do you start?

(Check out our getting started guide too!)

Most performance management is missionless

For most of us, what performance management is clear. We do reviews, encourage feedback, and set goals. But beyond these activities, what's the point of doing it all? Why does your organization do performance management?

Taking a hard look at the purpose of your processes is REALLY important. As great as performance management can be, it can also go horribly wrong.

When we talk about performance management gone wrong, there's always one underlying theme uniting these cautionary tales: Businesses veer off-track because they've lost sight of the why.

Why you need a "north star" for your performance management strategy

From launching a new service to enabling human life on Mars, every awe-inspiring mission starts with a compelling goal — or, "north star" — to keep its supporters firmly on track.

In fact, a study by Korn Ferry titled, “People on a mission" found that consumer companies that focused their employees on the organization’s purpose boasted annual growth rates that were nearly triple the annual rate in their sector.

If you want to prevent your performance management process from becoming just another blip in a miles-long HR paper trail, you need a clear goal to keep it on track.

But if you're like most businesses, you probably have multiple goals, objectives and values guiding your business. Which one should be the focus of your performance management process? It's a tough call. And the answer will always depend on the unique culture of your organization and the industry you're in.

From classic innovators to the new and "unusual", here are 9 examples of companies with a clear goal for their performance management processes. Hopefully, these examples will inspire you to create the one that's right for you.

9 companies with clear performance management goals

1. Employee Development at Deloitte

In 2015, Deloitte radically revamped their performance management system from the traditional annual review system which, like so many others, had a north star of "accountability" based on past performance.

The big four consulting company now uses a quarterly review system with the overriding goal of coaching and developing its employees. In shifting their focus from past to current and future performance, Deloitte shed a floodlight on one of the biggest intrinsic challenges in employee reviews, striking a balance between development and accountability. In the words of one Deloitte manager, "The conversations are more holistic. They’re about goals and strengths, not just about past performance."

2. Collaboration at General Electric

Like Deloitte, GE is another major name in performance management. Jack Welch's famed "Rank and Yank" approach to performance management has become synonymous with competitive 1980s business culture. But in recent decades, the company has shifted its PM process from one of ruthless evaluation to goal-setting and aspirational guidance (drivers which some would argue were always there.)

Though the rank and yank model was effective in improving performance and encouraging candor between managers and employees, it fueled an element of competition that proved counterproductive to the collaborative way in which most businesses must now operate. In perhaps one of the most extreme examples of a performance-management-180, GE now uses a continuous feedback approach. Managers and employees use a performance-tracking mobile app (called PD@GE) that allows managers and employees to make text or audio notes, attach documents and upload handwritten notes which they can later discuss in their next check-in.

3. Personal Accountability at Accenture

Like Deloitte, Accenture is a giant in the consulting world. The management advisory firm is also a regular on Fortune's best companies to work for rankings. And like Deloitte, Accenture moved away from a rigid performance management system, shifting from evaluation to development. It was again, a massive undertaking, “Imagine, for a company of 330,000 people, changing the performance management process — it's huge,” said Pierre Nanterme, CEO of Accenture in a 2015 interview with The Washington Post. “We're going to get rid of probably 90% of what we did in the past.”

While Accenture's approach looks very similar to that of Deloitte and others, the company's PM strategy has one clear differentiator — employees work with managers to set goals for themselves. At first glance, it can be tempting to view this as just another thinly veiled approach to rank and yank, but for Accenture, this focus on individuality is fundamental to coaching employees to "know thyself" and encourages a greater sense of passion and dedication at work.

4. Removing Teamwork Barriers at Microsoft

It's one thing when a millennial-run tech startup bucks an ongoing HR trend — it's a whole other thing completely when a giant like Microsoft does it. In 2013, the software giant was under increasing heat from former employees to eliminate its cutthroat stack ranking system, prompting Microsoft to become one of the first big-name brands to ditch employee ranking. Instead of sticking to forced timelines and rating curves, Microsoft created a performance management process called “Connects”. Similar to PD@GE, Microsoft optimizes their workflows to accommodate for timely feedback based on the rhythm of each part of their business — rather than following one timeline for the entire company.

While there is definitely an element of collaboration and development in Microsoft's new system, the real goal is to eliminate the many silos that exist in a company their size and foster a better sense of teamwork in order to act more quickly on changes in the market and avoid becoming the proverbial business Titanic. "The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company," said former EVP of HR, Lisa Brummel.

5. Emphasizing Agility at Adobe

If it weren't for Adobe's fearless approach to performance management, companies like Microsoft and GE might still be stuck in a rigid ratings-based system. The company is credited "killing annual performance reviews," in keeping with the famous “Agile Manifesto” and the idea that annual targets are actually pretty irrelevant to the reality of day-to-day business operations.

In 2012, they introduced the concept of "Regular Performance Check-Ins", an informal system of ongoing, real-time feedback. Under their game-changing system, there are no deadlines and no forms to fill out and submit to HR. Managers decide how and when to set goals and give feedback. In removing the red tape from the performance appraisal process, Adobe allows teams to act more independently and more quickly in response to changes in the business and market. Since implementing their agile approach, the company has seen a 30% decrease in voluntary turnover and a 50% increase in involuntary departures.

6. Cultural Alignment at The Stanley Clark School

Ok, enough with the Fortune 500 examples. The best inspiration doesn't always come from the biggest names. Take The Stanley Clark School for example. This independent, private school serving children from preschool to eighth grade in South Bend, Indiana shows how a clear performance goal can help you punch above your weight. Schools across the US are plagued with toxic working environments, which undoubtedly has a negative impact on students. In her guest post for Gibson, Melissa Grubb, Head of School at The Stanley Clark School explains how they set their unique goal for a performance system and culture to rise above.

"First , a word about the assumption made as we embarked on creating a new process. We assumed each employee is competent and that the process should support our expectation of continuous improvement. Our interview process lasts for days in most cases and, if we make a hiring mistake, we correct it as soon as possible regardless of the evaluation cycle. We assume the process is designed for the employees we wish to keep, not the occasional bad fit."

Because they removed the accountability factor from the process completely, Melissa and her team can firmly focus on developing the employee within the context of the school's unique cultural values. Employees are given 6 questions and 30 positive statements to review before each performance-related meeting in order to help spark a productive conversation about their performance and how it fits into the greater whole.

7. Democratic Accountability at Valve

In case you haven't heard of Valve, they're the billion-dollar company behind some of the world's most popular video games. With no hierarchy, no set performance metrics and no seating chart, Valve's unique company culture (referred to as "Flatland") is designed to get maximum creativity out of its employees. So what purpose does its performance management process serve?

For a company so "out there", Valve uses performance appraisals in surprisingly traditional sense. The company creates a team of employees who then conducts performance interviews with each individual in the company, asking them who they worked with and what their experiences were working with that person. They then anonymize the feedback and present it to employees in what is a fairly typical 360 review system. When performance issues arise, they work with the individual to try to find a solution. If firing is the consensus, they make an attractive severance offer and attempt to part on amicable terms. For Valve, using their PM process to enforce accountability at the group level is a great way to loosen the reins in the day-to-day.

8. Growth at Gap Inc.

Gap is another company considered an early innovator in the world of performance appraisals. The company has a firm commitment around maintaining a growth mindset — the belief that everyone can be learn from their success and failures. While traditional performance management almost always begins with a lofty, passionately-worded goal, the high street retailer focuses on short-term quarterly goals supported by real time feedback, regular check-in and annual “GPS” (Grow, Perform, Succeed) meetings.

At Gap, there's no annual review and no ratings. By coupling short-term goals with individual accountability, the retailer puts growth front and center in their performance management strategy.

9. Autonomy at Asana

Tech startup Asana doubles down on the idea of aligning values with performance expectations in their famous AOR (Areas of Responsibility) framework. Instead of a traditional hierarchy, managers (a.k.a. "AOR-holders") trust their people to make the best decisions for the business.

And their performance management system is a clear reflection of their culture. Instead of annual or quarterly reviews, Asana gives face-to-face feedback often, and with zero paper trail. The company has a self-review at the end of each year, in addition to a biannual review of the company’s general direction where teams take weeks out of the office to discuss goals and performance-related issues and hold regular feedback sessions with peers and managers in a closed retreat-like setting (not unlike Microsoft's famous Think Weeks).

The focus on autonomy and objectivity are upheld through regular one-on-ones where AOR-holders and leaders ask personal development questions like, "What are you feeling?" and "What are your long-term human aspirations?". It may sound a little woo woo for those of us who have been in the game since the pre-Facebook days, but with over 20K+ paying customers and plans to go global, the company seems to be onto something.


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7 Traits of Effective Self-Review Questions

How would you rate your job performance at our company?

For many employees, this feels like a question that's just a little too loaded.

By its very nature, employees feel like there's a right and wrong way to answer, making it impossible for them to take a breath and engage in the kind of quiet self-reflection that can give you the authentic insights you need to help them actually improve their performance at work.

In Gallup's 2017 analysis of high-performing teams, only 14% of employees said they strongly agree that performance reviews inspire them to improve, and only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. Making your employees feel like the cards are stacked against them is probably the worst possible way to kick off the performance review process, and in cases of extreme employee resentment, the self-review is often a major culprit.

But wait. Before you go deleting your self-review template, you should know that it can be a valuable part of the performance management process, IF you know how to use it. Here are 7 things an effective self-review form should accomplish.

1. See your employees for who they really are (and what they really do)

There's a pretty big gap between employees and managers. In fact, according to Gallup, only 50% of employees say they clearly know what's expected of them at work.

An effective self-review lets both you and your employee get crystal clear on what it is that they do, what others think they do, and what they actually do. Businesses regularly let performance gaps slip through the cracks simply because they don't understand that all performance gaps — no matter how strategic or far-reaching — begin at the ground level. An effective self-review, followed by fair and focused coaching, can help you close those gaps before they grow out of control.

2. Gauge employee satisfaction

At the risk of sounding "buzzy", employee experience and employee happiness are truly the name of the game in the new talent economy. According to experts like Brad Grossman, founder and CEO of the cultural think-tank Zeitguide, “More jobs available means more competition for great employees. So it’s very important that you appeal to them in a great, amazing way, so that they choose your company as opposed to another company.”

A study by economists at the University of Warwick found that happiness led to a 12% spike in productivity, so from the looks of it, experts like Brad aren't far off. Perhaps more than other parts of the employee review process, the self-review form can be a great place to inspire your employees to connect with the parts of their job that give them the most satisfaction and remove, reduce or transform the parts of the job that tend to drain them of their energy.

Instead of putting the onus on the employee with generic questions like, "Do you have suggestions on how to improve employee morale?", try literally asking them which tasks tend to make them feel energized vs. drained.

3. Reinforce the vision

Employees who can link their individual goals to the organization’s goals are 3.5 times more likely to be engaged.

Your top performers see themselves in the future picture of your company. A great self-review enables them and you to get a better idea of what that picture looks like. Use the self-review form to prompt employees to think about the common values they share with your organization, share their personal goals and find out how they imagine growing and developing moving forward.

Again, keep it specific. Rather than asking, "What goals would you like to achieve in the future?", try linking their growth path to the parts of the job they most enjoy.

4. Make recognition a breeze

Most of us get so busy, we forget to celebrate our successes. And in some cases, we can even forget we had any successes to begin with.

But great managers want to know what makes their team members feel like they're totally on top of their game. An effective self-review form helps employees identify their biggest wins and gives team members and leaders a chance to think more deeply about the kind of activities that light the team up and where the lightning-strike moments tend to come from. These insights can give managers a ton of ammo they can use later on down the road to help keep employees engaged and on the right path.

5. Uncover innovations

As part of an awesome performance management process, an effective self-review form can shed a light on inefficiencies and enable you to quickly replace them with innovations.

If there's a dark spot in your SOPs or workflows, your employees are usually the first to know. Encourage them to speak up about any challenges or problems that may be preventing them from doing their jobs more effectively. Making them part of the problem-solving process will also help ensure they're all-in on whatever new tool, system or innovation you choose to solve it with. Again, be careful not to shift the responsibility back to the the employee with questions like, "What can we do to help you perform your job better?". Too often, these questions raise an issue, but fail to scratch beneath the surface. Follow it up with 2-3 more questions about what workflows or inefficiencies are wasting their time or energy, then get together to brainstorm solutions as a team.

6. Pave the way for a more productive performance review

At The Stanley Clark School in South Bend, Indiana, employees are given 6 questions and 30 positive statements to review before each performance-related meeting in order to help spark a productive conversation.

Rather than nailing your employees down to a few key moments, why not use the self-review to help them see how they fit into the greater whole of the business? Getting the employee to see themselves as one crucial part of a worthy bigger picture is a great way to set the scene for any future conversations that might include an adjustment or work expectations or negative feedback.

7. Find common ground

Perhaps the biggest benefit of the self-review form is that it empowers employees and managers to walk in each other's shoes.

By asking employees to reflect back on their own performance, you're effectively asking them to see things from their manager's point of view. And if you're doing it right, your employees will be encouraged to show managers how much they know and care about the work you're doing together.

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Encourage Employees to Recognize Each Other (without Forcing It)

Is this thing on? As leaders and HR managers, we've all felt the humiliation of being the only one on the company channel sending shoutouts.

And beyond the damage to our egos, that's pretty problematic for the company. If HR and managers are the only ones making sure the values of the company are acknowledged and upheld, they simply won't be.

While the vision of your employees singing kumbaya over your company mission statement may feel like just another fluffy HR trend, there are plenty of numbers drawing a clear line between profits and peer-to-peer recognition.

Why is peer-to-peer recognition so important?

In a Harvard Business Review interview, Whole Foods Market co-founder and co-CEO John Mackey put words to what most of us instinctively know:

Happy team members result in happy customers. Happy customers do more business with you. They become advocates for your enterprise, which results in happy investors. That is a win, win, win, win strategy.”

While there's been an increasing emphasis on employer-to-employee recognition in recent years, less has been said about the value of employees saying "thanks" to each other.

But peer-to-peer recognition matters in ways that top-down recognition never could. According to an SHRM report, 41% of companies that use peer-to-peer recognition have seen positive increases in customer satisfaction.

When your employees are actively uplifting each other, they're actively uplifting your customers, too. Maybe that's why companies who spend a minimum of 1% of payroll on recognition are 79% more likely to have better financial results.

5 awesomely unique approaches peer-to-peer recognition

Ok, so employees who give each other props have more fun at work and are also great for your bottom line. But how do you implement a peer-to-peer recognition program your employees will use?

Here are a few examples to help get your wheels turning.

1. Zappos Dollars - Classic rewards

Zappos is famous for being an epically awesome place to work and, as you'd expected, they have a set peer-to-peer recognition program in place. At Zappos, every employee can give a $50 reward to any other employee for a job well done.

The only catch is that managers, team leads and supervisors can't be recipients. Fair enough!

2. Jetblue - Public P2P recognition

JetBlue started their peer recognition program, “Lift” in 2012. Employees and team leaders can access the company's recognition platform via mobile, desktop, or tablet to call out each other's awesomeness — both for everyday tasks, as well as big, juicy game-changing acts. The stories are then shared throughout the company.

It seems to be a pretty productive approach — Lift has increased recognition satisfaction at Jetblue by 88%! JetBlue data also revealed that for every 10% increase in people who reported being recognized, the airline saw a 3% increase in retention and a 2% increase in engagement. Not too shabby!

3. Typeform - Keeping recognition spontaneous

If you're worried about not having the budget to rival the recognition programs of Zappos and JetBlue — don't fret.

In one of our favorite examples of peer-to-peer recognition, software company Typeform has what they call a "Spontaneous Applause clause". Employees are invited to start literally applauding an individual team member for a job well done. And because the whole company has embraced the quirky approach, once one person starts clapping, the whole office joins in.

This one takes the concept of slow clapping to a whole new, HR-friendly level.

4. Snacknation - Crushing it weekly

Afraid peer-to-peer recognition just won't happen on its own?

Why not take a page from Snacknation's playbook and make it a Friday thing?

The snack delivery startup has company-wide meetings every Friday where team members get call out someone they want to "crush", meaning "praise". Employees can crush each other for any task or activity, no matter how large or small. As long as it jives with the company’s core values, it's considered crushworthy.

5. Cloud 9 Living - Put it in writing

Cloud 9 Living is a gifting platform, so it makes sense that acts of appreciation are fundamental to the way they do things. The company has what they call the 'G' Book, standing for "Good Stuff." Team members are encouraged to recognize each other for any win big or small, business or personal by simply jotting their shoutouts down.

Here's how it works according to co-founder, Bobby Augst, "Every week at an all company meeting we read aloud the past week’s ‘G Book’ entries. It’s a great way to call out employee accomplishments that otherwise may go unnoticed, and it also empowers employees to recognize each other for accomplishments, as opposed to management always being the only ones providing recognition.”

The right way to do peer-to-peer recognition

If you're a regular here on the PerformYard blog, you know that we boldly reject the idea of a magic HR formula. While it's great to put your head above the water and take a look at the real-world recognition ideas that may work for you, the best answer will always be the one that's the most natural for your unique company and culture.

As you set out to create your own peer-to-peer recognition platform (and unleash all the awesome business benefits that come with it), we'll leave you with this great advice from Laura Hughes, HR Manager at adventure company, Geocaching in her contribution to Snacknation.

“Find out what forms of recognition resonate most with staff members. Often times, we equate a streamlined process with effectiveness – with recognition, this couldn’t be further from the truth. If we’re taking only one approach to recognition and thereby missing the mark in how we recognize others, it can be equivalent to not recognizing them at all. Encourage managers to ask employees how they most like to be recognized — you might be surprised at the answers that surface!"

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The Anatomy of an Effective Goal: What all those goal setting frameworks have in common.

We've all heard the mantras: "A goal without a plan is just a wish," "Goals are dreams with deadlines," and the shamelessly cloying, "Reach for the sky!".

Those are great for social media memes and personal development book covers, but what should goal setting actually look like at work? You know, in practical terms.

We all know we should be setting big, juicy, inspiring goals for our companies and people, but because of the sheer size of this topic, we have no clue where to start. SMART goals, OKRs, Golden Circles, etc. — there are so many ways to break down a goal. But beyond the HR headlines and endless acronyms, what do these goal-setting frameworks have in common?

Let's get back to basics and take a deeper look at the core fundamentals that make a goal great.

What's the purpose of goal setting?

Most of us think we know the purpose of goal setting, but unfortunately, life, business and bureaucracy have a way of consistently muddling the water. In fact, experts estimate that only 36% of organizations have a company-wide approach to goal setting.

Those of us who have attempted to set goals in the past — whether that be departmental revenue targets or those infamously doomed New Year's weight loss resolutions — would likely agree that setting the goal is the easy part. The brutal truth is that for a goal to make it beyond lip-service status, it must be adopted and upheld at every level of the business.

Here are the basic principles behind every great goal-setting framework.

The 4 basic functions of a good goal

  1. It motivates and inspires employees
  2. It facilitates strategic planning
  3. It provides guidance and direction in daily tasks
  4. It helps evaluate and improve performance

The 3 main tenets of goal setting

  1. A goal is better than no goal
  2. A specific goal is better than a broad goal
  3. A challenging and specific goal is better than an easy goal

What are the different types of goals (and how do you choose)?

Now that you know the fundamentals of why, let's dive deeper into the how and which.

You may already have a hunch that what works for Google may or may not be what's right for your company. Still, we now have more options for goal-setting than any other generation in business history, and deciding on something as powerful as THE north star for your entire company is a critical call to make.

After all, it may look great on paper, but what if it stops making sense as soon as the rubber meets the road? Luckily, there are some shared characteristics between the majority of proven goal frameworks.

The 3 main types of goals

  1. Absolute goals - These are usually the hard numbers: things like revenue, number of users, number of hires, time to hire, etc.
  2. Relative goals - These goals measure how your company stacks up in the marketplace and are usually things like market share or rankings.
  3. Sustainment goals - These goals let you know you're still on track to other big goals. These can be things like employee turnover, customer satisfaction, churn rates, etc.

The decision to choose OKRs, OGSMs or BSQs isn't what matters most. Any good goal/ goal-setting framework will have the same fundamental characteristics built in. The important part is not to cut any corners when it comes to executing these elements in the day-to-day.

Here's what the best goal-setting frameworks all have in common

  • An action plan designed to motivate and guide an individual or group
  • Goal-setting criteria or rules
  • A time limit that's firm but appropriate
  • Metrics for measuring the goal
  • Focus on a set of 3-5 main goals vs. a million watered-down objectives
  • Feedback and flexibility to help adapt to change

When setting a good goal for your company and the individuals who make it run, make sure your goal ticks the above boxes.

But don't forget that, as with every other element of your business, goal setting is a living, breathing process. There may be times you have to step back and really think through what works for your unique culture and business.

Logic and clear thinking are timeless goal-setting tools

Tomas Tunguz, co-author of Winning with Data: Transform Your Culture, Empower Your People, and Shape the Future says it best, “Ultimately, logic and clear thinking are probably the best tools for setting goals, and motivating an organization properly.”

At times, applying those tools may require you to adjust your expectations. Or, in the words of another goal-setting pro, Bill Gates once famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” (And Bill's a guy who really gets stuff done.)

If you want to go after those BHAGs (that's Big Hairy Audacious Goals, in case that one escaped your radar), more power to you! Just create a goal-setting rule that in your organization, goals are meant to be pursued, not reached. Then align that in your metrics and feedback guidelines to support that goal across the org chart.

Because at the end of the day, the most important aspect of goal setting isn't a flashy acronym or perfectly-crafted memo, it's that you and your people all have a clear target to act on.

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Pros & Cons of Competency-Based Performance Reviews

Richard Nelson Bolles's book, What Color Is Your Parachute?, has sold over 10 million copies in 28 countries — and for good reason.

In the book, Richard gives current and would-be employees the advice to, "Always define WHAT you want to do with your life and WHAT you have to offer to the world, in terms of your favorite talents/gifts/skills-not in terms of a job-title."

In other words, take time to really get to know your best competencies — then, find a job that lets you apply them. Today, that's a message that resonates on both sides of the employee/employer equation.

But it's one thing to say you're looking for someone who's "adaptable", "ambitious" and has excellent "attention to detail". It's another thing to measure whether an individual is bringing those traits to work every day — and a whole other thing still to prove those traits actually result in improved performance at work.

So how can you track competencies at a practical level?


We built PerformYard to streamline and automate any organization's unique performance management strategy.


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A brief history of competency assessments

The idea of optimizing an individual's inherent strengths may seem pretty hot these days, but the practice of assessing competencies has been around a while.

“Competence” was first creating a buzz in HR back in 1953. But the idea of competency assessments really made its mark in 1973, when Harvard psychology professor David McClelland wrote a paper called, Testing for Competence Rather than Intelligence.

In his groundbreaking paper, David posited that while traditional aptitude tests were good predictors of academic performance, they weren't all that great at predicting on-the-job performance. Instead of a rigid intelligence test, David suggested that an individual's underlying personal characteristics (or, "competencies") were the best predictors of performance.

And it's an honorable idea. But as with most good ideas, proof of worth is in the execution — not the idea itself.

The problem with competency ratings in performance reviews

Competency assessments have morphed into a bulky HR process.

HR departments force managers to navigate endless competency libraries and judge employees based on a rigid set of competencies that are more reflective of a "unicorn" employee than the actual needs of the business.

Here's a quick sum-up of the drawbacks of an over-reliance on competencies in performance reviews:

  • Reviews become overly focused on what "should" work, instead of what does
  • They don't leave enough room for the variety of skill needed in nuanced situations or roles
  • They treat competencies as quantitative measures of performance

A better way to track competencies in performance reviews

Get your managers on board

The practice of measuring an employee's knowledge, skills and attitude (KSAs) has been around for quite some time. But do your managers know that?

More importantly, do they care?

The truth is, most managers are too busy working with the actual personalities on their team to to think about whether their employees should improve their "critical thinking" abilities. And is that really a bad thing?

A manager's ability to lead a group of different people with different competencies is what matters most, not their ability to dissect that group based on a 9-box model of what's supposed to work. That's why companies like Google have kept their managers out of the hiring process altogether, and other companies like Deloitte have scrapped traditional competency-ratings in favor of open-ended metrics like, "Given what I know of this person's performance, I would always want him or her on my team."

If your managers are smart people (and we're betting they are), they'll know that using a qualitative measure to assess a business goal is a waste of time. Get them on board by coaching them on how your competencies go beyond the fluff to measure how an employee meets a quantitative goal.

(And while you're at it, make sure they're aware of the impact of rater effects and how their feedback could be prone to bias.)

Work backward

Competencies are best-used to identify the how behind a specific business goal or vision.

  • How does a customer support department boost an NPS score by 5 points?
  • How does a sales rep hit their revenue target?
  • How do we work better and faster moving forward?

We all know there are a certain mix of characteristics, that lead to a certain set of behaviors, that leads to an individual's success in their role. But there are many nuanced "black box" areas on the way to hitting a performance goal that those of us at the higher level just can't see.

Rather than taking a top-down approach that assumes that someone with a rating of 4 out of 5 on "organizational skills" is ripe for a promotion — why not start by assessing the competencies of the people already winning in their roles?

Once you know the KSAs that already work, then you can help your managers hire, coach and rate based on proven competencies.

Keep the competencies, ditch the "framework"

Coaching employees to further develop their best traits on the path to achieving your company's vision is at the core of performance management.

Competencies help us put a finger on what's really working in our business and are crucial to helping us coach our employees to reach their highest potential.

But they can quickly backfire when they're used as a performance management "cure-all", blanketing the unique individuals that make up your business into a homogenous group.

If you really want to offer more value at work by helping your people spend more time in their "zones of genius", it's time to go back to basics and look at competencies at what works on-the-job as opposed what "should" work based on a job description.

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Performance Rating Scales: When and how to use them

What could cause an 80% drop in employee engagement at one of the world's most successful pharma companies?

An over-reliance on performance ratings.

The truth is rating scales are one tool in the performance management toolbox. Like any tool, they’re useful — but not made for every situation.

Let's take a closer look at ratings to find out when they work and when they don't.

Classic Ratings and Modern Ratings

The classic example

The classic performance scoring matrix uses a 5 point scale and in most cases, probably looks something like this example from UC Berkeley:

  • Level 5: Exceptional
  • Level 4: Exceeds expectations
  • Level 3: Meets expectations
  • Level 2: Improvement needed
  • Level 1: Unsatisfactory

The problem with a scale like this one happens when it's used to assess vague competencies, like 'organizational skills.' Managers aren't good at rating broad competencies, one person's self-starter could be another person's insubordinate trouble-maker. You run the risk of broadening the gap between managers and employees with the disagreement of terms that is bound to result.

On the other hand, assessing employee performance without ratings opens you up to more subjective opinions that we know often show bias.

If you want to use ratings fairly and effectively, start by applying them to well-defined behaviors rather than personality traits.

The modern example

Deloitte addresses all the concerns raised above with their two rating questions-

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus. [1-5]
  2. Given what I know of this person’s performance, I would always want him or her on my team. [1-5]

It's important to note that Deloitte’s survey has open-ended questions as well, but these simple ratings-based questions help use their managers' inherent biases to understand how teams are performing, while making reviews incredibly fast and easy to execute.

It's important to note that there's no limit to the number of ratings statements you can use. In one of the HR world's most popular examples, Google uses 11 ratings statements plus 2 open-ended questions for employees rating their managers.

Why have performance ratings?

For years companies have overused ratings, applying them to every aspect of the business and the people within it. But the best employee rating system has everything to do with your own specific performance goal, and the amount of intention with which you use your ratings.

Here are some of the best ways to use performance rating scales, according to research.

1. Use ratings to support short-term improvement

While ratings probably aren’t as objective as we wish they were, research shows that a manager's subjective ratings can be good enough for short-term performance improvement.

Dick Grote, founder of Grote Consulting, took a deep look at the data, including a study of 100 companies using a GE-style rank and yank. He found that identifying the lowest 10% of performance, and replacing them, succeeded in helping the business improve. Dick writes that “organizations got their best results immediately, in the first few years after implementing a forced ranking system.”

It makes sense when you think about it. After a few years of cutting low performers, the issue won’t be talent, it’ll be talent management. Brutal as rank and yank can be, it can also be fair in circumstances where the business might be holding on to a group of underperforming employees who simply weren't a great fit to begin with.

If you're using performance ratings to boost short-term results, you could easily use the classic 5-point rating scale with any of the following statements.

Example statements

Change management

This person clearly explains how change will impact the team/department/individuals

This person achieves optimal levels of performance and accomplishment with/for ...

This person provides strong evidence of achieving results [list specific accomplishment]

Project Management

This person excels at developing projects that have delivered X results

This person improved production by X% through [the following specific tasks and strategies]

This person exceeded the original goal of X by X% through [performing/introducing the following tasks/strategies specific task]

This person keeps meetings action oriented by [using the following strategies/task]

Deadlines and Time Management

This person consistently meets all deadlines [provide numerical figure e..g completed 8 out of 10 tasks on time]

This person prepares meeting agendas that are concise and time-saving

This person keeps meetings on schedule

This person respects the time of others

This person makes effective use of discretionary time

2. Create and uphold workplace standards

Ratings can also be great for creating standards, a crucial foundation for any high-performance culture.

Companies like Asana set standards of independence and responsibility (using their famed AOR model), while Netflix sets unapologetic standards of excellence and skill. Held together by regular performance reviews, these standards coalesce to form the pillars of their workplace culture. While ratings have recently come under fire for being somewhat "counter-cultural", they can actually boost transparency and help employees know where they stand in relation to the company standards.


For example, GE also used ratings to support their company-wide standard of growth and improvement. Ron Ashkenas, consultant and author of The GE Work-Out, writes that GE, “assumes that most people have the capacity to continually grow.” The powerhouse company used rankings and ratings as just the start of a longer performance management conversation, a way to differentiate what employees need what kind of help.


That doesn't mean you put a 10-point scale on a vague metric like, "organization". The qualities you rate must be meaningful and aimed at providing a transparent framework for helping the employee develop. In GE's case, they followed up their ratings system by offering tools and programs to help employees reach their potential. After all, if you're going to tell someone they "Need Improvement", you better be able to help them improve.

Example statements


This person excels in living the organization's values

This person promotes strong support of the company's mission and vision

This person excels in contributing to the company's goals

This person promotes the company culture among peer

This person enforces company policies and values without creating negative reactions


This person is able to turn visions into actual action plans [give examples]

This person demonstrates an ability to transfer vision into execution by [implementing the following strategies/tasks]

This person collaborates with individual team members to establish a development path


This person initiates and executes creative ideas such as [provide examples]

This person provides their team with the resources needed to attain results by  [performing/introducing the following tasks/strategies specific task]


This person provides substantial support during periods of organizational change

This person is a key contributor to the successes of the department

This person makes a significant contribution to the continued operation and growth of the organization

3. Reduce the performance management workload

In Deloitte's case, the company was spending way too much time on annual reviews.

After completing the forms, holding the meetings, creating the ratings, then arguing about the results behind closed doors, Deloitte's leadership team found that their performance reviews consumed close to 2 million hours a year.

The company scrapped much of its appraisal form but kept its 5-point rating scale (strongly disagree to strongly agree). To make it more effective, they simply adjusted the performance factors to lean into manager bias by asking managers to rate based off of their feeling, something research showed they could do accurately.

At the end of the day, ratings will work. But only when approached intentionally. If you suspect your performance review system is too reliant on ratings, step back and ask which employee competencies or behaviors really need a clear and scalable rating, and which performance factors would benefit from a more open and honest discussion.

A more balanced approach will almost always pay off in more balanced employees.


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How to Assess High-Potential: Look for these 6 Characteristics

Leading businesses need more than hard work and solid results right now. They also need a pipeline of talent that will drive future success.

That is why many organizations evaluate employees on not only their current performance, but also their future potential.

According to one study from Mark Huselid at Rutgers University, programs for developing high-potential employees can lower turnover by 7% and deliver a big boost to a company's bottom line.

Not only that, research from the Journal of Applied Psychology found that star performers can bump up a team’s performance by as much as 15%. And as you would imagine, the reverse is also true. A 2017 Glassdoor survey found that keeping employees confined to one job without a clear career path gradually increases their chance of leaving. Turnover is never fun, especially when it's your high-potential faction of talent heading for the door.

But how do you identify high-potential? Isn't it the same thing as high performance?

Not exactly...

Let's take a deeper look at the difference between potential and performance, and what characteristics to look for to help tease out your future top talent.

The difference between potential and performance

Future leaders, rockstars, high-pots...

Potential is that elusive — almost magical — HR intangible that separates a good employee from your next gen business visionary.

Performance, on the other hand, is simply how well (or poorly) a person is doing their job.

While potential and performance are definitely related, they aren’t perfectly correlated. For example, a member of your IT team may perform job tasks only a little above average, but they consistently rock at bringing out the best in all the teams they interact with. They could be perfect for a project management role.

On the flipside, a star performer might totally nail their job tasks with consistent speed and quality, but they bring a negative attitude and don't care about the company. Move them into a leadership role and they could easily pull the company in a bad direction.

Don't get us wrong, we're not saying you should overlook performance. Past performance is always the best indicator of future performance. But there is more to future performance.

The point we're trying to make is that, as much as we wish there were a clear-cut path to bringing out the best in our people, it's just not as simple as, "Promote X employee after 5 years of solid work". The truth is, in order to reach peak performance, everyone needs opportunities to stretch and test their skills — and they deserve them, too.

But how do you know which high-pots are truly up to the challenge? Here are the fundamental signs to look for.

Six core characteristics of high-potential employees

While many high performers may be totally satisfied in their current roles, a high-potential employee is much more likely to seek out a totally new task, or be eager to take a much bigger step forward (or upward) into management or another role where there’s plenty of room to learn and advance.

If you're wondering whether a specific employee might be ready for growth, here are some of the core traits to think about.

1. Engaged and driven

Most high-potential employees are highly engaged in their field, industry and/or company.

Whether that extra layer of passion comes from an intrinsic drive, a set goal, or just a genuine interest in their work (hopefully, all three!), high-potential employees are like hot air balloons — to reach new heights, they need a little fire inside.

These individuals want to be the best at what they do. They're often the ones thinking more deeply about the job and asking the hard questions. In fact, Douglas Ready, former head of leadership talent management company ICEDR (along with several other experts) took a good look at the characteristics of high-potential candidates across a variety of different workplaces. They found that high-potential employees can be so ambitious, they “realize they may have to make sacrifices in their personal lives in order to advance.”

You'll recognize your high-potential employees as the ones who are always willing to stay late or come in early. But beware. Burnout is like kryptonite for employee engagement, even among your high-potentials. Employees with a bit too much drive might need some help keeping a balance, before they burn out and head for the door.

2. Sociable

Relationships matter. If they didn’t, Gallup wouldn’t have found that having a best friend at work can bump up profit by 12%.

A high-potential employee might not be everyone’s best friend, but they probably won’t be lone wolves either. But let's pause for an important distinction here, in HR circles, when we talk about "high-potential employees", we're often talking about candidates or employees who can move up the ladder into a leadership role — and as with any leadership role, your ability to work with people is crucial.

While your typical high-pot employee would ideally be able to socialize in order to get the internal skills, tools and buy-in needed to excel in a role, this characteristic might not actually apply if you're looking for someone who can perform at a high level within a set role.

In fact, organizations like the Israeli Defense Force have high-performing teams of neurodiverse talent that are fantastic at what they do, even though they may not check the box for "sociable".

3. Capable

There's just no cure for incompetence.

Beyond being good with people, high-potential employees are undeniably capable.

Tomas Chamorro-Premuzic, Professor of Business Psychology and Chief Talent Scientist at ManpowerGroup, found that high-potential employees are not only able to do the job, they can also handle more complex tasks and questions, and are able to step back and think critically about those tasks. According to Tomas, “creativity and a knack for systems thinking” are hallmark signs of high-potential talent.

4. Interested in deep growth

This characteristic can be phrased many different ways, depending on who you ask.

Douglas from ICEDR calls it, “catalytic learning capability” — basically, an individual's ability to take on new ideas and turn them into action. Claudio Fernández-Aráoz, a Senior Adviser at global executive search firm Egon Zehnder, calls it “seek[ing] understanding”.

Whatever you call it, at the core of the idea is a person's interest for deep growth. Employees who are eager to uncover new knowledge and opportunities beyond an established capacity or business "comfort zone" are typically excellent at finding profitable areas to expand into.

5. Practical (a.k.a. “Dynamic sensors”)

Curious, able, sociable, and driven are all wonderful things to be — but for many, these characteristics can come with a hidden tendency to bite off more than you can chew.

Enter the "dynamic sensors."

According to Douglas, individuals with dynamic sensors have the uncanny ability to see the difference between the tasks that yield reward, and those that are pure risk. “Their enterprising spirit might otherwise lead them to make foolish decisions, but these sensors help them decide, for example, when to pursue something and when to pull back,” he says.

At the end of the day, achieving high performance on the right things, is what moves a company forward. Some of your most practical employees will likely have the ability to sniff out the difference between the critical and the frivolous, without being overly skeptical or risk averse. (Either way, you'll want to make sure you give your people enough room to learn — even if that means embracing the occasional failure.)

6. Strong moral compass

If you google the words “the smartest guys in the room” you’ll find a documentary about Enron right at the top.

A culture of reward and recognition is a beautiful thing, but let's not forget: The only thing worse than wasted potential, is potential that's abused or misused.

Rewarding potential based solely on results only invites trouble. A high-potential employee might be great at consistently hitting performance outcomes, but if they use immoral or illegal tactics to achieve those outcomes, is it really worth it?

In addition to having their own moral guidelines, high-potential employees will boldly embrace the values of the organization. It's important to never look the other way on this one. Employees who cut others down just to pull themselves up won't make the best leaders once they’re at the top.

Creating your own high-pot characteristics

No matter what doors you’re trying to open, context is always key.

Though the above characteristics translate well to many organizations, the factors your business looks for in its people and leadership will depend on your unique culture.

In some roles and companies, speed is a priority, so “quick thinker” may need to be on your list. In other places, thoroughness matters more. In that case, you may be looking for your “detail-oriented” individuals. Compassionate, competitive, experienced — there are so many more characteristics that may need to enter into the equation depending on your organization's unique goals.

And your definition of "high-potential" should change just as frequently as your goals do.

The same way you look for specific characteristics in the people who will take us to the next level in our business, you've got to look at the characteristics of your talent management systems as well. Are your systems for hiring, coaching and promoting reflective of the goals and actions you need to take in order to reach your peak? Or is it time for an upgrade?

Develop a high-potential talent system worthy of your highest performers and you'll be surprised how many eagerly step up to the plate.

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Open Ended Questions to Ask Employees in Performance Reviews

In HR, business, and life, people search for answers when they should be looking at questions.

There are few places this is truer than in the case of the employee performance review.

If you're a regular here on the PerformYard blog, you know that we often cover performance management language, phrasing and general philosophy. This time, we're going to take it a step further by looking at the two fundamental types of questions (namely, open-ended and closed-ended questions) to see where each one belongs in your employee appraisal form.


PerformYard simplifies the feedback process so you can spend more time with your employees.  


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Why you should love open-ended questions

There's no shortage of performance coaching experts who swear by open-ended questions.

Leading executive coach David Brendel is one of those experts. David even goes as far as to say that “failure is rare when managers use open-ended questions thoughtfully.”

Why the love for open-ended questions? To boil it down, you don’t know what kind of answer you’ll get — and when it comes to performance management, that's a very good thing. With a typical closed-ended question, both you and the ratee know what’s coming. There is a range of set options (yes/no, strongly agree/strongly disagree, etc.) and everything else is left unexplored.

Open-ended questions, on the other hand, create an opportunity to discover completely new ideas and problems that might have otherwise flown under the radar.

Experts like David also point out that open-ended questions inherently exhibit more respect for an employee’s opinion. According to a survey from Right Management, showing that you value an employee's knowledge and insight can translate into increased engagement. The HR consulting firm found that 53% of employees named 'respect for their knowledge and experience' as their top expectation from leadership in defining "success at work", just above mutual trust.

What's the value of closed-ended questions?

If open-ended questions are so great, why even bother with closed-ended questions?

The answer: Data measurement.

As awesome as open-ended questions are, they can’t be as easily absorbed and "crunched" as closed-ended questions. Closed-ended questions are perfect for making manageable data out of thousands of responses to different questions. As the experts at SurveyMonkey, one of the world’s leading survey platforms, say, “[closed-ended questions] are designed to create data that is easily quantifiable.”

Read more on the challenge of managers rating employee skills and the right way to use ratings in your review process.

Actionable data is the main goal of the closed-ended question. It's also why, despite the growing emphasis on performance coaching and transparency, many employee appraisal forms are heavily weighted toward closed-ended questions.

But closed-ended surveys require the asker to really know their stuff. The reviewer needs to know not only what the company’s metric for success is — but also how to track and measure that metric or datapoint.

Taking Google’s managerial survey as an example, the closed-ended questions go after the kind of smart, targeted data that can identify whether a manager is succeeding in keeping the team on task, e.g., "My manager gives me actionable feedback that helps me improve my performance." They ask the reviewer (in this case, the employee) to Disagree or Agree using a 1-5 point scale because they know this is how they will measure their feedback across the organization — an end that a simple "Yes" or "No" answer couldn't achieve.

Google can now get a statistically relevant idea of how well or poorly the manager is performing and follow up with both the manager and the team to learn more. The University of St. Olaf sums it up well, saying, “a single closed-ended question can tell a researcher how,” but “it cannot tell the researcher why”.

How to strike the right balance

No matter how much performance data you accrue, you will inevitably hit a point where you need to know more about why things are they way they are within your organization. That's where open-ended questions come in.

But the main issue with open-ended questions, is practicality.

While it's easy to read the latest article in Harvard Business Review and agree that we should all be asking our teams open-ended questions regularly as part of continuous feedback, team brainstorming, and more, actually asking (not to mention sorting through!) a slew of open-ended questions is much more challenging and time-consuming.

Example 1: Open-ended follow-up questions

One way to hit the right balance of open and closed-ended questions is to use open-ended questions on a smaller scale review, after the bigger review has identified your problem spots.

For example, let’s say Company A finds out that overall, people feel engaged and satisfied at work, but their web design department is struggling. Company A can send out a smaller, much easier to parse, set of open-ended questions tailored directly to that department in order to learn more.

Example 2: Add a respondent outlet

Another option is to mix your open-ended why-seeking questions in with the closed-ended questions on the same appraisal form. This could be what SurveyMonkey and other experts call a “respondent outlet" — an open-ended question at the end of the survey (or sections of the survey) that gives respondents an outlet to say what they feel and fill in the blanks for you.

You’ve probably seen this method yourself on at least one customer survey. And there’s a decent chance you left the open-ended question blank — especially if it felt too generic. Unfortunately, many businesses use respondent outlets for show, which risks making them useless.

Google’s upward review is a great example of how to use a thoughtful respondent outlet to your appraisal form. They end with two simple, open-ended questions that specifically ask for one strength and one weakness of the ratee.

If your business is small and high-touch, you may be able to work with mostly open-ended questions in your employee appraisal forms. If not, using a mix of open and closed-ended questions could be the way to go in order to not only get performance metrics you can track, but also shed a light on the kinds of insights you can act on.

Learn more about asking the right performance review questions.

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How To Give a Negative Performance Review - 6 Communication Principles and +21 Example Phrases

Feedback is about as powerful in business as it is in rock n’ roll.

And when managers do it right, they can help make their employees (and themselves) look like total rockstars. But beware. Hit the wrong note and you could see your employees sprinting for the exit faster than you can say, “we built this city.”

We recently put together an article explaining what a performance review should do. While some of these things should be accomplished through the actual structure of your reviews (i.e., how often you do them, how you handle the implementation and follow up, and so on), another surefire way to improve your reviews is through the simple act of communicating better.

A simple example of why words matter

If you're at all skeptical about the power of words in employee performance reviews, take a minute to consider these two examples giving the same feedback with different phrases.

Example A: “Our last product had 56% more bugs than usual. What do you think we can do to ship a less buggy product next time?”

Example B: “You were much more careless with the last product and it was much buggier than normal. Find a way to fix it next time.”

Which one sounds more effective?

Words matter, plain and simple. Let’s look at some ways to make your feedback more effective, simply by hitting the right notes in your performance appraisals.

1. Focus on the job, not the person

If there is one key rule for delivering effective feedback, it's this:

Focus on the job, not the person.

Chances are, you've heard this before. You can find this advice on other business blogs and from best-selling authors, too. So why is it that so many of today's employees are disengaged and ready to walk out the door?

Bottom line: A person is so much more than their performance on the job. Any reasonable human being will resent being treated as anything less than what they are. Make sure you and all your managers are clear about removing hard adjectives or character-related judgments from their feedback. This is doubly important when giving women feedback, hard data shows women tend to get much more personality criticism than men.

For these examples, we paired a good and bad phrase together. This shows how a personal adjective you might be using can be easily replaced by job-related specifics. Notice that while the "Good" version feels softer, it actually gets the point across more clearly.


Bad: You’re too bossy and it's hurting team morale.

Good: Some of your team members have said that they would like more autonomy on projects.

Bad: You’re not very detail-oriented.

Good: I've seen some small errors in your client's accounts. Let's take a look at them together.

Bad: You’re not a smart enough on strategic thinker.

Good: We didn't hit our targets on our last campaign. What do you think we should do differently next time?


For more examples read "Why Employees Crave Negative Feedback"

2. Be specific

Here’s a common experience: You call a friend to talk for a while and after you go over a problem or two, you get some generic advice that you politely brush off and forget about a bit later.

From a friend or family member, that’s no problem. But we want more from our managers. We want specific, real feedback and next steps we can act on. Managing partner and leadership expert Jennifer Porter writes that feedback should be “behavioral and specific” as well as “factual, not interpretive.”

For example, a manager saying, “You’re doing great!” isn't all that helpful. A manager saying, “You’re doing great work by going out of your way to overhaul old systems and point out areas where we can improve!” becomes infinitely more helpful. Now the employee knows exactly what they did that was great and can do more of it in the future.

The manager can specify further with facts, saying, “Your work overhauling old systems has made IT’s lives so much easier. They’ve seen a 60% drop in troubleshooting requests!” The employee now knows that they did great, how they did great, and what doing great meant for the business.You can also apply this to the graded scales inside your reviews. Because, let's face it. Phrases like “From 1 to 10, rate this employee’s leadership/interpersonal/customer service skills” are pretty vague. If cutting or reworking these industry-standard questionnaires seems daunting, remember that best in class companies like Deloitte have already done it (and saved themselves a ton of time in the process).


  1. Since we’ve added you to the team, everyone’s looked happier and we’ve seen an engagement bump among your teammates.
  2. During our expansion, your suggestions were very helpful. In fact, the store you suggested to add in Montreal is outperforming some of our main branches already.
  3. While your advice is spot on, nearly half of your clients have told us they felt you weren’t clear about it in the early parts of the consultation.

Learn why we love advice from some people and hate it from others.

3. Consider questions over statements

Business Insider’s Careers Editor, Jacqueline Smith highlighted 17 great phrases bosses should say during performance reviews. 10 out of 17 were questions, or had a question in them.

Giving feedback can seem like the time to come out with hard statements, but in truth, we often want our performance reviews to be more than just reviews. On top of how we did, we want to know how we can get better and how invested you are in helping us succeed.

Questions are a great way to open up a discussion on how to move forward, while letting the the employee lead the way. And honestly, many managers, especially the ones further up the hierarchy, might not know how to address an issue better than an employee. Employees can provide valuable insight on the company, alerting managers to blind spots and nipping potential problems in the bud.

Finally, questions help create a culture of feedback and honesty. Asking questions about the company, the team, and even the management can let employees know that they aren’t the only ones trying to improve.

Astrophysicist Alan Duffy points out that powerful questions don’t have to be complex to be strong. Simple questions about the things going on around us can motivate BIG change (like Einstein’s theory of relativity big!). If you’re looking for more info on how to ask the right questions, we’ve got a full article on that topic, too.


  1. How can I help you do (even) better next time?
  2. Is there anything that you or your team needs that you’re not already getting?
  3. What do you really want improve on?

4. With positives, stick to process. With negatives, stick to progress.

Research from social psychologist Ayelet Fishbach at the University of Chicago found some fascinating connections between chasing goals and feedback. She found that when someone did something positive, focusing on the process helped keep them engaged with the goal, whereas focusing on the progress prompted them to rest on their laurels a bit.

Ayelet also found that the reverse was true. When someone did something negative, focusing on the losing process made them lose interest in the goal, while focusing on ways to move forward from the lack of progress helped keep their spark alive.

Examples for handling positives:

  1. You did great work on reworking the landing page last month. How can we start transferring that to the rest of the funnel?
  2. All of our clients were raving about your presentation. Let’s think of some ways we can keep that going for our next event in October.

Examples for handling negatives:

  1. I know you missed your sales target for this quarter, but that’s just this quarter. What are some new ideas we can focus on to get back on track?
  2. Customer surveys told us that they didn’t feel like you knew the product very well, when you master these new features, I think you’ll do really well.

5. Connect personally where you can

When an employee knows that their manager has been in their shoes before, it makes any feedback or advice more meaningful, while humanizing the manager.

Learning technologist Chris Gaudreau writes, “sharing personal experiences makes the feedback feel more authentic and meaningful.” While Chris is talking about teaching students, his advice can help anyone in a mentor or coaching role. Sharing a personal experience is a great way to show empathy, demonstrate experience and build a personal connection. Given how awkward performance reviews can get, that absolutely matters.

A couple quick caveats: Managers should avoid telling too long a story or making the feedback session about themselves. They should also double-check internally if the story is relevant and explain the link a little bit to make sure it's helpful.


  1. I ran into a problem just like this when I was starting out. Here's a great piece of advice from my then-boss that helped me a lot.
  2. This reminds me of a situation an old team member of mine got into once.
  3. This is a more common mistake than you might think. I’ve made it myself a couple times. Here’s how I stopped.

6. Get serious but don’t get mean

In hoping to help out an underperforming, high-potential employee, a manager might feel the pressure to get well, mean. That's a massive mistake.

There are plenty of examples in Hollywood of the over-the-top mentor who pushes a prodigy into excellence. But in reality, this approach is more likely going to end in a meltdown and some undesired turnover.

Research shows that we remember negative moments more strongly, though not more accurately, than positive ones. The real question is, how can a manager stay diplomatic in delivering negative feedback?

And the answer? Call on all these communication principles to help you out.

Connect personally to remind an employee that everyone makes mistakes, it’s how you recover that matters. Ask questions to get to the root cause and make the individual feel more at ease. Be specific and provide facts and examples with to help the employee understand the problem and accept that the feedback is fair.

And of course, never make it personal. You want the employee to spend their time focusing on the job, not doubting their worth as a person.


  1. Last quarter, you found great samples for our surveys, but we double-checked your math and found mistakes in several figures.
  2. Before we talk about areas where I think you can improve, what are some areas you’d like to improve on?
  3. You fell behind on some deadlines and that put some of our other employees in a crunch. How can we get your process to run a bit faster?
  4. Losing that client was unfortunate, but it happens to the best of us. Actually, it happened to me in a similar way. Here's what I learned.

If you've lost control of your emotions, you should hold your tongue. Here are three other times you should NOT give negative feedback.

Final Takeaways

These are just six principles to help guide you to a better conversation in your next performance review. Keep in mind that every review, employee and culture is different. This principles are grounded in research (as well as HR blood, sweat and tears). But how you use them to create and follow through on your own performance strategy is entirely up to you.

No matter which words you choose, stay true to the fundamentals and your employees will thank you.

Learn More About Negative Feedback

  1. The 5 Personalities on Every Team: And how to coach them
  2.  7 Questions Managers Should Ask Unhappy and Disengaged Employees
  3. Deliver Criticism Employees Appreciate
  4. Do Your Employees Want Negative Feedback?
  5. 4 Crucial Times NOT to give Feedback
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What is a performance gap? (And how can you close it.)

The performance gap is one of the simplest but most overlooked business concepts out there. Miss it, and you could be putting the very survival of your company at risk.

Simply put, a performance gap is the difference between intended and actual performance. This can happen at any level of the organization. For example there can be a performance gap with one particular salesperson who doesn't hit their target, with an entire sales team who falls short of the goal, or with the sales process itself not responding promptly to requests.

Performance gaps are a real problem and you'll need to bridge them if you want to stay profitable long after the competition has come and gone. Let’s take a look at a few common causes for performance gaps and how to avoid them altogether.

What causes performance gaps?

Let’s start with one of the most common causes of a performance gap: Lack of clarity.

Despite rampant advice to establish clear goals and expectations from day one, many employees feel completely left in the dark about what is and isn't ok at work. In a 2015 Gallup survey, only 50% of the American workers surveyed said they firmly knew what was expected of them at work.

Employees can’t meet performance standards if they don’t know about them. By simply setting and maintaining clear performance targets for your people, you can prevent many of the most common (and costly!) performance gaps.

How to set the right goals

The first step to closing a costly performance gap is to get crystal clear what the real goals and expectations are in your organization. (Hint: They are NOT the same thing.)

Not sure what goals and standards to set, change or replace? Why not ask the people who know you best? Start with your customers. Ask them why they continue to work with you and what they want to see more of. Then, it's time to check in with your employees.

By reaching out to employees (through surveys, one-on-ones and regular performance reviews), you can get an accurate assessment of what standards to set. You'll also get a clearer picture of the standards that aren’t being met, and the exact steps to take to prevent future performance gaps.

With real-world insight at your fingertips, it will be much easier to set challenging yet reachable goals. When setting goals, be sure to make them SMART: specific, measurable, achievable, relevant, and time constrained. These five categories keep you away from the type of flimsy goals that are inherently prone to misinterpretation. (Values like, “Always try your best” are great ideals, but they're nowhere near clear enough to be bona fide goals.)

What about skill gaps?

Clear goals are a must, but sometimes the problem can be a simple lack of skills or tools.

A skill gap occurs whenever the goal can’t be reached because some part of the company, whether that be an individual employee or a whole branch, lacks the skills needed to reach it.

Skill gaps are pretty common — especially when industries shift. Coders have to learn the latest cutting-edge platforms, customer service pros need to stay up-to-date on the latest best practices, and so on. Anticipating a skill gap takes the kind of research and high-level thinking few of us have time for. Luckily, closing them is a bit simpler.

For the most part, you can either train or hire your way out of a skills gap. If your business is running well overall — meaning there are no major problems in leadership, management, staffing, etc. — feel free to train away! But if your business is understaffed, overworked, or simply pointed in the wrong direction, no amount of training can help close those gaps.

In those situations, a focus on performance makes all the difference.

Motivation cures performance gaps

Even if you're convinced your employees know exactly what targets to hit, and that they have the skills to hit it, they will miss if they don’t feel like pulling the trigger in the first place.

Business consultant and author of Good to Great, Jim Collins says it best in brief. The question isn’t, “ ‘How do we motivate unmotivated people?’. It’s, ‘How do we lead in such a way as to not demotivate people?’ ”

To avoid demotivating people, Jim recommends three strategies:

  1. Address problems - no one wants to feel left in the dark, especially on things that could result in termination.
  2. Don’t come into a meeting with a decision already made - employees want to be heard, know how to have a dialogue.
  3. Show tangible results - people want to see proof that their work matters.

Building performance expectations on a foundation of clear, data-driven goals will earn you a ton of respect from your employees and keep them motivated to steer clear of performance gaps. Instead of arbitrarily expecting them to hit targets they don't understand, you're using data-backed insights to set metrics that matter.

After that, all you have to do is follow up to let them know you care enough to keep paying attention and ensure that they have the skills and tools they need in order to get the job done.

When those boxes are ticked, you’ll be closing gaps well before you fall into them.


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How To Identify Low Performers

Did you know that managers spend about 17% of their time working with low performers? Yes, you read that right. Your managers spend almost 1 day of each week dealing with poor performance. When you take a deep look at it, these poor performers are costing your company a lot.

When your company has many departments and businesses processes, it won't be easy. But, tracking poor performance in your business isn't impossible.

It doesn't matter how big or small your company is. The best way to do this is by using the right employment performance management system.

Still, think we're barking at the wrong tree? We're going to show you how using the right system will help you identify low performance.

Read on to learn how!

Can You Fix Poor Performance at Your Company?

Yes, you can fix poor employment performance at your company. The key is how to identify it early enough that you can fix it at the right time. What makes performance analysis complex is that not all departments run the same way.

As a company, you can't measure your sales team the same way you would your human resources team. Most of the time, performance evaluations fall on the department managers.

When your management team has to spend more time on the performance of their employees than on company goals. It translates into your business running slower and less efficient.

Having a system in place that runs all your performance reviews and check-ins can fix this. It will make it easier for your managers to focus on getting more business done.

How Can the Right Performance Management System Help Your Company?

These systems can help take your company to another level. Many companies look at performance only from a performance appraisal point of view. But, this is one of the many ways you can measure an employee's performance.

Not all employees work the same way. That's why the right system will focus on these areas to help you fix performance issues:

Performance Reviews

Performance appraisals have become essential in measuring your employees' performance. We know that there's always a time of the year where these become a headache for every manager and employee. Many companies work on a one size fits all way by having one set performance review form for all employees.

Yet, at the end of the day, we know that every department doesn't work the same way. It would be ideal for every department to have their own tailored form. The right system will provide you a way to customize your performance review forms for each department.

This way you can measure your employees based on your company needs and expectations. Another way, this system can help is by giving you the option to deploy these reviews at a set time. This means that you can decide if you want some departments to run their performance reviews at a set time.

This can help human resources be more efficient when these reviews come their way. Also, the right system will provide you the option to track goal performance in your reviews.

This will give management a way to track how your employees have been doing on their work performance goals. Tracking progress is essential to identifying low performance. These options will give you updates for you to fix the problems on time before they become a headache.

Goal Management

As your company keeps evolving, so are the goals you set for your business and employees. The work performance goals that were set at the beginning of the year aren't the same mid-year. The right system will provide you a way to track the goals set for your employees.

It will give you a dynamic way to track and update these goals. This will help your employees visualize their progress. This way they'll have a clear idea of what's expected of them.

Also, a goal management system can help you motivate your employees. Since they know where they stand, your employees can work toward what they want to achieve.

This option will help you identify low performance early when it's related to established goals because of the constant monitoring. Identifying these deficiencies can help take your company to the next level faster than you'll expect.

Continuous Feedback

Did you know that almost 60% of employees would like to receive feedback on a daily or weekly basis? Yes, we may not be huge fans of negative feedback. But, if it's delivered in the right way it can do wonders for an employee's performance.

The right system will give you the option to provide continuous feedback to your employees. This way you can identify and document low performance as well. The system may also provide you with ways to give 1 on 1 feedback and keep confidential employee feedback notes.

This will make your manager's job easier and provide a friendlier system to communicate with your employees. About 62% of employees have said that they would work harder if their employer recognized their efforts.

This means that your employees will be happier if you use this system to recognize their performance as well. Happy employees translate into better performance and efficiency. Your employees are the heart of your company so if they perform better your company will be smooth sailing all the way to success.

Can Employment Performance Management System Be the Right Call?

Yes, an employment performance management system can be the right call for your company. This type of systems gives you control over the performance data of your employees. When it comes to poor performance, the more you know the easier it's to fix.

The right system will help you identify low performance in each of your departments early enough for you to make the changes. If you're able to do this, it will translate into your company running better in all areas.

Remember to look for a system that fits your needs focusing on performance reviews, continuous feedback and goal management. If you find the right system, you'll be able to take your company to the next level in no time.

Are you looking for the right employment performance management system? We can help!

Contact us to learn more about our services.

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3 Examples of Performance Management Processes (to inspire your next review cycle)

There is a large body of online content offering general tips and guidelines on performance management. And sure, they can be helpful. But they can also be a

Performance management should be unique to the needs of your organization. Rather than speaking in broad terms about what makes for a great performance management process, let’s take a deeper look at three examples (extreme examples) of performance review processes, and the management strategies that support them.

1. Jack Welch, GE, and rank and yank

The story of Jack Welch and his epic "rank and yank" system is one for the business annals. To date, it just may be the biggest examples of stack ranking in the workplace (not to mention the most extreme).

For decades, Jack Welch and the leadership team at GE ranked employees into three categories — top performers, underperformers, and normal employees. The top performers comprised the top 20% of employees, the bottom 10% were labeled underperformers, and the remaining 70% were neither here nor there.

And those poor underperformers. Under Jack's ruthless leadership, those 10% of employees were often fired on the spot — and the feedback given was very candid. Welch felt that "failing to differentiate among employees — and holding on to bottom-tier performers — is actually the cruelest form of management there is."

To be fair, Jack didn’t use rankings solely for firing. Ranking was as much about growth as it was about assessment. He called his process "differentiation" and paired it with tools and coaching approaches to build up the 90% of employees that were performing up to par.

Business writer and consultant Ron Ashkenas notes that Jack’s differentiation “assumes that most people have the capacity to continually grow if they are stretched, challenged, and developed.” To match that belief, Jack offered in-depth assessments, rotation programs for new hires, training programs for new managers, and mentoring.

Though it's not as headline-worthy, ranking and yanking could actually be secondary to coaching in the legacy of Jack Welch. After all, he even had a campus where he brought high-potential executives and employees for intensive training and lectures that he sometimes led himself.

While it's tempting to view GE's rank and yank as a cold and detached way to manage employee performance, a case could also be made that it's actually a very human and hands-on approach.

2. Asana, lots of feedback, LOTS of trust

Asana is an innovative tech company and popular team communications platform. And like the name could suggest, they have a surprisingly zen approach to performance management.

Rather than approaching feedback annually or linearly, Asana does feedback often and in very different ways (for example 100% face-to-face and with 0% paper trail).

According to a deep dive into the company from Rachel Zurer at Conscious Company Media, Asana has a self-review at the end of each year, on top of a biannual review of the company’s general direction. During the biannual review, the team takes weeks out to discuss specific goals and performance-related issues and hold regular feedback sessions with peers and managers in a closed retreat-like setting.

But a performance management process this hands-off could never exist without a strong culture to back it up.

Throughout the year, Asana maintains a strong focus on growth, transparency and trust. Instead of a traditional business hierarchy, the company is broken down into what they call AOR’s - Areas of Responsibility. An AOR might be "marketing", or "customer service", or any other area within the business. Asana’s founders offer opinions to AOR-holders, but ultimately trusts them to make the final call.

To manage their AORs, and all the feedback given, Asana actively works to keep the load lighter and the human contact tighter. New managers only have 4-6 employees (or, "reports" as they call them at Asana) and experienced managers have 8-10.

It's tempting to see Asana as being on the other side of the spectrum from GE, but their focuses are similar. Both companies want to grow their employees, but each company looks very different (startup vs. massive manufacturer) and as such, they arrived at very different solutions.

3. Valve’s performance management "Flatland"

Valve is a video game company that has made some of the world’s most popular games. The company has roughly 360 employees and well over $1 billion in annual revenue.

As you would imagine, it's a wildly creative company. To stay that way, Valve shed all hierarchy and created what they call, “Flatland”. Valve writes in their employee handbook that, “when you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value.”

In Flatland, employees create teams as needed. Their desks come equipped with wheels so they can rearrange their space. Hiring is also an employee initiative and they're encouraged to interview candidates and help make hiring decisions.

Given its unique culture, you might think Flatland would have a pretty "out there" performance review system. But according to author of Under New Management, David Burkus, that's not so.

Valve creates a team of employees who conduct performance interviews with everyone in the company, asking them who they worked with and what their experiences were working with that person. They anonymize the feedback and present it to employees. It’s a fairly standard 360 system.

According to their former economist-in-residence, Yanis Varoufakis, "It is important to understand that such spontaneous order-based enterprises rely to a large extent on individuals that believe in the social norms that govern their existence. So by the very nature of the beast, you don't have people there who try to hide and who try to somehow create a smokescreen around the fact that they're not very good at what they do."

When someone can’t quite fit in, they talk to the the employee to find a solution. If firing is the consensus, they make an attractive severance offer and part on amicable terms.

Flatland, rank and yank, or AORs might not fit for many businesses, but they're a great reminder to try new things and commit to the unique "extreme" that works for us.

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What Is Continuous Feedback? Real-World Examples from Adobe & Typeform

If you’ve gone anywhere near the HR echo chamber, you’ve probably (perhaps even unconsciously) internalized the fact that feedback should be continuous.

The case for continuous feedback is grounded in solid data. For example, a 2015 Robert Half survey shows that just over half of employees want at least quarterly discussions about their career path and growth prospects.

In another survey, Deloitte found that 90% of companies that revamped their performance management model — usually to one featuring more regular feedback — saw improved employee engagement.

Clearly continuous feedback is the real deal. Yet, amid all the buzz, it’s easy to lose track of what continuous feedback actually is and whether or not it makes sense for your organization.

What is continuous feedback?

The term "continuous feedback" can mean different things to different companies. In a nutshell, continuous feedback is any feedback that is delivered on a regular basis.

For many companies, continuous feedback includes structured reviews. For others, it could mean an entirely informal system with no scheduled reviews whatsoever. At the end of the day, "continuous" is as subjective an adjective as "beautiful". Its value is held within the eye of the HR beholder.

Let’s take a quick look at how continuous feedback became the HR trend du jour and dive into some real-world examples that can help you decide if it's the right option for you.

A brief history of continuous feedback

Pinpointing the true start of any movement is always tough.

That said, Peter Cappelli and Anna Tavis put a pretty solid effort into finding out how continuous feedback became king.

The HR experts split performance review systems into three types:

  1. Accountability focused - Matches reward and punishment to performance. Tends to flourish when the labor market is flush.
  2. Development focused - Builds up employee skill sets and maximizes potential. Tends to flourish when the labor market is thinner and more competitive.
  3. Hybrid - Any combo of the above.

Data suggests consistent feedback is always good, but whether you focus on accountability, development or a hybrid depends on the situation you're in.

Over the last decade, labor markets fluctuated wildly. The financial crash meant layoffs and layoffs meant a thinner workforce. Then, as things picked up, the labor market got tighter. But "hiring" in the traditional sense has decreased as millennials entering the labor market rotated jobs more frequently and as the gig economy developed.

In comes continuous feedback, a hybrid tool focused on developing (and keeping) employees in a growing, but mobile labor market.

According to Peter and Anna, the earliest notable case of switching from annual to instant feedback was Colorcon, a big pharmaceutical company, back in 2002. The watershed moment however, came in a one-two punch when Kelly Services changed their review system in 2011 and then the big fish, Adobe switched to continuous feedback in 2012. Which leads us to our first example...

How Adobe uses continuous feedback

Adobe may have one of the most famous continuous feedback systems out there.

They even have a public Check-in Toolkit that can help you DIY your own strategy from their model. The Toolkit’s core recommendations can be boiled down to three stages of feedback:

  1. Establishing expectation
  2. Providing feedback
  3. Developing the business and employees based on the feedback

At minimum, Adobe encourages quarterly formal check-ins of 60 to 90 minutes each. They also encourage giving informal feedback more often.

But the Rome of continuous feedback wasn't built in a day. Being such a large company, it took Adobe months of testing, planning and extensive manager-training to make everything come together.

The essence of Adobe's continuous feedback model focuses on strengths and setting SMART goals. They regularly update goals and progress and make practical plans based on those performance metrics. Documentation and ranking play a much smaller role than they did in the pre-2012 days.

Continuous Feedback at Typeform

Unlike Adobe, survey platform startup Typeform didn't have a huge ship to turn around.

In fact, when the company had just started, it was so small that regular check-ins and reviews happened organically, without any system at all. But when their workforce nearly tripled, they knew they needed to get a structure in place.

Today, they've literally "baked" employee feedback into their culture. “Feedback is not a dirty word. When experienced properly, it fosters growth and reinforces trust.” says Typeform Head of People Operations, Georgina de Solà.

Typeform's continuous feedback strategy includes:

  • Regular feedback for employees and managers
  • Employee engagement surveys
  • 360-degree performance reviews

It's worth noting that the young company also uses some more traditional feedback methods, like a suggestion box and opportunities to ask the founders questions.

They also improved the quality of feedback by hiring a communications specialist, taking on an HR platform to distribute bonuses, and doing feedback workshops called “The F-Word”.

Typeform is as "all-in" on feedback as Adobe, even if they're a bit less formal.

It's important to think about giving feedback not only continuously, but also critically. What aspects of these continuous feedback approaches would fit the natural rhythm of your industry? How drastic of a cultural change would you have to make? What system or approach will make the change as easy as possible?

Continuous feedback is great for good reason, but at the end of the day, no system is effective unless it meets the needs of your unique company and people.


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How To Choose Performance Management Software

One of the foundational ideas behind modern performance management is digital systems. The frequency and complexity becomes too big of a distraction unless it can be automated away with software.

All the recent performance management transformations, like Adobe, Deloitte and GE have been enabled by technology running in the background.

If you are designing a modern performance management system for your organization, you should also be considering performance management software.

Here is what you should be looking for.

What Is Performance Management Software?

This software enhances organizations' performance by driving employee productivity. It ensures that teams and individual employees are aligned with the organization's goals.

A performance management system essentially eliminates the annual employee review process. Instead, it promotes high-quality real-time feedback, performance tracking, and goal setting.

In other words, the system does what tedious annual reviews cannot do. It enables businesses to adjust employees' goals as business conditions change.

Put another way, annual reviews focus too much on the past, while performance management systems focus on future needs.

Just as human resource departments handle annual reviews, they oversee performance management systems. This includes teaching employees and managers how to use them.

Software Goals and Features

Well-designed performance management systems are aimed at keeping your employees engaged and motivated. The more energetic they are, the higher your organization's daily output will be.

Ultimately, this helps to reduce staff turnover. It also boosts productivity and enhances operational efficiency. In other words, these systems tie performance into a business's bottom line.

What to Look for in Software

Want a performance management system to work for you? Your organization must promote constant communication between managers and employees.

After all, a major feature of today's performance software is 360-degree feedback. This feedback includes input from not only employees' supervisors but also subordinates and peers.

Effective software also interacts with workforce analytics. In this way, you can easily analyze data. Then, you can compare this information with the data you receive from sales performance and financial management systems.

The Present and the Future

Performance management systems use live dashboards for collaborative and quick reviews.

In addition, they can report individual-, team- and project-level performance. Today's systems can also provide helpful employee rankings.

The future of these systems appears to be bright, too, given the improvements that have been made in artificial intelligence.

For instance, many studies have reported that gender bias is a major problem for female workers during performance reviews. However, artificial intelligence-enabled tools that can detect bias in language patterns are already being used in recruiting software.

Work Standard Consistency Benefit

Performance management systems offer multiple benefits. One of them is that they can help employees' work standards to remain consistent.

A performance management system maintains a collection of human resource data. It then follows an established protocol for feedback, reviews, transfers, and promotions.

As a result, you don't have to worry about discrepancies in your company's work practices.

This makes your organization appear more credible, thus leading to a more ethical and better company culture.

Personal Development Benefit

With a performance management system, your organization can promote personal growth and career development more effectively.

The software provides a forum for your company's senior management to create, monitor and update workers' personal development plans.

Of course, the goal here is to give workers strong autonomy and control when it comes to their career paths.

A personal development plan assesses a worker's current skills and charts out his or her development route.

The development plan also allows for training sessions. This is because training helps to uplift the whole workforce's competency levels. This enables the organization to keep moving on a trajectory focused on high growth.

Flexibility Benefit

Employees generally appreciate independence, not micromanaging.

This is why performance management software is so invaluable. It automates routine human resource jobs to give your entire workforce more flexibility and freedom.

The freer your workers feel, the more motivated they will be to do their best and to be innovative. Also, the more confident they will be in their individual job roles.

Goal Setting Benefit

Employees can't be engaged unless they understand how they contribute to meeting their organization's goals.

This is why your workers need to have definite goals they can stay focused on achieving.

Fortunately, performance management systems enhance the company's goal-setting process. How? By taking advantage of the increased communication taking place among all management levels.

As soon as a worker has clear objectives, he or she can plan his or her target path. The employee can then use relevant business resources to achieve his or her goals.

How We Can Help

Want your company to be successful? Your workers must understand their objectives. They must also receive helpful guidance and stay invested in the organization's goals.

A performance management system can keep your organization's diverse group of workers as engaged as possible.

That is why we have created PerformYard, a flexible performance management software solution.

We take your requirements seriously. We'll help you to manage your staff's performance in a single place, including handling feedback, reviews, and goals.

In fact, you can see your review process results through various exports and visuals. These tools make it easy for your human resource team to complete the necessary analysis to identify and reward top performers.

We also stand out for offering an automated and streamlined experience.

Most initiatives involving performance management fail because they are inconsistent and clunky. But we remove the unnecessary steps and headaches from your company's process.

In this way, employee and manager participation is painless -- the way it should be.

Get in touch with us to find out more about why hundreds of our unique customers have turned to PerformYard.

Just as we have helped them, we can help you to improve your company's performance and bottom line long term.


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Heuristics in Performance Management

Ever since the HR world woke up to the idea that the workplace is dependent on humans and not red tape, the idea of using behavioral insights to guide business decision-making has been gaining traction.

Behavioral economics is one of those HR "trends" that we know is important, we just don't know how...exactly. We're going to take a closer look at one of the main principles of behavioral economics to get a firm handle on how it might be helping or hurting.


Here's a straightforward definition from Wikipedia:

"In psychology, heuristics are simple, efficient rules which people often use to form judgments and make decisions. They are mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others."

In psychology circles, heuristics are also known as rules of thumb — mental decision-making hacks that help us make a call faster.

In her article for Psychology Today, cognitive behavioral therapist Alice Boyes gives some practical examples of heuristics in daily life.

"Rule of thumb: If it's the third time I've thought about a small decision, it's time to make the decision then and there. Specific example: A piece of mail came in about something in my neighborhood where the public could make submissions. I had it sitting around, and needed to make a decision about whether to read it properly or not. After glancing at it twice, on the third time, I ended up putting it in the recycling without reading it."

How much easier would life be if you always knew exactly when to scrap the junk mail? Or when to address (or NOT address) a situation with a top-performing employee?

The pros and cons of heuristics in the workplace

Heuristics are a crucial behavioral tool because they give us the ability to practice the kind of snap decision-making that's often necessary in the fast-moving world of business.

But shortcuts can be dangerous.

Heuristics are naturally prone to bias and, due to their quick nature, they can sometimes tempt us into making a rush decision at times when a slower, more rational approach would lead to a better outcome.

Here's a closer look at the pros and cons of heuristics in the workplace and in the world of performance management, specifically.


  • Research shows that heuristics are excellent “tools for uncertainty."
  • In chaotic environments where there is a lot of noise (i.e. meaningless data and analysis) and fast decisions are needed, heuristics can help pave a clear path through the chaos.
  • Heuristics can a help a business move more quickly to seize opportunities.
  • They offer an alternative to data, in scenarios where data is more inconclusive than conclusive.


  • Research has also found that positive framing, arrogance from decision makers and contextual factors like emotion and culture can make measurements of candidates or employee performance less accurate.
  • Availability bias, the tendency to put increased importance on things that are larger in one’s memory, is often found in heuristics.

There are plenty of healthy heuristics your organization might already use, like “trust your team” and rank and prioritize problems according to their impact on customers, etc.

But as mentioned, heuristics do create problems. In fact, that’s part of why they came under the spotlight in the first place. In their groundbreaking research, behavioral economists Amos Tversky and Daniel Kahneman found that heuristics often make us prone to making poorer decisions, without even knowing it.

(Funny enough, this is part of what makes people fear sharks more than mosquitoes, when in actuality, mosquitoes kill many more people than sharks. Anyone who's ever watched Jaws will agree that shark attacks are much more vivid than an unseen virus carried by a mosquito.)

Whether it’s jumping on a flash-in-the-pan HR trend or letting recent strong performance get in the way of a holistic assessment, heuristics can creep into parts of the workplace that are better left to rational thought.

And the racial, gender, and demographic biases holding businesses back? Yes. Those are heuristics, too.

Get real about your "rules of thumb"

The best way to use heuristics is the best way to use any tool: intentionally.

Don’t let your rules of thumb lurk under the surface. Take an honest look at your heuristics and ask yourself a few objective questions to see how well they work.

  • Do they have a good basis in reality?
  • Have they helped your business in tangible ways you can measure?
  • Is there data to reinforce or replace your heuristics?
  • What heuristics are necessary to match the pace of your organization?
  • When is it better to slow down your decision-making process?

In the words of cognitive behavioral therapist Alice Boyes, "Use rules of thumb to make your decision-making better, not perfect."

Rules of thumb can help you stay flexible, but not when you’re all thumbs and no thought. Acknowledge your own heuristics and those of your managers, and you may end up with a more just, rational and productive workforce.


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Tactical Performance vs. Adaptive Performance: Why You Need Both.

Carl Reichardt is one of those epic CEOs business authors love to write about.

In the late '80s, he famously led Wells Fargo through an historic cost-cutting exercise that delivered returns of 33.5% to shareholders, despite a massive real estate crash that put many of his competitors out of business.

Carl was ruthless. He froze executive pay raises, closed the private dining room and sold the corporate jet. His penny-pinching ways ultimately earned him the title of, "The Banker Who Would Be Scrooge".

"There's too much waste in banking. Getting rid of it takes tenacity, not brilliance," he proclaimed. It was a mantra that would go down in business history.

Which got us thinking…

What's the real difference between tenacity and brilliance? Can a business succeed with one and not the other?

There are TWO Types of Employee Performance

Lindsay McGregor and Neel Doshi are co-authors of Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation.

In researching for their book, Lindsay and Neel asked 2,823 US-based employees whether they have the ability to find new ways of working. Only 27% said yes.

That's because the vast majority of businesses only measure an employee's tactical performance. That is, the steps, process and standard operating procedures that can be easily tracked from one day to the next. Number of widgets produced per hour is the classical example of a tactical performance metric that can be found in almost every business system.

The ability to consistently complete these tasks to a highly efficient degree is what constitutes a company's "tenacity". So it follows that this is how most employees should be measured.

But there's another type of performance that often gets overlooked.

Adaptive performance is an employee's ability to innovate a better process, standard or SOP. When an employee comes up with an idea for how to shorten the number of steps in the assembly line, or veer off-script to creatively upsell a client — that's adaptive performance in action. Some might even call it brilliance.

In the words of Lindsay and Neel, "Essentially, tactical performance is how well you stick to your plan, and adaptive performance is how well you diverge from your plan."

Why You Need Both

Carl Reichardt's cost-cutting crusade was clear, consistent and easily measured.

It's success was largely due to executing simple ideas.

Before Carl, Wells Fargo had exuberant culture that would have surely led to its demise. The Scrooge CEO rolled up his sleeves, did the simple things with tenacity and saved the company in the process.

Many employees don't have the luxury of CEO-level autonomy.

That's why it's important to consistently encourage (and measure) both an employee's tactical and adaptive impact on the business.

(In an ironic twist, Wells Fargo's overemphasis on tactical goals may have been part of what led to its recent account fraud scandal.)

A balance of tactical and adaptive performance is what helps even the scales between goals and expectations so employees don't feel pressured to compromise the business values (or their own morals) just to hit a target.

Striking the Balance

Tactical and adaptive performance are the yin and yang of every high-performance business.

In order to free up your employees to innovate new efficiencies, you must protect their time. That means delivering the tactical performance structures that help them produce quality work faster so that they have time and energy to think creatively about how to do things better.

To strike that balance, spend some time thinking about which specific aspects of an individual's role absolutely must be measured on the tactical level versus those that can be opened up to adaptive performance.

For example, could you grant your new business team the autonomy to spend up to X amount of money in discounts, refunds or gifts without manager approval? How does this affect your NPS score and close rates?

Look beyond the non-negotiables to identify clear places where employees can act autonomously. Then focus on the impact their adaptive performance has made on the organization. And if you're ever in doubt, simply sit down with your team and ask for their ideas.

Here are some questions to think about:

  • What rules, processes or guidelines could be improved?
  • How can we increase the department's productivity?
  • What are your ideas for how we can do X better or faster?
  • What have you learned or noticed since last year/quarter/meeting?

Build the balance into your culture by making these sit-downs routine. Next time the proverbial "stuff" hits the fan, you'll be glad you did.

Keep going: Why modern performance management incentivizes both tactical and adaptive performance, and what else sets it apart from traditional approaches.

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Balancing Structured Reviews and Unstructured Feedback

Sometimes it can feel like we’re forced to choose; between a tightly managed stack and rank annual review system, or thoughtful in-the-moment feedback from manager coaches. Popular headlines are often about “Dropping the Performance Review” in favor of feedback, or “Why X Company is Going Back to Performance Reviews.”

The reality is that most organizations choose to land somewhere in the middle. HR finds ways to provide the right amount of structure to achieve the organization’s goals, while still giving managers and employees the flexibility to engage in one-to-one feedback. For more, we created a guide all about designing the performance management process for your organization.

With this in mind we asked 4 practicing HR influencers, from 4 very different organizations, to tell us how they think about structure and flexibility when setting up a performance management program.


Nicole A. Roberts, SHRM-CP, PHR

Director of Human Resources at Compassion-First Pet Hospitals

It depends on your culture and needs. It’s not so much the structure as it is the comfort level of the people delivering the feedback and the utilization of the tools available that makes the difference. Prior to implementing any new system or tool, talk to your managers and find out what they are currently doing, and what is a pain point for them. If your shiny new system or process can address a pain point, that’s a win for everyone. What works for one organization may not work for another. No system will solve world peace – or even organizational peace, so have realistic expectations. Any new system or tool must be accessible, easy to use, and be perceived to make the manager’s job easier – not harder. HR can’t be the sole driver of the process. Your most influential people can be your greatest adopters and champions of your system if you utilize them as your pilot testers. Then HR isn’t telling others about this great new tool we love. Of course we love it, we’re HR. This is cool to us. If other managers love it, tell their peers, and adoption spreads, you will have more guaranteed long-term utilization.

Nicole is currently holding down her dream job, combining her love of animals and passion for HR, as Director of Human Resources at Compassion-First Pet Hospitals, a family of more than 30 emergency and specialty veterinary practices with locations across the country. Drawing upon more than 14 years of proven experience throughout Human Resources, specifically in the manufacturing, telecommunications, and veterinary medicine industries, Nicole has a proven record of establishing HR as a vital business partner with an earned reputation as an intuitive, wide-ranging HR Generalist. Nicole is a proud member of the SHRM A-Team, and she is on the Board of her local SHRM Chapter, GCHRA. Nicole has a blog, HR Without Ego, where her faithful sidekick, Maximus the Minimus – her 10 lb Shih Tzu serves as mascot.


Keith Biggs, MBA, SHRM-SCP, SPHR

Senior HR Business Partner at Otak Inc.

I recently joined a firm that is implementing a formal performance review system. It’s given me a great chance to reflect on the best way to give feedback.

As large corporations like GE, Google, Microsoft, and Netflix have ditched their annual performance reviews for a more fluid system, many HR professionals have been wondering whether unstructured feedback systems will result in decreased performance. How do we decide annual pay increases without a stack and rank system?

I prefer a performance management program that is a little of both structured and unstructured feedback. I suggest that managers have a casual goal-setting discussion once a quarter, with biweekly or monthly casual conversations. Then once a year, they can evaluate the year and progress toward goals. I’ve found that most employees still want a structured review, just not all the time.

This structure gives employees an opportunity to manage their time and create their own goals. Knowing they have an annual structured review helps motivate them to meet their goals.

This system provides the right balance of unstructured and structured feedback and has allowed our firm to grow and become more consistent while preparing for the future.

Keith works at Otak Inc., an architecture and civil engineering design firm that is headquartered in Portland, OR where he is a senior HR business partner. Keith obtained his bachelor’s degree at Portland State University and his MBA from the University of Phoenix. Keith is recognized as a leader in the HR industry and participates in the Portland Human Resources Management Society and SHRM and has SHRM-SCP and SPHR certifications.


Craig H. Frazier

Vice President of Human Resources and Marketing for the Key Family of Companies

Having a structured program in place to cover all the bases doesn’t mean that you shouldn’t still engage in ongoing informal feedback. It is easy to fall into a trap of either setting up too many structured meetings that it becomes unrealistic or going the other way and making it so informal that nothing gets done. Having a baseline of structured meetings that incorporate ongoing informal feedback can be a good balance and creates a realistic expectation that both sides can manage.

Getting the managers on the same page early on and communicating the expectation for the performance review program and its delivery is key.

I would recommend just maintaining a good balance and defining the expectation for both managers and employees up front so that the process and delivery is consistent between departments and across the organization.

Craig Frazier is a lucky husband, proud dad, culture leader and small business advocate and works as the Vice President of Human Resources and Marketing for the Key Family of Companies. @craig_frazier


Ed Wood

VP of Human Resources for Berner Food & Beverage

It is important to understand that a formal system is used for a certain purposes and frequent coaching is useful for other purposes. Sure there is a link but when you consider the reasons for both you will see that we are talking apples and oranges. A formal process is usually used to document and justify annual merit increases, satisfy some arcane need rank everyone and/or to continue a process that the ownership feels is how things should be done “because we’ve always done it that way” (yeah….that last one is fun). Frequent coaching feedback sessions are for improving the employee’s performance, growth, goals and engagement. We easily see which of those things are more impactful to both the employee and the organization, but reality is that most of the companies in this country are stuck in doing some type of formalized review process.

One creative way to accomplish both is to design your formal system that summarizes the frequent coaching sessions. If you have quarterly coaching sessions, the “annual” review form could be used to just summarize those coaching sessions. So rather than ranking on the five or ten qualities that represent performance, you can grade employees on progress toward their goals or just categorize them into groupings as needed. Be creative. It may not look like the old standard review form, but it can satisfy the need for both performance management concepts.

Ed Wood has been active in Human Resources for over 30 years. After receiving his degree from the University of Wisconsin Ed began his career as an officer in the U.S. Army. Over the years, he has held several positions in Human Resources in a variety of industries including manufacturing, hospitality, and media. With over 30+ years of a wide variety of HR and operational experience in numerous industries, I have found that regardless of the company or industry, it still comes down to leadership and people.


Twitter: @cewood08


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How One Non Profit Runs Their Employee Check ins

The Colorado Health Foundation is bringing health within reach for all Coloradans by engaging closely with communities across the state through investing, policy advocacy, learning and capacity building. The Foundation’s mission is to improve the health of Coloradans and is grounded in the belief that health is a human right.

Today over 60 employees work together in the Uptown neighborhood of Denver, Colorado. Their roles vary from technology to communications and finance to philanthropy/grantmaking.

The Human Resources (HR) team has implemented a truly thoughtful performance management program they call Staff Excellence. The program provides the structure for regular conversations between employees and their managers while also giving every department, team and person the flexibility to make it work for them. Most importantly, it is a perfect fit for the Foundation.

We sat down with Alison Jeske, Human Resources Manager, to learn more about the program.

PerformYard: How did the team decide on the current performance management program?

Alison Jeske: When I started with the Foundation, the HR Director was leading the revamp of our performance management process. It started with a group of representatives from across departments, including employees and managers. We wanted to make sure we were hearing from voices across the organization.

Our goal wasn’t to create something from the top down; it was to create something that would be effective for our organization, which meant starting with input from our staff. The HR team said to employees, “This is your process; we are here to support and facilitate.” And we asked the Foundation’s managers, “what do you need to be able to evaluate the performance of your employees?” We asked employees, “what do you need from your managers and how can the process support your development?”

HR’s role was to educate, facilitate and balance everyone’s needs. For example, it was not clear what the right frequency would be. In the beginning the design team wanted monthly check-ins, and managers were saying, “Monthly seems like a lot, but I am willing to try it.” For the first year we operated with topic specific conversations every month, and now we do them quarterly.

[PY] So the program has continued to evolve?

[AJ] Exactly. Especially in the beginning we were asking ourselves, “What is this going to look like?” and we realized that it needed to evolve as the needs of the organization evolved. Everything was driven by our experience going through the process. So we would do the initial monthly conversations and get feedback from the Staff Excellence and Leadership team. That is what drove the edits and changes along the way.

I’m glad we started with monthly because after the first year staff felt heard, but everyone also agreed that we should try a more condensed version of the process. We continued much of what we did in the first year but we just did it in fewer conversations.

That’s one thing I think anyone about to go through this journey should expect. Year one, two and three may look very different, and that is okay.

What does your performance management process look like today?

We do four “conversations” a year between each employee and their manager. The first conversation sets goals for the year. Those goals flow naturally from the last conversation of the previous year. The middle two conversations focus on varying topics based on business needs, in addition to reviewing goal progress.

At the beginning of the year the HR Director will present the annual conversation topics to the leadership team and get feedback. For example, we’ve prompted employees to talk about any barriers they’re facing and discuss possible solutions, and we’re planning to dedicate a conversation this year to reviewing job descriptions.

The topics are planned in advance, but they’re also dynamic. A manager might say, “Actually this idea came up, can we add it to the next conversation?” – and we do that.

What happens in these conversations?

We created a form with a single long-answer box. Above the box we prompt a conversation by using a variety of guiding questions to encourage discussion around a specific topic. Some use the questions verbatim and others simply use them as a guide. Both are completely acceptable. The goal is to have a rich and productive conversation and the questions are just there to help, if needed. 

2018 Conversation One

It is really about stepping away from the computer. Rather than focusing on a large and complicated form, today we focus on a topic and have a dynamic face-to-face conversation between the employee and manager. We like that discussions can flow off-topic based on each individual’s performance needs. As long as the employee and managers are having a conversation and documenting it, that’s what’s important.

Then the next step is to put the notes from your conversation into PerformYard. We encourage folks to record what is important and relevant. They don’t need to write a novel or answer each question, just key takeaways. Each conversation form is initiated by the employee and they put their notes into the form. The manager reviews the notes, adds additional comments and signs off on the form.

Was the flexibility of your program an important part of the design?

Yes, we were previously using software that was driven by structured annual goal setting and it did not work for us. It was a product that drove a process. We needed to design a process that fit our organization and find a product to support that.

How do you use the data you collect from these conversations?

Employees are referring back to the signed-off conversations to carry over goals, questions or follow-ups to their next conversation. They also have the ability to easily access previous year’s notes and discussions.

Managers are using the conversations as supporting documentation and references for the year-end performance review and merit increases for their employees.

We see the program continuing to grow and evolve to include new measures.



A huge thank you to Alison Jeske for taking the time to share the Colorado Health Foundation’s performance management program with us. We are so impressed with how their team has iterated on a process, and arrived at something that is a perfect fit for their organization. 


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4 Crucial Times to NOT Give Feedback

We talk a lot about feedback here at PerformYard — how to use it, how to give it and how important it is to the success of your business.

But there's one question we haven’t tackled: When shouldn't we give feedback?

No matter how great your intentions are, too much feedback can be just as bad as none at all. And it's a fine line to walk. Here's when you're better off keeping your feedback to yourself.

#1 - When it's personal (not professional)

A clock can measure lateness and metrics can measure goals, but human qualities are MUCH harder to read.

Or, as employee engagement guru Marcus Buckingham puts it, “you can’t standardize human behavior.” Optimizing a person's individual style will alway be more effective than trying to standardize your own, but most managers expect their employees to behave exactly like them.

For example, if you’re a neat freak, a messy desk means even messier work. But is that true for all the people on your team? Maybe they don't clean the mess because it doesn’t even phase them, let alone hurt their performance. In this case, asking them to clean up would be personal, not professional. If they walk away feeling belittled, or confused about what outcomes matter most, you've done more to hurt their performance than help it.

Good feedback is introspective especially because it’s meant for someone else. In order to give truly helpful feedback, it’s up to us to take a step a back and ask whether we’re helping someone be their best, or our best.

#2 - When freedom matters most

Creativity is probably one of the most underrated business assets.

But business moguls like Mark Zuckerberg know innovation breeds profits. In a recent interview on the Freakonomics podcast, the social media giant explains why he regularly lets his employees do things he disagrees with.

"I think the most important thing is what decisions and what process, on a day to day basis, you choose to let people have the freedom to do, and just not get involved with. A huge part of how Facebook works is giving a large amount of freedom to our engineers, the company, and to people who use the product to make with it what they will, and trusting people to do that...I think having some restraint there ends up being very important."

Take it from Zuckerberg. Sometimes it pays to hold back. Make sure your employees know which tasks and outcomes are considered 'non-negotiable'. Then step back and let them figure out the rest for themselves.

#3 - When failure says it all

If you want to help your people be the best they can be, sometimes you have to let them do their worst. Because, let's face it. Failure is often the best feedback.

And that’s not just folk wisdom, it’s science. In fact, a recent study of the brain from the University of Texas found that although you could rack your brain learning a new skill area, and actually grow the size of the cortex that deals with that skill, that "big brain" advantage will gradually fade.

The benefits only stick around when you've practiced the skill enough that you’ve worked the cortex past being big, and into being lean — and that means failure.

Expect your employees to fail and don’t jump to give them feedback when they do. Here are some crucial moments when you should let your employees fail feedback-free:

  • The first time an employee makes a mistake
  • When the root of the problem is out of their control
  • When they know things didn't go well and need encouragement

Some leaders, including Deloitte CEO, Jim Moffatt, even encourage giving feedback for failure, not against it. Jim recommends sharing your own stories of failure, helping people fail fast and recover faster, and coaching employees to think of failure as a long-term investment.

#4 - When you just don't have the patience

According to a survey by TAO Connect, 85% of employees feel stressed and overwhelmed at work. And business leaders don't have it so easy, either.

Fact is, we're all trying to do more with less. But delivering feedback is a compound time activity.

Do it right, and it will pay you back tenfold. Before approaching an employee with feedback, check in with yourself first:

  • Are you too emotional to deliver the feedback calmly?
  • Are you missing any details that might make the feedback invalid?
  • Are you asking the employee to address a problem that is beyond their control?

If you’re overly-emotional, not fully clued-in, or asking for the impossible — your feedback will backfire.

Yes, we know. Good feedback is targeted, specific and timely. But if you have to choose between being quick or careful, it’s probably better to pick the latter.

Learn to let some things go

Believe it or not, some things are better left alone. We know letting go can be hard, especially if you were wired to be critical, but trying to catch everything all the time is the best way to wear everyone down, not least yourself.

A great performance management system puts the feedback frenzy on autopilot. You'll know exactly when to deliver feedback, and what issues need addressing, so you can relax knowing your employees will get all the help they need (and none of the "help" they don't).


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Establish Expectations, Not Just Goals

Is there a difference between goals and expectations?

Surely, there is, but it can be hard to articulate.

According to a 2015 survey from Gallup, roughly half of employees say they know what is expected of them at work. That can wreak havoc on employee productivity.

In fact, in another survey from ComPsych, 31% of respondents named “unclear expectations” as their biggest stressor at work. Clearly, it's time to recognize that expectations matter. Here's why.

What are goals and what are expectations?

Goals give us a challenge to help bring out our best.

Expectations give us simple habits and a professional code of conduct. Good expectations should also help us reach those goals — in the right way.

Think of a goal like the finish line. Expectations are the the daily actions, attitudes, practices that help you get there.

Maybe that's why companies like Netflix and Amazon have notoriously firm (and some might say harsh) expectations of their employees.

But how much do expectations (which can be anything from your tardiness policy to unspoken collective judgments on an employee's level of dedication) impact your team's ability to meet a goal? And how far are you willing to go to uphold your expectations?

Expectations are critical because they lay the groundwork for your company's culture. And what works for the Netflix, Amazon or even "lovey-doveys" like Zappos and Asana, may not work for you.

What do your expectations say about you?

Sometimes expectations are documented in black and white "rules" or "guidelines". Many times they're completely unspoken. Either way, they send a clear message about what's important to you as a company.

And while they may seem like simple things we can expect from any job, they’re actually much bigger than that.

They're the basic rules for the entire social system that keeps the office running.

In many cases, it's a system that works just fine. But what happens when your top performer violates the dress code? Do you let it slide or do you stick your values and address it?

Recently Wells Fargo has gotten in a lot of deserved hot water for the Fake Account Scandal. The rampant fraud that occurred across the organization shows what can go wrong when leadership sets very aggressive goals and then has very lax expectations of how employees reach those goals. Before long the implied expectations can become, meet your goals at all costs...even fraud.

Aggressive goals are important, but an organization also needs expectations if it is going to remain true to itself as it pushes to meet difficult targets.

Get clear on what really matters

CEO of education platform Varsity Tutors, Chuck Cohn suggests making your expectations crystal clear (and well-documented).

"Creating a cultural identity can seem like an amorphous task that is potentially boundless in scope. Step one to push through this challenge is creating a simple and easy-to-articulate vision for what you are trying to accomplish and what sorts of behaviors, attitudes, and approaches are (and are not) valued by your organization. Try to explicitly describe, both to yourself and your team members, the culture you wish to create. This should exist in written form so as to prevent the message from being distorted."

Many leaders’ identities are so intertwined with their business that they don’t see the need to articulate company values. But employees have a different live experience and won’t share a leader’s values perfectly. It's unfair to assume that they should just "get it".

Keep your expectations clear, simple and documented (or frequently communicated) so everyone knows what matters. Or at least, so they can see where you're coming from when you pull them aside for a one-to-one.

Bring your people in close

Finally, your expectations shouldn’t be yours alone.

Much like goals, expectations are a moving target. They need to be set and reset in tandem with your employees and managers. Regular check-ins and reviews can help you keep your finger on the pulse of the values and expectations that are effectively moving your teams toward their goals, and alert you to those that could use a little rethinking.

While expectations can definitely be personal and tricky, they cut to the core of what a business does and who its people are. The good news is, we can choose to be just as intentional about setting and resetting high-performance expectations as we are about setting goals.

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Should you test your performance management process?

When your top HR VP publicly speaks out against your current performance management process, you know it's time for a change.

In fact, that's exactly what happened with Adobe’s Donna Morris when, jet-lagged and pressured by a relentless interviewer, she accidentally told one of India’s biggest newspapers she wanted to scrap their performance management system. It was a major slip-up, but one that ended in Adobe’s epic performance management transformation.Truth is, most of us can "feel it" when our performance management system isn't up to snuff. But how to you turn a hunch into insights you can act on? One word: Testing.

Testing gives you the real-world data to back-up your performance management decisions and create a system everyone can be proud (and loud) about.

Why test?

To be fair, execs at Adobe knew a change was in order. After all, it was taking more than 80,000 hours to get annual reviews done. And on top of that, the tech giant saw an immediate increase in turnover after wrapping up the review process each year. (Yeah, it was BAD.)

But with so many new tools, philosophies and trends flooding HR, how do you know what really needs fixing? You don't want to overhaul your entire process only to find the real issue is one bad seed in the managerial team. Worse, what if you jump the gun and migrate to an entirely new system that everyone hates more than the last one?

Experimentation is awesome because it lets you look before you leap and know exactly where to tweak your process.

What to do before you start testing

If you're a regular here on the PerformYard blog, you know we love a good goal. (How else are you going to know when you've won?!)

First, take the temperature of your current performance management process to figure out exactly what it is that's not working and set a clear goal so that you'll know when it's fixed. Your metrics will vary depending on your business and industry but you might want to look at sales, employee turnover, customer satisfaction, etc. (For more on that, check out this post.) And remember, numbers are great, but don't forget your biggest assets are your people. Survey your employees to find out what they really think about the performance management process and what they want from it.

HR expert Ruth Mayhew recommends going a step further to review your exit interviews for complaints. Whether it’s a lack of coaching, meaningful rewards, or upward mobility, the exit interview is where you're most likely to find those juicy gems of truth.

The core principles of effective testing

Once your vision for change is crystallized, the real work begins. Testing and experimentation is a BIG area. There's a lot of different methods out there.

Whatever approach you choose, there are some solid fundamentals worth keeping in mind. We like HR consultant Arne Van Damme's three great tips for testing:

1. Hypothesize Well - Come into an experiment with an idea of what you’d like to prove and how you’d like to do it. Don't just throw the latest software at the wall to see what sticks.

2. Test Entire Groups - Take an entire team, say the whole finance team, at one branch and give ALL of them the new system. Testing a smattering of individuals makes for a much worse sample because you're not controlling for variables. The team culture in finance is NOT the same as in your marketing team. On the other hand, when you see a variable across an entire sample, you can better understand its effect on the system at large.

3. Experiment Deeply - For those in the experiment, fully bring on every aspect of the new process or system. Pretend like this is the big launch. Go for optimal buy in. Get them excited. Then, set a solid time period to run the change and let your teams adjust to it. Good experiments take time, honesty, and effort.

Testing a new performance management process can deliver insights to help you drive success throughout your company and make you a true HR hero. It can also turn up information that shows you crucial mistakes in your business. You need to be prepared for both.

Change is almost always hard, and almost always worth it.

If you'r ready to get started read our guide to designing modern performance management systems.


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Amazing Examples of Employee Recognition from HR Leaders

Employee rewards and recognition is a $45 billion dollar industry. And with companies like Google shelling out millions on employee awards and trips to Hawaii, even window shopping down recognition lane can be a stressful experience.

But great employee recognition doesn't have to include an expensive overhaul of your entire culture. And there's no need to wait until the "right time" to get started. These ten real-life stories and examples from actual managers, executives, and brilliant HR thinkers will show you just how simple and straightforward employee recognition can be.

#1 - Josh Bersin - Walking the walk

One of Deloitte’s premier HR minds and one of the industry's leading voices, Josh Bersin definitely talks the talk. Among many other gems of HR wisdom, Josh tells us that, “[w]hen you recognize the right things in the right way, people work harder.”

But he also walks the walk. In 2012, Deloitte launched their employee recognition program using gratitude as a simple yet powerful foundation. And even in his article announcing the program, Josh gives thanks.“PS, I would like to thank Stacia Garr, our Principal Analyst in talent management, for this amazing work and all the value it will provide to our clients. We have already implemented many of the practices in this research in our company and the results have been fantastic.”

This example shows how a simple two-sentence P.S. at the end of a blog post can bridge the gap between a company's leaders and their employees, while showing a little love for the people who make it all possible.

#2 - Lars Schmidt - Taking it to Twitter

Lars Schmidt is the founder of Amplify Talent and HR Open Source. Lars is all about transformative hiring and spreading next-level HR knowledge. One day in 2014, he found himself in a reflective mood. So he sat in front of his twitter for nearly 20 hours, tweeting out kind words to friends, coworkers, and even strangers.

His 'Random Tweets of Kindness' went viral and #RTOK was soon trending on Twitter with over 4,000 tweets from 35 countries expressing love and appreciation for their friends and teams.

And while you might not be able to spend twenty hours tweeting, the fundamentals of Lars’s Twitter recognition spree can apply to any kind of recognition program. His tweets were powerful because they were public, openly accessible declarations of genuine praise — almost like a tiny heartfelt recommendation letter.

#3 - Laszlo Bock - Making rewards personal

Laszlo Bock is a big name in the HR world because of all the awesome work he did at Google—work that has inspired even more amazing HR policies at Google, and pretty much everywhere else.

In an interview with SHRM, Laszlo tells us what he learned while working under another legendary businessman, Jack Welch. Among other things, Laszlo learned, “how important it is to know your people” explaining that Jack spent half his time getting to know his workforce.

Laszlo points to how much better and more relevant an award can be when you actually know the person and what it is that they like. Laszlo makes a practice of personalizing employee recognition rewards as a way of showing, not only that you recognize an employee's awesome work, but also that you respect and celebrate their personal interests—an undeniable part of who they are on the whole.

#4 - David Novak - Getting weirdly specific

Like Laszlo, business author and former CEO of Yum! Brands, David Novak believes awards must be specific to the individual you're recognizing. Even if that means getting a little weird with it sometimes.

During David's tenure at Yum!, employees were given some pretty strange gifts, such as rubber chickens, cheese heads, and those crazy wind-up walking teeth toys (to show that the person walked the talk, get it?).

David not only took out-of-the-box employee recognition to a whole new level, he also personalized his awards to recognize employees in a way that never felt shallow or routine. And come on, there’s no doubt a rubber chicken is a way more memorable than a gold plaque.

#5 - Ally Bunin - Keeping it human

Ally Bunin is as an HR expert and leader in the medical industry. Passionate about creating an awesome employee experience, one of the first things Ally did when she joined Brighton Health Plan Solutions was create an employee recognition program.

She used a points-based system with built-in peer-to-peer recognition where employees could redeem points for any reward of their choice. What's great about Ally's approach isn't just that it uses the same principles that make gamified perks and recognition a hit with employees, but that she kept the program human and authentic by giving a handwritten card along with each reward.

In these days of all tech all the time, Ally’s story rocks because it shows how to launch a recognition program that keeps those small touches that can make every award feel sincere, personal and undeniably human.

#6 - Marcus Buckingham - Accepting your people for who they are

Marcus Buckingham is a world-renowned work researcher for Gallup and a best-selling author on HR and leadership. He can tell you plenty of stories that make a clear case against a one-size-fits-all approach to employee recognition.

Marcus uses one of his own coworkers, Larry, as an example. Larry is a pretty unempathetic manager and can be a bit too direct. And while most HR managers would rush to get Larry enrolled in some kind of EQ training program, Marcus says stressing out about an employees perceived 'weakness' is a waste of time and money.

The way for Gallup to get the most out of Larry — and for Larry to get the most out of Gallup — is to focus on the strengths that set Larry apart, namely his strategic thinking and confidence. By Gallup letting Larry be Larry, they also let everyone else know they're free to be themselves at work without being "punished" for it. Accepting your people for who they are makes the entire workplace feel more natural, without ever having to force it.

#7 - Ben Eubanks - Letting everyone chime in

Ben Eubanks is the cofounder of HR Revolution, a regular writer on all topics HR, and a BIG believer in innovation. In fact, Ben believes innovation is the master key to business success and when you read what he has to say about it, it's hard to disagree. But Ben also believes that innovation and recognition can easily go hand-in-hand.

In other words, to really recognize your employees, start by recognizing their innovations.

Ben shares one story that gets at the simple power of the suggestion box. In one of the companies where Ben worked, the employer actively encouraged employees to submit ideas well outside of the confines of their job. So one employee took the initiative and suggested they make one of their products open to licensing. That little folded up piece of paper in the suggestion box ended up being a “million dollar product line for the business.”

A truly epic employee recognition program lets the employee feel a sense of pride and ownership, and gives the business awesome new sources of revenue in the process. Talk about a win-win!

#8 - Tammy Bjelland - Using your in-house experts

Tammy Bjelland is an education and talent development expert and the founder of Learning In Bloom. Tammy suggests bringing your employees into the training process by having a top salesperson write the sales script for new hire onboarding. “That practice,” she writes for FitSmallBusiness, “fulfills two functions: recognizing the employee for their strengths and developing valuable assets to compile in a company-wide training program.”

Tammy’s example shows how recognition done right can often kill two birds with one stone.

It also shows how recognition can be a growth opportunity, both for the individual employee and the organization as a whole. By giving the top salesperson a small, non-intrusive training task, you might just open them up to other opportunities in the company later, like leadership or management.

#9 - Tawni Cranz - Recognizing the struggles

If you’ve done your reading on company culture, you’ve heard all about the awesome perks and policies of working at Netflix. Tawni Cranz was the head of HR at Netflix from 2007 to 2017, where she helped come up with some of the companies best ideas, including the widely hailed unlimited parental leave.

Tawni recognized the difficulty new parents face and made sure work wouldn’t be one of them. Employees who have recently adopted or given birth can come back part-time, full-time work, and take time off as they need.

This policy is great because it recognizes an age-old struggle many employers still ignore, while extending an unparalleled level of trust and autonomy to Netflix's employees.

#10 - Lucy Adams - Respecting each other's humanity

Lucy Adams founded her own HR consultancy firm after slugging it out in the field and finding so much wrong with the way things were done. And one of Lucy’s biggest frustrations came from a blatant lack of humanity in the office.

Lucy shares two stories about humanity in the workplace, one good and one bad. In the good story, Adams witnessed a partner at a law firm spend his afternoon going desk to desk, after announcing their restructuring, to talk out frustrations directly with his people.

The bad one involved Lucy during her time working in HR at the BBC. Lucy received feedback that a company-wide email she sent out was “crap.” Rather than getting defensive, she tried to understand why she was getting this feedback. Lucy quickly realized that by the time her email had passed through all the different departments and compliance hurdles, any friendly, human language had been completely stripped out, leaving only stale corporate jargon. It was crap.

The workplace can sometimes leave little room for the basic humanity we should all be able to extend to each other. The stiff, overly formal nature of business can even commandeer the words we use to connect with each other. Whether it's binge-tweeting your love for your people, or simply saying "thank you" like you mean it, these stories are great because they show how simple employee recognition can be.

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How much is bad performance management costing you?

Are you managing your employees with the same level of care you afford your business balance sheet?

In Google's first letter to investors, the founding team explained that, “it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.”

But people are much trickier to manage than any number in a spreadsheet. If your performance management system is suffering from a lack of efficiency, you could be letting time, money and talent slip through the cracks.

What does a bad system look like?

Before looking at what a bad system can cost you, it's important to know what a bad system looks like. Here are some of the classic failings of a poorly run performance management system:

  • They're a time-consuming bottleneck for HR
  • Employees don’t get feedback often (see above)
  • The feedback they do get is vague, generic, or confusing
  • Feedback doesn’t stress the goal of their department or the mission of the business
  • The feedback doesn’t emphasize the positive, making employees feel undervalued

In an effort to bypass the HR bottleneck, many managers try to reinvent the wheel themselves.

But a fragmented and siloed approach only ends up making things less fair. Employees in the same job classification get reviews at different times, self-assessments get skipped and there's no guarantee that the review criteria are subjective. Now your employees are skeptical of their managers, not just HR.

The hard and soft costs of a bad system

The cost of employee turnover can range from between 6 months of the position's salary to 2 years for highly paid executive roles. And these are just some of the hard costs.

The fact is, the way your employees feel has a lot to do with the way your customers feel. And while the soft costs can be trickier to measure, they definitely have an impact on your bottom line.

In fact, according to Gallup, engaged employees are more likely to improve customer relationships, which results in a 20% increase in sales. Of course, the amount of energy and excitement your employees feel at work has everything to do with the approach of your managers.

But do they have the tools they need to lead effectively?

What does a good system look like?

Okay. We now know that a bad performance management system is pretty awful. But what does a good system look like?

A good system will make it easy to:

  • Get everyone in the company on board with the vision (even if it changes overnight)
  • Give regular and useful feedback to employees
  • Stay honest and hold people accountable while still focusing on strengths
  • Focus on the conversation, not the process
  • Make a clear connection between strategy, mission and performance

As you'd expect, a great performance management system is truly the opposite of a poorly run system. Instead of costing you money just to keep it running, it's actively driving value throughout your organization.

The value of a good performance management system

Research firm McKinsey found that organizations with good talent management outperformed their peers by 22%. And Watson Wyatt found that similar good practices could increase company value by 30%.

Whether you boil it down to lower turnover rates, better productivity or increased revenues, the one thing that ties it all together is a commitment to practical, real-world employee recognition. (After all, there's a reason Fortune’s '100 Best Companies to Work For' regularly outperform the S&P 500.)

A truly effective performance management system goes beyond the generic everyone-gets-an-above-average-rating review system to giving you a structured approach for connecting with your employees in a focused and practical way.

And while it's not necessary to hire chefs for in-office meals or fit the rec room with the latest high-tech meditation pods, it IS important to accept that your people are your biggest assets. And it's people (not investors, numbers or algorithms) who make sure that companies like GE, Google, and even your own organization, consistently outperform the competition.


Thinking about designing a modern performance management strategy for your organization? Start here: Getting Started with Modern Performance Management

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Why you should iterate on your existing performance management strategy

Amy is an HR manager at a firm that isn’t tanking but isn’t exactly succeeding with flying colors either.

The company’s performance management system was outdated when Amy became head of HR four years ago. Since then, Amy has updated the system twice and swapped it out entirely three times. And for the time, money and energy it takes to get a new system up and running, it hardly seems worth it.

Amy’s problem might not sound unfamiliar. In fact, a large survey of organizations from Deloitte found that 89% of respondents either recently changed their performance management system or planned to in 18 months. Only 10% of the firms surveyed thought that their performance management system was "excellent" and succeeded in driving employee engagement and high performance.

Clearly, a change is in order. But is testing yet another performance trend really the answer?

A lack of alignment is plaguing performance review systems

The problem that most execs and HR pros keep making is that they're too focused on finding an easy ticket to better performance management by way of the hottest new trend or tool in the market. But the real magic comes from the decidedly unsexy task of constantly aligning (and realigning!) your performance management strategy with your organizational strategy.

Shiny object syndrome is killing your performance strategy

It's not hard to see why people like Amy get stuck. There are so many ways to design a performance management system and so many different HR platforms to choose from. It can be tempting to grab up the latest game-changing idea from other best-in-class companies in the hope that almost overnight, THIS will become your awesome new MO.

Harvard Professor Michael Beer explains that this only deepens a company’s troubles. He argues that many companies don’t try to align strategy with change and so they “develop many disconnected initiatives to bring about change — initiatives that by their piecemeal nature are doomed to failure.”

Here's what usually happens

So let's say Amy sees that Netflix focuses mostly on regular 360 reviews, so she tries that for one year. The problem is, she’s doing it through two new HR platforms while also adopting Google’s upward feedback model to try and improve managerial performance.

It's a lot. Her HR department and managers feel overworked by the extra load of learning new review processes and platforms. Her execs aren't used to a bottom-up review structure and have become so accustomed to a revolving door of HR experiments, they don’t put their full weight behind it. In the meantime, her employees are totally confused about what performance metrics matter most and are quickly becoming disillusioned with the entire process.

Amy and her teams haven’t taken the time to align their performance management strategy with their business strategy. The result is a Frankenstein’s monster of mismatched HR policy pieces and platforms.

How to straighten out your performance strategy

It’s easy to talk about strategic alignment but actually fixing a misaligned performance management system takes some serious elbow grease. Luckily, plenty a business leader has been there. Here are some solid experts and examples that can help.

Measure and realign

Over at investment firm Betterment, CEO Jon Stein aligned his performance management system and business strategy through a series of measured adjustments (and continuous calm).

At first, he started with an OKR-based approach like what he saw Google do. When that put his teams on objectives they didn’t agree with, he refocused to a system that gave his teams more agency to make narrower goals. When that system made his teams too inwardly focused and myopic, he adjusted again and made flexibility a goal.

Rather than throwing out an entire system, he tweaked each strategy and approach within his current system, letting his strategy (and people!) adapt to changes in the business over time. He followed up with his teams after giving each new strategy a little time to sink in to see what went wrong, what went right, and what could be done to make their performance management system even better.

Keep what works, remove what doesn't

At Deloitte, research is a big part of the business, so naturally it factors into their performance management system. The top-four firm rebuilt their performance management strategy using the smart data crunching they're famous for and redesigned their employee review process to be faster, more open-ended and less prone to bias by removing many of the major bottlenecks (and ahem, paperwork) in the system.

Putting in the work

For businesses like Betterment and Deloitte who have succeeded in removing the headaches from their performance review systems, keeping everyone abreast of the changes and the vision behind those changes was important.

An ability to stay steady, resist shiny object syndrome and focus on doing more of what works and less of what doesn't was crucial to developing and maintaining a winning performance strategy.

There is no shortcut to great employee performance. But what if, instead of immediately jumping from one performance trend to the next, we take a little extra time to think about what is right for our business and our people?

You might find that your days of constantly revamping your systems are finally over.


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How can performance reviews support diversity and inclusion?

Ask any HR expert and they'll tell you the performance review process has two main goals — employee accountability and employee development. But that's not the whole story. A truly great performance review strategy will also drive inclusion.

Inclusion and performance go hand in hand. In fact, experts like Bernadette Dillon, Inclusion Specialist and Director at Deloitte, report that companies with an inclusive culture are “twice as likely to meet or exceed financial targets” and eight times more likely “to achieve better business outcomes.”

Performance reviews have a fairness problem

Fairness is fundamental to a diverse and inclusive company culture, yet according to Gallup, only 29% of employees strongly agree that their performance reviews were fair.

And it only gets worse once you start digging deeper into the data. For example, one study found that African Americans and women were less likely to get good ratings, and that ratings were more favorable for people that shared the same race as the rater.

Another survey found that 41% of African American women managers felt they needed to outperform their male counterparts in order to help offset bias in the review process. Unfortunately, that’s just the tip of the iceberg on the well-documented problem with performance reviews and diversity.

How can a fair performance review process help rewire your company culture

Despite their unfortunate track record, performance reviews don't have to be a barrier to diversity and inclusion. In fact, they can be an essential tool to help you create the kind of company culture that embraces diversity in a real, practical and performance-driven way.

When launching into a new diversity and inclusion initiative, experts often talk about the need to "rewire" your systems, so that you can rewire your behaviors. Well-designed performance reviews help you do just that.

With the right tools and questions, your performance review system can help you discover and eliminate bias in managers, workflows and talent management processes, and even help you collect data on diversity and inclusion measures that you may not have otherwise known where to find or how to track.

And of course, by focusing on clear and tangible goals, performance reviews can be a great way to get an objective view of each individual contributor on your team, while naturally creating a regular time and place to acknowledge the unique skills they bring to the table.

Performance reviews can improve diversity and inclusion, IF they’re done right

Handling biases is tricky business and you'll need to be very intentional about how you design your performance review system to help weed bias out of your organization. Whether based on race, gender, or other unconscious prejudices, our biases don’t always sit on the surface. According to bias-reduction trainer Sondra Thiederman, “bias is an attitude” — it can be tough to spot from the outside.

A great way to start checking for biases on a deeper level is to simply be aware of what they are and how they can manifest in the workplace. Here's a list of some of the most common performance management biases from the experts at Diversity Best Practices.

  • Availability/Recency Bias: The most recent, or most memorable moment crowds out the rest. This bias slants a review to one or two big moments and makes it much less holistic.
  • Halo and Horn Bias: Like an availability bias, this bias comes from a good or bad first impression we let come before the whole picture of a person’s performance.
  • Confirmation Bias: When we unknowingly focus on the evidence that supports our worldview and ignore evidence that counters it. Sweeping generalizations like “bad employees have disorganized desks” can come from confirmation bias.
  • Affinity Bias: We see people like us in a more positive light and it seeps into how we judge their performance.
  • Implicit Stereotyping: Our preconceived notions change how we see someone’s performance. Racism, sexism, ableism, and other 'isms' all come into play here.

Set up your performance review system with the goal of rooting out these biases as much as possible. Make it known to your teams that the system was designed (or revamped) with the goal of supporting the company's vision for diversity and inclusion and help them understand why it's important to the bigger picture.

You can also help your managers learn to spot their own biases by hiring a professional to come in and workshop with your teams. Tests like Harvard University’s Implicit Association Test (IAT) can also help you and your team leaders identify your own biases in a way that's more private and personalized. Remember, this is a challenging subject for almost everyone. If you're using tests like the IAT, make sure you allow each member of the team to keep their results confidential so that no one feels shamed, blamed or singled out.

Your performance management system can be a catalyst in creating a more diverse and inclusive culture, but it isn’t the end point. A winning diversity and inclusion strategy is one that never reaches a finish line. It's a continual process of evaluating and handling our own biases and it requires a constant re-commitment to stepping up and doing what's right for our people and our business.


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The Pros and Cons of 360 reviews


360 feedback (or multi-rater feedback) is one of the fastest-growing and most controversial performance management instruments used today.

When done right, 360s can promote increased self-awareness for individual employees, transparency in team communication, and increased performance within a company.

However, there also exists a host of variables and questionable components to the 360-degree feedback process that have made many organizations question the validity and reliability of the performance tool.

We’ve compiled some opinions that should help to inform your decision if you're considering the addition of 360 feedback to your process.


PerformYard simplifies the feedback process so you can spend more time with your employees.


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Arguments against 360 reviews

Inexperienced raters

Many businesses have found that one of the greatest variables and risks to using 360-feedback in performance review systems is the reoccurring issue of inexperienced or subjective raters.

In 2015, Major Gregory G. Lee of the U.S. Army published an article criticizing the reliability and validity of 360-degree feedback programs within the Army due to the blatant subjectivity and unchecked toxic leadership within the multi-rater feedback system. When the leaders, managers, executives, and employees involved in a 360 review are untrained or inexperienced in the practice of giving constructive feedback, not only does the purpose of the system becomes lost, but the feedback itself can cause damage to the organization.

Unreliable data

Often, especially in large companies, 360 survey participants that are responsible for providing feedback can be on completely different pages when it comes to evaluating the performance, behavior, and competency of the individual being reviewed. 360 surveys were denounced in a 2011 issue of Harvard Business Review for having universally bad data, mostly due to the drastically different standards and expectations of those involved.

In a 360 review system that involves manager, coworker, customer, and even self-assessment feedback, it’s easy to see how data can potentially become skewed. Even well-intended coaching and insightful feedback still comes from individual sets of competency standards, questions, and performance criteria that often differs from evaluator to evaluator. Because complete objectivity in reviews is nearly impossible to achieve, the data gathered in a multirater review is often made unreliable as a result.

Vague questions

Not only is unreliable data a potential mishap in performance reviews, but many companies often set themselves up for weak feedback systems by creating vague, non-specific questionnaires that make it hard to assess an employee’s actual behavior and performance.

Questionnaires that consist of nothing more than personality profiles make it nearly impossible to translate a review into specific and measurable actions, while overly complex questions can fail to connect the ratee’s performance with the overall values, goals, and strategic aims of the organization.

Focusing on weaknesses instead of strengths

Due to the nature of 360 evaluations, managers and executives are often forced to examine an employee’s weaknesses more closely than their strengths. Many participants in 360 feedback systems have found the process to be more negative and punishing than rewarding due to management’s tendency to seek out and pinpoint an employee’s skill gaps.

Not only that, but many of these questionnaires involve written feedback that is sent out to participants after the review takes place. Written comments can serve to reinforce the emphasis on weaknesses in 360 feedback survey results -- participants are left to briefly skim the list of strengths, and potentially hyper-fixate on their shortcomings and improvement suggestions.

Even with these issues, however, multi-rater assessments are still used by over 90% of Fortune 500 companies. So, what is it about 360 reviews that works?

Arguments for 360 reviews

Increased communication and transparency

Many Fortune 500 companies have discovered, often by a trial-and-error basis, that 360 reviews are the most effective performance review tool for a large organization. Writer and Northwestern University student Nicole Thompson conducted research and found that 360-feedback systems were responsible for increased communication, and as a result, increased productivity and efficiency among teams.

As feedback results are delivered and discussed among team members, communication channels remain open and honest, leading to relationships of trust and transparency. This open communication in a 360 system encourages coworkers and team members to actively seek out constructive feedback from peers, management, and executives, resulting in performance increase and goal achievement.

Increased self-awareness

Not only are there benefits to utilizing 360 reviews within a team environment, but the assessment tool can also promote increased self-awareness and a clearer understanding of goals and expectations for individual employees.

With the more open and communicative environment that 360 feedback brings, employees feel as though their opinions are actively sought and heard, and their performances are being directly observed, recognized, and rewarded. Individual employees are able to get a clearer understanding of how their actions and opinions directly affect the company.

Similarly, the ability for an employee to offer constructive feedback to those in management can encourage morale among lower-level employees, allowing them to believe that their words matter and giving them a sense of empowerment.

Progression of organizational goals

360 feedback processes that involve the customer are known to be especially valuable in improving the quality, reliability, and promptness of a business’s overall products and services.

In a 2012 issue of the Harvard Business Review, Jack Zenger and Joseph Folkman explain that organizations that do 360 reviews well -- in other words, relying on empirical research to determine leadership competencies, properly and constructively explaining the results of feedback, and tailoring the process to each individual’s job type and position -- see an increase in employee engagement, customer satisfaction, and higher sales.

High-quality 360 feedback ultimately correlates with an organization’s success, revealing and eliminating blind spots while driving accelerated growth for both teams and the overall company.

The question is: are 360 reviews beneficial to every organization? Here are some things to consider before taking steps toward implementing 360 feedback at your company.

Things to consider before adding 360s

Not all leadership development and 360 solutions are created equal. It’s fairly obvious that there are certain conditions that must be met in order to ensure an effective and functioning multi-rater performance assessment system. As you make your decision, it is important to keep in mind that the use of 360-degree feedback tools is not always effective for certain organizations and specific job types.

The companies that make use of 360 reviews have discovered that the multi-rater system enables more accurate, fairer, and less biased feedback, in contrast with traditional or top-down assessments. However, it’s worth noting that many of these companies combine 360 feedback with traditional performance appraisals in order to ensure that all review participants receive the clear direction and developmental feedback that they need to flourish.

No matter what, your biggest concern should be to ensure that 360 reviews are going to work for your company. Customize your 360-degree feedback system according to the needs of your organization, and it just might be the successful tool you need to bolster performance in your business.

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Are you asking the right performance review questions?

At least half the pain of the performance review are all the questions that come with it. Most performance appraisals look like a dull, thick stack of paper reminiscent of a standardized test. There are so many questions packed in that any good ones get lost in an avalanche of bad or pointless ones.

Why do so many performance review questions miss the mark? In short, because the mark is hard to hit. Asking a question might seem simple but when you’re searching for a deeply insightful answer you need to use an even more insightful question.

There is both an art and science to nailing your perfect set of performance review questions, and while a quick Google search will yield tons of generic sample questions, it’s unlikely any of them will truly fit your unique business or team. But asking the right questions in your performance review means a lot to your employees and your bottom line. Good questions can improve work relationships and spur your people into actively solving problem for your customers.

To start learning about how to ask the right performance review questions, let’s break things down bit by bit. First, we’ll look at how to ask good questions in general. Then we’ll look at how to craft great performance review questions.

A simple process for asking the right performance review questions

We don’t always think of how to ask questions simply because asking a question feels like such a normal thing to do.

But when it comes to work situations (especially stressful work situations) questions can feel like they're carrying a lot of hidden meaning. For example, a question like, “Why didn’t you meet your department goals this quarter?” could be read as more of an accusation than a question.

The Global Digital Citizen Foundation is an educational nonprofit that works with educators all around the globe to help develop critical and creative thinking skills in learning environments (and yes, your office should be a learning environment). As such, the GDCF has a very intentional way of looking at a question.

They basically turn it into a five-step process built to find information. Here's how they break it down.

Start with your focus and purpose

How do you know what to ask if you don’t know what you’re looking for?

Start with the focus of your question, or what you want to know. You're also going to think about the purpose of the question — why you want to know it or ask about it. "This is what we've always asked" or "These questions were on the free template I downloaded" are not good a good place to start from.

Check your intent and frame your question

Intent is a great checkpoint to ask yourself where your question really comes from (and if it’s really a question at all).

There are times we ask questions more to express our opinions, like saying, “Did you really think that would work?” What's the intent behind the question? Genuine curiosity or something else? The intent of each question should align with the intent of your performance management strategy.

Once you're clear on your intent, you have to frame the question and take a careful look to make sure it’s clear and does not bias the responder. If you really want to know if something’s working or not, you must be both direct and objective.

Don't forget to ask follow-up questions

Last but not least, you must use follow-up questions to figure out if you need new or different questions.

Often businesses neglect the follow up even though this can actually be the most valuable stage of the performance review process. The follow up is where you are at your most informed and your employees are already focused on the topic. There will never be a better time to dig deep and discover the smarter questions that lead to better answers.

And of course, sharing feedback should be a regular event and following up is a great way to regularize performance feedback.

Why open-ended questions are an important part of performance appraisals

Open-ended questions can be tricky for HR departments.

These questions take time and if they’re not done right they could lead to a long conversation on a less than useful topic. Not to mention, they don’t produce the same, easy-to-examine flow of quantitative data like the tidy multiple choice or yes/no questions do. Still, open-ended questions bring out big insights that other questions just can't reach.

Using open-ended questions can help employees develop a greater sense of self-reflection and encourage them to find their own ways to improve their work performance. Many employees want to improve and helping them do that will win their loyalty. In fact, research indicates that a lack of personal development opportunities may be a key reason why millennials switch jobs so often.

One way to show interest in your employee's future development is to focus on questions that can help the employee grow. Open-ended questions like, “What is an area you’re looking to improve?” can demonstrate an interest in an employee's future career path, open up growth opportunities, and even improve performance all at once.

If it takes an extra 10 minutes for your employee to answer an insightful forward-looking open question rather than a simple yes or no, consider it time well-spent.

What are "the don'ts" of employee review questions?

Just as there are great guidelines for how to ask better questions, there some very helpful rules to help you avoid asking bad questions.

First, avoid asking questions about why someone failed to perform at a specific project or task. Even though you might not have a negative intention when putting this question together, integrity is a core survival function and when it's called into question, it can trigger a person's limbic system. Instead of listening objectively, the employee's natural reaction is to fight, flight, freeze, or in the most likely scenario for your performance review, defend.

If you know a particular employee isn’t performing as well as they could, address it but don't belabor it. Rather than put them on the defensive, a better approach would be to look to the future with open-ended questions like, “What can we take from this quarter that will help us in the next one?”

Of course, you should also avoid any leading questions as these can also indicate bias and prejudgment, even if you don't mean them that way.

If you're ever in any doubt about the role or validity of a certain question, go back to your process. Look at its focus, purpose, intent, and framing. Can you follow this up to see how helpful it was? Is there a way to make this more specific without blaming? Would this work better as an open-ended question? Are your own personal values baked into the question?

Be real and relentless about the role of each question on your appraisal form. If it doesn't fit the goal or culture you're striving for, remove or replace it.

How to build the right employee survey or review

One thing that will always apply to every aspect of the employee performance review or survey is what you want to get out of it.

Obviously, no one wants it to be a morale-killer but you may want your review to target specific things such as, mid-term goals, long-term goals, manager issues, employee development and so on. It's better to determine the focus and the purpose first then build out from there rather than try to adapt a 24-page review form to address a specific area.

Ask more often

Regular feedback and reviews can have an advantage over annual surveys because they allow you to narrow your focus and give everyone — employees, managers, and HR — a smaller number of questions to contend with. Generally speaking, good types of questions to ask would be upward review questions (that ask for an assessment of management), peer review, and self-review. This can make the review process seem more fair and inclusive to more opinions than just management's.

Avoid bias

Remember, avoiding bias can be hard because biased wording usually happens on an unconscious level. For instance, the question “Would you say your manager is communicative?” has a positive bias in its wording because it uses “communicative” instead of “unresponsive” or something similar. Try mixing in other versions of the question with different wording.

Keep it simple

Be careful not to overload questions with multiple points or needless complexity. Use plain English and avoid jargon or confusing wording in general. Go ahead and explain things if you need to. For example, don’t ask if an employee's coworkers are efficient and hard-working in one question, ask it as separate points in two questions. (And if you need help, check out our post on How To: Create a Radically Simple Review Form.)

Be transparent

Try grouping your questions according to context, going from general to gradually more specific. Once you have your questions down, there’s no need to stow them away until review day. Giving your employees the question well beforehand could help everyone out. Author of How to Be Good at Performance Appraisals, Dick Grote says that sharing your questions helps to “set expectations early” and “make it clear how you’ll evaluate your employees.” Giving everyone a chance to get on the same page can help make it a win for everyone.

Final takeaways

A review is NOT a standardized test and you definitely don’t want it to feel like the SAT. When an employee sees what they’re being reviewed on, they also see what matters to the business.

It becomes easier to align their focus to yours and it’s easier for everyone to hold each other to that alignment. Prepare and adapt your questions regularly to help the whole office stay aligned to the big picture goal of the business.


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From KPIs to OKRs: Your Quickstart Guide to Performance Acronyms

When it comes to performance metrics, the business world loves a good acronym. KPI, KRI, KRA, OGSM, OKR and so many more swirl in and out of the business zeitgeist — it can easily become more confusing than helpful.

No one wants to be surprised by a new acronym during an important performance meeting, so we’ve compiled handy list of the most popular ones and added a quick, plain-english explanation of how to use them.

Key Performance Indicator (KPI) and Key Success Indicator (KSI)

Let's start with one of the most (if not THE most) popular terms in business, the KPI (a.k.a. KSI). This handy little metric will show you whether your business, department or team is on track. Basically it's just a shorthand number that shows how well you're organization is doing

KPIs will vary based on industry, organization, or even department. For example, your sales department might use Average Profit Margin, while HR could look at Employee Churn Rate.

KPIs include many other terms you’ve probably heard of, including but not limited to:

  • Net Profit
  • Revenue Growth Rate
  • Return on Investment (ROI)
  • Earned Revenue Share (ERS)
  • Employee Satisfaction
  • Customer Retention Rate

And many more. The important thing is to choose a set of KPIs that will give the clearest picture of whether your team (or business) is on track.

Key Risk Indicator (KRI)

If KPIs are the performance metric you use to show you how well things are going, your Key Risk Indicator (KRI) is there to make sure things keep going well. In a nutshell, a KRI is any indicator for trouble, failure, and risk — whether that's within your team, department or business at large.

KRIs can be a bit broader than KPIs and can include things like disruptors and wider industry risks, rare and black swans events, and common issues that need tracking, such as logistical and supply chain risks. Of course, KRIs will vary greatly depending on your unique line of business but you can look at them as the inverse of KPIs. For example, employee turnover for HR, server lag/network volume for IT, and number of deals lost for sales.

Key Process or Key Process Area (KPA)

Simply put, a Key Process or Key Process Area is one of the most critical functions of the business.

This is the section, or handful of sections, that must keep running like a well-oiled machine in order for everything else to be smooth sailing. Remember when Facebook’s servers used to crash regularly and the site would go down all the time? No? That’s because the teams at Facebook have identified IT stability as a KPA.

Key Results Area (KRA) and Critical Success Factor (CSF)

The Key Results Area (KRA) and Critical Success Factor (CSF) metrics are a bit like the KPA, but wider.

A KRA goes beyond processes and looks at general areas where results are necessary in order for the business to succeed. Use a KRA to set down some broad areas necessary for long-term success, then define your Critical Success Factors (CSFs) within those areas in order to stay on track to hitting your KPIs.

For example, KRAs can usually be summed up in one or two words such as: Productivity or Cost Management. The CSF is the specific action you and your team members must take in order to drive progress in that area. For example, 'focus on developing product for 2 months without distraction', or 'reduce waste from our distribution process'.

Objective and Key Results (OKR):

Ah, the OKR. This goal-setting framework was popular even before the likes of Twitter and Google started using it.

This performance metric aims to strike a balance between the qualitative and quantitative. OKRs first articulate a goal without worrying about measurability. Something like "Aggressively increase revenue." That's the objective. The second step is to decide on several metrics that will track progress towards the goal. For the revenue goal above we might want to 1) Increase revenue 50%, 2) Keep our profit margin above 5%, and 3) maintain the R&D budget. These are the key results.

OKRs are great for setting big gnarly hard-to-measure goals, and then placing concrete guideposts that define success more quantitatively. For example is we weren't using OKRs in the example above we might try to increase revenue by investing the R&D budget in not-so-successful advertising campaign. That would increase our revenue, but it's probably not "success" the way we originally imagined it.

Objective, Goals, Strategies and Measures (OGSM)

The Objective, Goals, Strategies and Measures (OGSM) model basically takes the KRA and builds a more structured outline out of it. With this performance metric, you take on an objective as the largest frame. So for example, the mission statement of your company or your biggest long-term business goal.

Then you set goals that are steps leading up to that objective. Strategies are the ways to reach goals, and ultimately, your main objective. Last but not least, you need to measure whether everything falls in line — if the strategies satisfy the goals, which then help reach the objective.

And for that, you need good measures. Your measures, bringing us full circle, are likely to be your KPIs.

As you can see, there's plenty of overlap in these performance acronyms. The acronyms themselves are mostly only good sounding smart, but the underlying ideas can be a great way to bring structure to your discussions of performance.

Finally, don't be afraid to stand up to jargon. When you don't understand something, just politely ask what it means. The other person is either being intentionally confusing in a self-obsessed attempt to appear important or they're using a useful shorthand that you should know. Either way, asking is better for everyone.

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5 Personalities in Every Team (and How to Coach Them)

If you’ve ever received career counseling, you’re no stranger to the many personality tests out there. At this point, it feels harder to avoid the Myers-Briggs than to take it.

And actually, that makes sense. Humans naturally want to build patterns out of the information we take in, in order to make faster, easier decisions about how to adapt and thrive in our environments.

If you're looking for ways to help your people adapt and thrive in your shared work environment, it can definitely help to know a few things about who they are and how they tick.

What are The Big Five personality traits and why should you know them?

From eagles to owls to INFPs to ENTJs, you can find tons of personality assessment tools to fit your team. But if you’re looking for a simple system that’s easy to learn, teach to others, and has a plenty of studies to back it up, look no further than the Big Five (a.k.a. the Five Factor Model).

The Big Five groups personality types using 5 core metrics:

  1. Openness to new ideas
  2. Conscientiousness
  3. Extraversion
  4. Agreeableness
  5. Neuroticism

And of course, it's all wrapped up for you in one tidy acronym: OCEAN.

The Big Five was created in the 1970’s by two independent groups of researchers and it’s still heavily studied today. According to research from executive coaches and psychologists Iain McCormick and Giles Burch there is personality-focused coaching using this model, can help managers and leaders get better performance from their employees, even if they didn't start with this approach from day one.

How to use the Big Five to coach and manage your employees

Before we dive into what "type" of people are on your team, it's worth pointing out that none of the Big Five traits are necessarily good or bad. They're simply an indication of how a person will behave.

The magic lies in understanding where your employees stand with these personality types so you can hire and coach for balance. (Believe it or not, neuroticism is useful sometimes!)

Here are the Big Five personality traits you're likely to see on your team.

Learn how to be a coach rather than a critic.

Extroverted Employees

Employees with high extraversion tend to be very relationship-focused. Extroverts make great glue for holding office relationships together. But beware, an office with too many extroverts could result in tons of talking, and not enough walking. Give your extroverts a chance to share their knowledge with other team members, and they'll LOVE your for it. Just make sure to always check in and keeping them accountable for the daily deliverables, too.

Agreeable Employees

Employees with high agreeableness are similar, often serving as office diplomats. According to the coaches at Crowe Associates, agreeable employees are good at managing conflicts in a constructive way. Yet McCormick and Giles note that some studies show that people who are more agreeable don’t always make the best leaders. It can be hard for them to make the unpopular decisions leaders are often forced to make.

If you've got a highly agreeable team member in a senior or manager position, teach them how to deliver negative feedback in a constructive way, and remind them how important it is to both the organization and the team to make those harder calls.

Conscientious Employees

High conscientiousness is the bigger social feature of good leaders. According to Live Science, these workers have a keen sense of duty and organization. Though conscientiousness often links to better job performance, it might hurt with less organized work environments where the natural rhythm and culture is to jump in and keep moving.

Ask your conscientious employees what tasks give them energy and be transparent about the aspects of your office that might be frustrating for them.

Open Employees

The trait for adaptability and creativity is openness. Researcher Courtney Ackerman writes that research links openness to “broad intellectual skills” such as creativity and knowledge, which can also lead workers high in openness to find their place in key leadership positions.

Yet, McCormick and Giles remind us that the flip-side of the open employee is that they sometimes come with an overly strong creative drive that often needs checking. Make sure you always take time to listen to your open employees and provide clear path for them to visualize their future within the company and be clear yet supportive when they have an idea that just won't work.

Neurotic Employees

Neuroticism gets a bad rap. In fact, Ackerman links it to worse job performance and “added life difficulties.” Yikes. But all neuroticism really means is a propensity to feel and react to the negative things around you — letting things get to you.

And that's not always a bad thing. In a paper from Center for Applied Cognitive Studies in North Carolina, Pierce and Jane Howard explain that, “susceptibility to negative emotions” can make for strong social scientists, customer service professionals, and scholars. McCormick and Giles stress that neurotic workers need help to be resilient, manage their stress, and handle their negative emotions in constructive ways.

A varied team can be a blessing and a curse depending on how agreeable and open the disagreeing parties are. While personality tools like the Big Five can be a great guide, what matters most is that you stay open to getting the best out of everyone.

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A Real-World Guide to Employee Recognition


No matter where you look, you'll find a conversation about employee recognition.

Pepsico CEO, Indra Nooyi made headlines when she revealed that she writes 400 letters per year to the parents of her senior execs. And in his trending LinkedIn article, Global CTO at DailyMail Online and Metro.Co.Uk, Oleg Vishnepolsky makes a strong but surprisingly simple case for employee recognition.

His story is barely 300 words in length, yet it illustrates with perfect clarity just how easy it is to get employee recognition right.

So why do so many of us still miss the boat?

Employee Recognition: Here's how some of our favorite HR experts define it

Don't get us wrong, we love tech, but HR is overflowing with it.

With tools for everything from sending automated birthday GIFs to doling out points on a Slack scoreboard every time someone restocks the toilet paper—let's just say, it's easy to lose sight of why these tools exist in the first place.

So what is employee recognition, really? Here's how some of our favorite HR thought leaders define it.

Employee recognition is a spark for organizational innovation

To Ben Eubanks, employee recognition is an essential driver of innovation.

The expert HR analyst and founder of upstartHR, explains that with the right approach to employee recognition, you can drive innovation across every department within the organization (not just the flashy R&D teams).

"It might not be your job as an HR leader to recognize employees, but it is your job to design/build the system that your employees and managers use. We know that recognition improves employee engagement, and innovation provides an opportunity to target those employees that are dreaming up new ideas and methods to improve the business."

By showing all your people that you value their input and ideas, you're opening up every system, process and product to new efficiencies that can take your organization to a whole other level. Here's Ben again:

"The outcomes for submitting ideas can be as simple as peer/social recognition or it could include financial incentives and rewards. Whatever the case, be sure to create a system and culture of recognition that makes employees want to find smarter ways to work. Don’t just attempt to motivate your people—inspire them."

An important piece of this is making sure you recognize employees by acting on their suggestions and ideas. Even if it's just on an experimental basis, showing your commitment to smart innovation will always take you farther than simply talking about it.

Employee recognition will look a little different for everyone

We love most things Kris Dunn has to say. The Kinetix CHRO and author of the HR Capitalist blog gave an epic shoutout to low-key recognition, using awesome examples of low-key ways to communicate your appreciation to employees who might not be comfortable with public recognition.

Kris points out that while we're used passing out awards and making big announcements in the white-collar world, this may not be the best approach for introverts or blue-collar workers.

"The broader point for any of us thinking about recognition is simple. To maximize your approach and the subsequent results, you’ll have to customize your recognition programs for different employee segments.Failure to consider when and how to recognize individual segments can and will be held against you in the court of employee sentiment. If you’re wondering why your managers don’t use the recognition tools you provide, it’s likely because you haven’t provided them with choices that work for the employee types they manage."

Employee recognition is an inherently personal thing. Set your managers up to win by taking the time to figure out what works best for each individual on the team.

Employee recognition happens in the moment

One of our favorite stories of employee recognition in action, involves a manager and a millennial (obvious, right?).

Fistful of Talent author and former HR Manager Tim Sackett explains how, after conducting a performance review for a high-performing millennial, his executive sent a handwritten letter to the employee's parents thanking them for raising a rockstar.

Here's what happened next according to Tim:

"About a week later, I got a call from the front desk. It was the employee’s father, asking the front desk to talk to the executive and telling them they were the father of this employee. The front desk person called me, believing something bad must have happened, so I took the call.
I spoke with a man in his 50’s who had a hard time holding back tears of pride, thanking me (and our executive) for sharing such a wonderful story and how proud they were. The employee also came in to my office to thank me for doing this – believing I must have put the executive up to it (it’s an HR touchy-feely thing).
The employee said that they could never imagine a better place to work. A 3-minute hand written letter = powerful recognition and engagement."

How's that for appreciation?

At first glance, it's tempting to see this as just another story about performance strategies for millennials, but one of the most beautiful things about employee recognition is that a little truly goes a long way. Or as Tim says, "Employee recognition doesn’t have to be hard, or take a long time, or be a part of a process. It has to be genuine, in the moment and meaningful. Too many times we forget this on the organizational front."

Do you need an employee recognition program?

By now, we know there's a reason Oleg's post has 31,454 likes (at the time of writing this article). And we know it has nothing to do with star-studded perks and rewards programs.

But surely we can't just throw employee recognition to the wind and hope that it magically happens, right? Right.

Or at least, mostly right.

The problem is work gets in the way. We get caught up in the day-to-day and forget all about the people who make work happen.

According to research from management consulting firm Cicero Group, employees found that a simple "well done" was more effective for engagement than a 5% increase in salary.

Do you need really need an employee recognition program to make sure these simple words are being exchanged?

Yes, you probably do. But it's important to note that, at the end of the day, you can have the trendiest employee recognition program this side of Silicon valley, but it will mean zilch to your employees if you don't lead with integrity.

But if the research on employee recognition is to be believed, any effort you put into making your people feel appreciated will definitely come back to you in the form of hard returns for the business. If you're ready to do it right, there is a very solid business case to be made for employee recognition.

The hard benefits of employee recognition

We all love having something to look forward to and designing a program to reward and recognize your can definitely encourage the whole office to develop a deeper commitment to each other and the business.

Here's some math that makes a clear case for employee recognition:

  • 69% of employees saying they would work harder if they felt their efforts were better recognized. — Harvard Business Review
  • 58% of employees said managers and bosses could get more engagement out their employees by simply by offering more encouragement. — Psychometrics
  • 88% of employees who received strong performance recognition were proactively innovating, compared to 46% of employees who received weak performance recognition. — Cicero
  • Businesses with a "recognition-rich" culture have 31% less voluntary turnover. — Bersin

If that's not enough to convince your CEO it's time to invest in an employee recognition program, try this:

Companies who spend a minimum of 1% of payroll on recognition are 79% more likely to have better financial results.

Despite the massive market for employee incentivization, employee recognition programs don’t have to cripple your budget.

5 easy (yet overlooked) ways to recognize your employees

Employee recognition programs are not what they used to be and as the experts note, real employee recognition has basically nothing to do with mass-manufactured trophies or bringing your pet to work, and everything to do with how you treat your people in the day-to-day.

Here are five simple ways to make your employees feel appreciated.

#1 - Say "thanks"

According to Harvard Business School professor, Francesca Gino, “Receiving expressions of gratitude makes us feel a heightened sense of self-worth, and that in turn triggers other helpful behaviors toward both the person we are helping and other people, too.”

Francesca and Wharton professor Adam Grant measured a groups of students’ sense of self-worth after receiving feedback on performance. They found that 25% of the group that received just an acknowledgment felt higher levels of self-worth, compared with 55% of the group that received thanks.

Apparently, there's a pretty big difference between "Good job" and "Thanks for doing a good job."

#2 - Meet one-on-one

The days of tenure-based recognition and employees of the month are long gone. Those methods just don't work on younger employees, especially considering how often they change roles.

As Gallup’s chief scientist Jim Harter puts it, "recognition is a short-term need that has to be satisfied on an ongoing basis -- weekly, maybe daily."

And nothing says you care more than taking time out of your hectic schedule for a set one-on-one. There are a number of reasons to meet privately with your employees. If you're looking for a little inspiration (or questions to get the convo started), start here with our post on 11 Types of Employee One-on-ones.

#3 - Encourage peer-to-peer praise

We love managers, but sometimes their faces are just too close to the mirror to see what's really happening within the team.

Peers who work shoulder to shoulder on the business's frontline will always know when someone deserves a pat on the back. Peer-to-peer recognition can also help offset some of the rater effects that can skew a manager's perspective and contribute to a broader environment of support and recognition.

The best way to encourage peer-to-peer recognition is to simply lead by example. Don't be afraid to say something nice about a high-performing employee or manager, even if they're from a separate or "competing" department. You might be surprised at how quickly others follow suit.

#4 - Talk about what's next

According to Mercer, 78% of employees would stay with their current company if they knew there was a clear career path for advancement. In another survey, 53% of employees said respect for their knowledge and experience was their biggest expectation from management.

Performance reviews are the perfect opportunity to show your employees you appreciate their potential and you're ready to take advantage of it. Remember, recognition doesn't always have to be delivered in the form of a pay raise or promotion (though those things do help!)

What matters most is that you have a system in place to help them feel great by keeping that momentum toward the bigger picture.

#5 - Follow up

If your employees are disgruntled and disengaged, it's usually due to a lack of follow-through on the part of the manager or exec team.

Any exec can call an employee into their office and ask for the next big idea, but not many can fearlessly hand over the trust, resources and autonomy it takes to let the employee run that idea past the finish line.

If you're committed to showing your employees you care, you must have a system in place for delivering and collecting feedback on both sides of the table, and actively follow up to measure your progress on shared goals.


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Does HR do enough to train managers?

Picture this.

You just moved one of your best employees into a management role. As an employee they were smart, savvy, and socially skilled — but now they’re stressed and struggling, and so is their team.

You're six months in and the promotion is starting to look like a bad decision.

An all-too-common scenario

Effective managers and supervisors make a BIG impact on the office.

In fact, according to Harvard Business Review 88% of employees with supervisor support felt “motivated to do the very best” and 86% felt satisfied with the job.

And when a manager's not working out, we feel that lack of support even more acutely.

Nine out of ten times, the manager is seen as a "bad fit" and the lack of support spreads through the office like a plague. Rather than work on it with the manager, everyone suffers in silence until they eventually end up leaving, usually full of resentment that they didn't get the support they needed either.

But the problem isn't just the manager, HR also has a role to play.

Far too many HR leaders simply assume a new manager can snap right into the job after an hour of training, or no training at all. But even if the new manager was a star performer for years before being promoted, the role of manager is vastly different from that of employee.

No matter how experienced they are, all managers need strong, consistent training and support in order to own the role of manager successfully.

Do you have a plan for training managers?

At first, it can be tricky to know how to train managers.

There are so many "off-the-shelf" solutions that work perfectly for employees, but management is a different game and it requires a whole other set of tools. HR needs a solid curriculum for onboarding new managers — and they need to work it consistently until it starts to feel like a natural part of the business.

Assess your current approach (or lack thereof)

Leadership trainer and expert Dan McCarthy offers some great ways to get started with training your managers. First, he recommends some “pre-work” in the form of assessing what your company's needs and goals are.

The next question is how do both your official and your unwritten policies align with those goals?

Take an objective look at your handbooks, policies and guidelines, and don't be afraid to face up to your daily practices and politics, either. If your HR mission statement says you support your people, but your entire staff complains whenever a manager seems to drop the ball, that lack of alignment will be immediately be sniffed out by your managers and employees alike.

Address the soft skills (or lack thereof)

The skills and guidelines a new manager needs to learn will always depend on your company's unique vision and goals, but if there's one thing every manager across the board will require, it's the ability to coach others.

Interpersonal skills are absolutely critical to a manager's success. But the same skills that help employees rise through the ranks (e.g., hard work, attention to detail, ability to hit targets and deadlines, etc.) are not inherently indicative of strong emotional intelligence.

A manager simply cannot thrive in their role without the ability to deliver feedback and coach employees effectively.

Dan Schwartz, founder of the Ground Floor Leadership Institute writes that, “it is the manager’s responsibility to ask the question, ‘What can I do to make you more successful?’”. Dan recommends having new managers role-play giving constructive feedback to each other. It might feel a little silly at first, but a firm, compassionate, diplomatic manager is exactly what your employees need and want.

Teach autonomy by example

Managers also need to know how to delegate, organize, and step back.

Delegating can be hard to teach but modelling it by giving your manager some space to manage in their own style can be a great start.

Note that a coaching approach is crucial, especially when it comes to millenials and younger workers. Instead of telling them how to do their job, simply encourage your managers to be accountable for their own teams.

Never leave your managers hanging

Many HR leaders will give managers a two-hour training session the day before they start, then walk away.

But as HR, it's your responsibility to make sure the people come before the processes. Check in with managers at critical times throughout the year, such as before or after a major launch, performance review or business milestone.

And the next time you see someone pointing the finger at management, take a moment to think about how your managers have been trained. Do they have the space, resources, and ongoing support they need to shine in their own way? If not, the problem may be bigger than the manager.

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9 Things Performance Reviews Should Accomplish

It's no secret that performance reviews get a bad rap.

Come November, they can hang like a black cloud over the office with both managers and employees dreading the year-end sit down.

But performance reviews aren't something your people should have to "survive" each year. Done right, your performance review process can be a crucial ally for your business.

If you're rethinking your review process, here are nine simple but powerful things it should accomplish. (Hint: None of them are, “destroy office morale once a year.”)

1. Start a conversation

A performance review should start an ongoing dialogue between employee and manager. HR expert Susan Heathfield calls conversation the "key word” for a performance review. When employees get "talked at" by a manager they can feel like they’re being punished, even if they aren’t. Turning the review into a conversation by using open-ended questions about the employee’s expectations and goals can help put everyone at ease.

2. Invite more opinions than just the manager’s

Making the review a conversation is a critical first step, but a truly effective performance review process can bring in multiple viewpoints for a more complete picture of what's happening on the ground. Managers can be as biased as anybody else and while manager reviews are still the best we have, it can be helpful to bring more of the office together and collect peer, self-reviews and employee-to-employer feedback in order to get a better feel for opinions and ideas that often go unvoiced.

3. Build on feedback regularly and consistently

According to Deloitte, 58% of HR executives considered reviews an ineffective use of supervisors' time — and don't get us started on how your employees see it.

Too many organizations make the mistake of funneling all feedback into one massive annual review, when a lighter, more regular model would be both easier to implement and better received by all. An effective performance management process should build on the feedback of each meeting, check-in, or review to deliver a steady stream of empowerment and accountability (not to mention, profits!) throughout the year.

4. Make duties and responsibilities crystal clear

Today's business climate requires a greater level of adaptability than ever before. Most managers and employers take it for granted that their employees know exactly what's required of them, but more often than not, performance reviews are plagued with vague and arcane language that leaves employees confused and uninspired.

A truly effective performance review will make it easy to give specific feedback that helps employees understand how their role is evolving and lays out clear steps for how to progress and develop within the company.

If you can go the extra mile by offering a specific solution, even better. For example, say your HR department is rolling out a new learning and development program, managers could try suggesting a relevant training that might help the employee strengthen their skills in a specific area.

5. Help employees get better at their jobs

This might be the most obvious of reason for why everyone everywhere should do performance reviews — yet this fundamental message can easily get lost among the latest business or HR trend du jour.

At its core, a performance review absolutely can and should improve employee performance, but only if it addresses an employee's performance in a way that’s clear, specific and firmly focused on moving forward. In other words, if it doesn't feel easy, it probably isn't helping.

6. Help managers get better at their jobs too

Performance reviews can help managers and HR just as much as it helps employees.

Employee feedback and 360 reviews are just some of the ways you can use reviews to get past biases and see the reality of what’s going on in the office. Even the simple act of encouraging your managers to use more relevant, compassionate questions in employee meetings and reviews will help reveal insights that can have a major impact on their ability to lead.

7. Treat employees more fairly

One reason employees dislike performance reviews is because they seem unfair by way of being inaccurate. Performance reviews can be a good time to put an employee up for a promotion or pay raise, but your process needs to be fair and objective if you don't want it to backfire. Develop a simple, objective performance management system, then work with HR to train your managers to give fairer reviews within that supportive framework.

8. Give employees a chance to think about their own performance

Employees shouldn’t see feedback as a passive affair. A great performance review process makes your people feel actively involved in managing their own performance, without ever feeling daunted or intimidated by the process itself.

Letting employees evaluate themselves is a great way to spark that sense of ownership, while also getting a deeper reading on performance. Author, speaker, and HR pro Jessica Miller-Merrell says, "Most employees tend to be harder on themself then their boss would be when reviewing their performance. This will give the employer more details on how the employee has performed, because they are more likely to remember everything, as opposed to a supervisor who’s keeping track of 7-10 employees."

9. Build and maintain office morale

Review time is done. Work is back on. If everyone feels exhausted, anxious, and frustrated then there’s a problem with the review process.

Take the time to reframe your process in a way that will build and maintain momentum for your people and your business. Because at the end of the day, performance reviews shouldn’t be a dreaded blight on the office, but an ongoing opportunity for growth.

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Motivation vs. Determination: Why you should know the difference.

“I’m motivated” versus “I’m determined”.

In a lot of conversations, you could probably say either sentence and get the same idea across.

Yet, there is a difference. To put it in the words of executive coach Jamie Douraghy, “Motivation is what gets you started. Determination is what helps you finish what you started.”

If we’re determined to do something we’ll stay on it, even after that initial motivation disappears. For most c-level and HR leaders, that's exactly the kind of drive you dream of seeing in your employees.

So why does the highly motivated, truly determined employee seem so elusive?

What makes employee motivation and what makes determination?

There are thousands of articles on how to motivate your employees.

Most of the traditional advice focuses on encouraging more fun at work, recognizing individual contributions and, if you really want to go big, integrating some sweet perks into the mix.

And that all makes sense. After all, can you imagine a workplace where everyone communicates clearly, thanks each other (both verbally and with rewards), and works in an office with a fully stocked kitchen and and the latest ergonomic workstations?

It would be hard not to feel motivated at a place like that, right? Or would it?

The truth is, both motivation and determination probably come from somewhere much simpler.

Professor Edward Deci and clinical psychologist Richard Ryan created the basis for something called the self-determination theory. Like the name suggests, the idea is that most people are already intrinsically motivated and determined. The trick is to sustain it.

Self-determination theory suggests that fostering a sense of “autonomy, competence, and relatedness” helps make sure people don’t lose the intrinsic determination they start with. But doing that in the hustle and bustle of a busy workplace is a whole lot harder than it sounds.

Why do employees lose their motivation?

It can be easy to think of employee motivation in terms of giving.

Giving employees proper feedback, acknowledgement and rewards, all contributes to their level of motivation. But if we already have an inherent sense of determination, then maybe employee motivation is more about simply not taking anything away.

Business consultant and author of Good to Great, Jim Collins reverses the framework and suggests that people usually start with motivation and end up demotivated. He goes so far as to say that a boss thinking they need to motivate you is, “discounting what you really are as a person.” Instead, he suggests ways to avoid demotivating.

Here are Jim's three strategies:

  1. Address the problems.
  2. Don’t come into a meeting with a decision already made.
  3. Show tangible results.

According to Jim, these factors help keep the motivation on your side. He argues that it's the opposite—avoiding problems, making decisions before asking for input, and pointing to intangibles—that robs your employees of the natural motivation they came in with.

Will a performance review help or hurt?

At the end of the day, it might not be a question of how to motivate through performance reviews, but how to make sure your performance review process doesn’t demotivate your employees.

Consider whether your review process and management style gives employees a greater feeling of autonomy and whether you're really ready to listen with open ears to what they have to say. If you're taking the time and steps necessary to address problems head on, and use tangible data to backup your decisions, the rest will take care of itself.

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How to Use Performance Reviews to Spot Future Talent

I once attended a high-level conference of executives managing high growth enterprises and many were in industries facing extreme disruption.

In a panel discussion on talent management, these fast-moving c-levels bemoaned increasing turnover rates and agreed that "adaptability" was prerequisite for future talent.

And they were right. Generic job descriptions have a tough time keeping pace with modern business.

But apart from revamping your entire organizational hierarchy (which is neither easy, nor a sure bet for solving your succession planning problems), what can you do to align the right talent to the right role? Here are some practical steps to take.

Go Beyond "the Role"

As it turns out, HR consultant Professor David Clutterbuck had a similar experience to my own.

David was moderating a panel of HR practitioners on the topic of succession planning and was completely blown away by one panelist's (a top HR dog at a leading multinational) comment that, "We are running 21st Century organizations with 19th Century ideas about succession planning."

The comment sent David on an in-depth expedition into succession planning practices in which he interviewed dozens of HR professionals across the globe to find out what works and what doesn't when it comes to succession planning.

Here's one of the biggest problems David uncovered:

"They [HR leaders and managers] expect the individual to adapt to the job description. Yet talented employees rapidly shape the job to their own strengths and interests. The more detailed the job description, the more candidates it is likely to deter and the more likely that the new incumbent will be like the previous one. Yet the transition between one incumbent and the next is an important opportunity for new perspectives. A critical question for candidates is: 'What can you bring to this role, that’s different?'"

Instead of attempting to judge the strength of a candidate on a set of outdated competences, David recommends using three simple criteria to identify future talent:

  1. Continued investment in their own development
  2. Track record of assisting the development of others
  3. Ambition to achieve greater responsibilities

David also sheds light on some of the most common misconceptions among managers and HR leaders that keep them from finding innovative solutions to succession planning. For example, factors such as ethnicity, gender and demand for work-life balance can make a big difference in how a high-potential candidate will view, negotiate and consider a promotion or offer.

And regardless of their background and professional goals, any employee who believes they're responsible for one particular set of tasks will feel justifiably blindsided when they suddenly find out they're expected to change, adapt to, or even innovate a totally new way of doing business, without any official acknowledgement that their role has changed.

By encouraging employees to initiate their own growth and development, you not only foster greater drive and accountability, you leave the door open to getting the kind of game-changing insights that can keep your organization on the leading edge, without having to force it.

But this means managers, execs and HR leaders must be willing to adapt roles and hierarchies to the changing needs of both the business and the people driving it. And that's not going to happen if your performance review process is as rigid and outdated as a jargon-packed job description.

Questions to Ask

Performance reviews are a great way to track the things that really matter.

The key is to consistently collect feedback about an employee's job satisfaction and goal-getting capabilities, and balance those insights with their individual long-term vision for professional growth.

We've all met the account rep who was once an excellent producer on the sales floor and is now a miserable mid-level manager. That's why the success or failure of your performance review and succession planning system depends in no small part, on the questions you ask.

Start by taking the temperature of your talent pool. If you're one of many organizations focused on reducing turnover, you probably already have some form of the 'Are you happy?' meeting in place.

Here are some of the key questions you may want to mix into your performance review process to help guide your succession planning. Keep in mind, these can be distributed and recorded via your performance management tool, or added to the system later if it's something that needs to take place in a more personal or informal setting.

Examples of 'Are you happy' questions:

  1. Are you happy working here?
  2. Do you feel proud of what you do here?
  3. Do you enjoy coming into work?
  4. What parts of your job make you unhappy?
  5. What part of your work energizes you?

When thinking about succession planning, it's important to remember that everyone develops in different ways and at different speeds. Aligning the 'Are you happy' questions with key project milestones, 360 reviews, or coaching programs is a great way to see what tasks and responsibilities are the most and least motivating for your people.

Knowing what adds to, or detracts from, the energetic reserves of your employees is key to helping you assess how they can excel in the future, whether that's in an established role, a newly created position or a lateral change in the scope of an employee's core responsibilities.

Examples of 'Long term goals' questions:

  1. What’s your dream job?
  2. What’s your totally crazy idea that probably could never work, but you’d love if it could?
  3. What do you want to be doing 10 years from now?
  4. Is there someone who you think has an awesome life?
  5. What do you want to do in your next job?
  6. Do you feel like your work helps you make progress towards your goal?
  7. What part of your work here is most in line with your goals?
  8. Do you feel like you’re learning new things at work?
  9. Are there things you’d like to learn?
  10. Is there additional training or education that you’ve considered pursuing?
  11. Can we do anything to better align your work with your goals?
  12. Do you have skills that you think are underutilized at work?

Succession planning at its best is about getting the most out of everyone in your talent pool.

And no one knows how to get the most out of your employees better than your employees themselves. (That's right, they know better than your managers do.)

Instead of assuming you know what positions your individual contributors want to grow into, why not simply ask them what motivates them and where they're looking to go in life?

A great performance management tool will make it easy to align their personal goals with the company’s goals, resulting in smarter succession planning and better productivity from top to bottom (or in this case, bottom to top).

What Data Do You Really Need?

This last point is not going to win me any extra points, but here goes. One of the most helpful succession planning tools also happens to be the most tried and tested: the 9-box.

Love them or hate them, these classic performance plots are a great way to understand who your ideal successors will be. But as leadership development experts like Dan McCarthy have pointed out, a 9-box can also be used to help assess individual contributors and guide development planning.

For example, an organization may create development guidelines based on where an employee places on the grid and then use those guidelines as a sort of performance roadmap, helping to map feeder roles and offer a more personalized internal learning experience with every performance milestone.

According to Dan, "Most organizations use the 9-box as a tool to assess managers for potential to move up in the organization for succession planning. However, I’ve seen some leadership teams use it as way to discuss whether individual contributors have the potential “to grow, learn, and take on new responsibilities”, etc… They’re just defining for themselves what “potential” means, but it’s important to have clear and valid criteria, just as you would when assessing for “leadership” potential."

Your performance management tool can help you customize your 9-box scales in the way that makes the most sense for your organization. Because just like people, every business has different needs on the path to growth and development.

Stay tuned in to what's happening with yours, and you'll have no problem getting the talent you need to stay ahead of the game.


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4 Easy Ways to Get Your Performance Reviews Back on Track

Between staying on top of day-to-day tasks and good old-fashioned fear of confrontation, there are hundreds of ways your performance reviews can go off track. But with 69% of employees saying they would work harder if they felt their efforts were better recognized, it pays to have a steady appraisal system in place.

Here are four simple ways to get your performance review process back on track.

#1 - Know your goal

Your current business goal is surely not the same goal you set five years ago—it might not even be the same as the goal you had six months ago. But when was the last time your performance review process was updated to reflect those changes?

The very thought of combing through your appraisal forms to align each and every question with your latest top-level strategy would make any sane person want to run for the hills. But agillity is critical in today's business climate and you need a performance review process that can support big-picture decisions, no matter how quickly they happen.

Knowing where you're headed is the first crucial step to keeping performance reviews on track. Get clear on what the goal is at the organizational, team and individual level, then use a clear goal-tracking system to keep everyone empowered and accountable.

#2 - Lighten the load

Before Adobe famously changed its performance review process in 2015, managers were spending an average of 80,000 hours conducting annual reviews. At Deloitte, the number was a staggering 2 million hours company-wide.

Truth is, people don't like the annual performance review for the same reason they don't like the DMV. If your appraisal process feels arcane, time-consuming and bureaucratic, they'll do everything they can to avoid it.

If reviews aren't happening on time (or at all), take a close look at your process. What questions, systems or steps can be eliminated? It can be hard to let go of parts of the process that have been there since the beginning, but it's more important to have a system that works.

If there's a question that doesn't directly tie into a clear performance goal or KPI, don't be afraid to strike it out. Rest assured, when your performance review process is fast and effective, it will keep your teams on track.

#3 - Get specific

Business moves fast, which can sometimes leave a big gap between leadership and employees. If your review process doesn't reflect the real, on-the-ground goals and challenges your people are facing, it will feel totally irrelevant to your teams.

Sure, employees need to be tuned into the bigger picture. But they also need feedback as and when work is completed. In fact, 72% of employees believe their performance would improve if their managers would provide corrective feedback.

But if managers are operating under the belief that there's a one-time process in place for giving that feedback, they'll be all too happy to skip the kinds of uncomfortable, in-the-moment conversations that lead to better productivity now.

Encourage managers to adjust reviews to match goal changes at the ground level and give them free reign to deliver result-oriented feedback whenever the need arises. Make it easy for them to document that feedback in a central place where anyone who needs to can reference those insights for more relevant reviews in the future.

#4 - Make coaching easier

Speaking of managers, one of the biggest pitfalls of any performance review process is a manager's reluctance (or inability) to have tough conversations.

But linking performance reviews to specific goals and results not only makes it easier to give employees the feedback they need, when they need it—it also helps managers deliver negative feedback more effectively. Because it's all well and good to make blanket statements about "why managers need to be better coaches", but giving them the tools they need to do that is another game altogether.

A great performance management system will make it easy for managers to visualize what is working and what isn't, so they can focus their feedback on the hard data, and eliminate the hard feelings.


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How to Make Employees Feel Heard

There are millions of self-development books, articles and coaching programs with the aim of helping us learn how to "speak our truth", "live an authentic life" or "stand up for ourselves".

Take for example, social scientist and courage expert Brene Brown's latest book, Braving the Wilderness. The #1 New York Times best-seller sold 42,000 copies in the first week of its release (coming in second place for adult non-fiction after Hillary Clinton's, What Happened).

So why the obsession with speaking up?

In short, we feel awful when we don't. In fact, one of the five biggest regrets of the dying are: "I wish I'd had the courage to express my feelings." More than any office perk or benefit, giving your employees a voice is a sure way to make them feel great—both at work, and in life. Here's where to start.

Assess your employees' capacity for speaking up

Above all else, employees want to be recognized as individuals in the workplace. But the ability (or inability) to speak up is itself an extremely individual trait.

We all know the office extrovert never has a problem getting their point across, but just because a person is the loudest, doesn't mean they're right. Personality, character and upbringing all have a huge impact on a person's willingness to speak up and if you want to be an exceptional leader, you need to hear from everyone.

You may be surprised to uncover creative profit-driving insights sitting idle in the mind of your team's quiet stabilizer, or some very legitimate complaints building up resentment with one of your star performers who was brought up to "work things out yourself."

Step back and take an objective look at your team environment and all the different personalities within it. How can you balance the communication scale?

Address your capacity for listening

Let's face it. Leaders aren't always the best listeners.

After all, you're usually the one doing the talking. But if you truly value what your employees have to say, know that listening is a skill that can be learned and one that will make you a much more effective leader.

Start by taking stock of your current listening behaviors. How do your personal beliefs about listening and speaking up color your view of your employees? Do you tend to get bored, antsy or snappy when someone else is talking? Do you make eye contact or fidget with your computer?

According to Albert Mehrabian’s 7-38-55 Rule of Personal Communication, 93% of communication comes in the form of nonverbal cues (38% tone of voice and 55% body language). Resist your distractions and focus on the person in front of you.

Acknowledge the nonverbal hints coming from both sides of the conversation. Are you letting your employee know that you're engaged or losing interest? Do they look excited or disappointed? It's okay to respond to these cues in the moment.

Find a way to meet in the middle

Once you've acknowledged the unique communication styles of your team members and yourself, focus on creating opportunities where everyone can feel comfortable contributing to the discussion.

For example, in group meetings, extroverts will always shine. Even if you already have weekly one-on-ones in place, you may want to schedule additional private meetings with certain team members to ensure they're voicing their opinions and suggestions before and after major team announcements and discussions.

Make it a point to check in with your employees who haven't spoken up in a while. Show them they can trust you by acting on the feedback you receive. Going the extra mile to make your employees feel heard may seem like a headache in the short term, but it's an effort your people will never forget.


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Why Do Great Employees Quit?

Are "personal reasons" ever really the whole reason?

Probably not. Despite the contents of their resignation letter, the reality is most people quit because of something their employer either did, or failed to do. And it's time to start paying attention.

Unemployment is the lowest it's been in years and the open talent economy is no longer a prediction, but a reality. Your best people have a wealth of job options at their fingertips. (That's right. Get ready to see "war for talent" cliches back on HR conference agendas.)

You already know employee retention is expensive and of course you want to hang on to your best performers. But apart from investing in high-tech meditation pods or doling out raises you can't afford, how can you retain your best people?

We're going to tell you what many of your former employees wouldn't, so you can focus on what really matters to your top performers.

Employees quit because they just don't care anymore

According to Gallup, 87% of employees worldwide are disengaged at work—and that's not entirely their fault.

It's important to understand there's a fine line between burnout and apathy—and top performers don't just "get bored" or stop caring. Most of the time the real problem is simply an imbalance in workload or a lack of vision and motivation, both of which can be easily rectified with the right conversations and coaching.

Get the feeling your best people are starting to switch off? Meet with them immediately to find out why. What's stressing them out? Is there a part of the job that's just not working for them anymore? When was the last time they felt awesome about coming into work?

Be open to their feedback and consider whether a change in role or responsibilities would do the trick. And if you're worried about a pay raise, don't be. According to a survey from executive search firm Korn Ferry, 63% of employees would rather get a promotion than a raise.

For now, focus on coming up with a creative, collaborative way to keep your best talent and commit to working the math out later.

Employees quit when they don't see a way forward

Think back to your very first interview with your employee. You probably discussed the company mission and their individual career path as an important driver of that vision.

When was the last time you had a conversation like that?

People need to be reminded why they're coming into work every day. What is the big-picture point of even the smallest mundane tasks they're responsible for? Where does their time and effort actually lead? Better opportunities and a stronger career path is probably why they came to you in the first place. Have you delivered?

If your top performers are looking a little uninspired, meet with them to discuss the things they've done that have directly impacted the company in a positive way. Work together to create a defined development plan that aligns with the overarching vision.

As with starting a new diet or learning a new language, seeing your progress is what keeps you motivated to stick with it. And we do our best work when we're excited about what's next. Your performance tracking tool should make it easy for your people to visualize their progress and feel excited about the future.

Employees leave because they don't trust you

According to the 2017 Edelman Trust Barometer, 63% of survey respondents said CEOs are only somewhat or not at all credible. Ouch.

There's a lot of manager-bashing on the topic of why people quit, but managers and CEOs probably deserve more credit. Most of them care deeply about the happiness and work satisfaction of their employees—and they absolutely want to keep their best people.

But they're busy. Really busy. They don't always have time to give employees the feedback and attention they deserve. More importantly, they don't always make time to follow up on the feedback they get.

For leaders to effectively bridge the trust gap, they need to prove their commitment by following up on the conversations they have with their employees. Even if that's just to say, "I need more time on this. Let's discuss it again at the beginning of Q2."

Set the date. Prepare for the meeting and act on the feedback you receive. Or, explain why you didn't. At least you'll be letting them know you value them enough to keep the conversation going.

What can you do about it?

Many recruiters and HR vendors will advise leaders to conduct a 'stay interview' with the goal of course, being to uncover some key insight you can act on to prevent them from leaving.

That's not a bad idea, but it's really only one step up from the dreaded exit interview. A truly preventative approach is one that goes straight to the heart of your employee's biggest motivations and is always focused on retaining your best people.

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How HR Can Train Managers To Deliver Better Reviews


From pay increases to sales targets, some of our most crucial business decisions boil right down to our performance data.

But unfortunately, manager ratings just aren't as accurate as we'd like them to be. Here are some simple ways to help your managers improve their performance review skills, so you can make better decisions for your people and your business.

Find out what's really holding them back

If you ask them, most managers will agree that performance reviews are important. But if employee appraisals are rushed, incomplete, or not happening when they're supposed to, there are probably some very real ground-level fears holding them back.

Dealing with subjects like pay and performance takes A LOT of courage. Before you launch into your manager training program, take a minute to sit down with your team leaders and have an open and honest conversation about their concerns.

Are they worried about how the feedback will be received? Confused about how to carry out a performance review that doesn't come with a pay increase? Once you know what the gaps are in your performance review system, you can adjust your process to eliminate those concerns or focus your training on specific areas, such as how to handle difficult conversations.

Tone down the admin

We all know performance reviews serve an administrative and compliance purpose, but more often than not, a company's review process is heavily skewed toward the mind-numbing procedural elements at the expense of the performance and productivity-driving benefits managers can get excited about.

Work to remove the administrative burden of your reviews so HR can spend less time training managers on procedure and more time coaching them on improving their performance feedback. Remind managers why performance appraisals are important to them, the employee and the organization at large so they know how to frame their conversations in a way that's productive and inspiring for everyone involved.

Bring biases out into the light

Truth is, we're all a little biased. And that's ok—as long as we acknowledge it. But it's a lot easier to spot bias in someone else, than to find it in ourselves.

Train managers to become aware of their own biases for a fairer, more accurate review process. Here are five of the most common biases according to HR insider and founder of the HR Bartender blog, Sharlyn Lauby:

  1. Contrast - An employee's performance is compared to that of other employees instead of the company standard.
  2. Halo - An employee is seen as a star performer because they excel in one particular area.
  3. Horn - An employee is seen as a poor performer because they perform poorly in one particular area.
  4. Leniency - A manager gives everyone a 'satisfactory' score, usually because they're too burned out by the review process to offer thoughtful feedback to each employee.
  5. Recency - The employee's most recent performance colors the entire appraisal.

Create a culture of coaching

Most managers either shy away from giving negative feedback, or end up inadvertently demotivating the employee in a misguided attempt to deliver constructive criticism. But negative feedback is essential to growth and the good news is, your employees want it.

Once you've uncovered any potential biases and set a clear standard of objectivity, it's time to help managers deliver negative feedback effectively. Encourage managers to take on the role of a coach as opposed to "judge", "boss" or "critic". A great coach goes beyond the criticism to help their team strengthen their skills and work together to devise the next play—all with one eye set firmly on a winning game plan.

Craft your manager training program around your performance appraisal strategy with regular refreshers near review time. For some organizations, this may be a week-long intensive course held annually, for others it might just be a quick check-in at the end of the month.

Whatever your training program looks like, remember that by simply taking the initiative to help managers deliver performance reviews more effectively, you're leading by example to help all the coaches within your company make better calls. 

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Are Your Employee Reviews Getting Done?

The HR world is changing fast. Tech is changing, talent is changing, and the future of work will look starkly different than in decades past.

Understandably, many business leaders are rethinking their performance management systems in an attempt to modernize their approach—and there's no shortage of tools out there to help them do it. But 'new' doesn't always mean 'effective'.

Before you embark on a complete overhaul of your performance management process, make sure you have a system that is extremely easy for your people to use. Because a performance management solution your employees actually enjoy using is the only surefire way to make sure reviews are happening when they're supposed to.

Communication vs. consistency

We all know it's important to rally your people around your goals, but too many business leaders launch a new initiative, then go straight back to the same old habits.

Even if you did a stellar job communicating the vision behind your performance management upgrade, your people need to see strong, consistent action to back that up. And that kind of follow through can't happen if your appraisal tools aren't adapted to the day-to-day rhythm and workflows of your office.

Choosing a performance management system that enhances your current best practices is crucial to ensuring reviews get done on a regular basis. A great performance management tool should be dead easy for your people to use and keep using. And as a big cherry on top, a user-friendly system that's a total breeze to use is a much easier sell internally.

Because as awesome as your vision is, most business users are caught up in the daily pressures of goals, deadlines, etc.—they won't always stop to think about why performance reviews are important. What they really want is a fast, easy way to give feedback and a tool that’s fun to use.

Features vs. everyday practicality

Most performance management systems are built around the "hottest new idea in talent management", without deeper consideration for how an organization will actually use the tool day-to-day.

But limiting your performance management process to the latest HR dogma can definitely impede your success in the future when the CEO wants to try something else. On the flip side, many software vendors (especially expensive enterprise products) have adapted to the needs of IT buyers, while overlooking the needs of the business end user. Instead of building for optimal usability at the ground level, they accommodate requests for complex features and requirements, even if those requests are only useful for a handful of users.

Product teams end up having to pile on extra features in order to please a select few clients. The result is a clunky, complex, and difficult to navigate tool—one that most business users conveniently "forget" to use it.

Great performance management software will be lean, dynamic and flexible enough to adapt to the real-world workflows within your organization—all without ever losing sight of the most important goal: Making performance reviews easy and effective for all business users.

The importance of ease of use

According to McKinsey, only 52% of executives said the way they spent their time matched their organizations’ strategic priorities. Managers typically spend 30-60% of their time on administrative tasks and meetings, when they could be using that time to coach their teams or make progress on big picture projects that drive value to the company's bottom line.

Employee performance is at the core of any winning business strategy, and if you want to make sure it's playing out how it's supposed to, it's got to feel like a joy, not another admin headache. That means it must be fun and simple to use.

After all, why even have a performance management system if no one's using it?


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

Congrats! You've made the decision to upgrade your performance management strategy. Get ready for a happier workforce and healthier bottom line!

As you consider different software solutions be sure to ask about these most important, and often overlooked, elements of great performance management software.

Cost of implementation

For most organizations, getting started with a dedicated performance management system will be completely new territory. You may have several members of your management or even leadership teams who are software-fatigued and wary of learning another system. That's why implementation is so important.

Your performance management system should come with the kind of support that makes a great first impression with users. But many performance management vendors only provide limited support, or charge support as a separate service.

Unless your entire office is extremely tech-savvy, you should probably select a solution that offers full training (preferably at no additional cost) at kickoff so that every employee feels great about using your new tool from day one.

Key Questions:

  • Who will be responsible for setting up the platform initially? You or your provider?
  • Are there any extra costs?
  • Is there human support during this process?
  • Will there be training for the staff?
  • If yes, is the training in-person or remote?


Ongoing support

Even with the smoothest launch possible, questions will arise. As mentioned, many vendors charge support as a separate service, which can dramatically increase your ongoing expenses throughout the year.

Look for a solution that offers regular, ongoing support at no additional cost to avoid sticker shock after kickoff.

Key Questions:

  • Are there any limits to the support you receive after implementation?
  • What form does ongoing support take?
  • Do you have someone's phone number? Email address?


Data security standards

We cannot overstate the importance of data security when it comes to selecting a performance management system. More data than ever before is falling into the laps of employers and HR departments, and you need to make sure your business is protected by using a system that's completely compliant.

Look for a solution that offers real-time encrypted backups (preferably using HTTPS protocol) to reduce any exposure to data loss. A performance management system that goes above and beyond will also have features that protect against liability, such as review reminders and alerts for missing signatures.

But beyond the legal and regulatory risks, performance data that is collected and stored properly can be a huge asset to your business. Make sure your performance management system offers consistent, compliant record keeping to help guide decisions about hiring, promotions, compensation, succession planning and more.

Key Questions:

  • What is the vendor’s data security policies?
  • How are passwords handled and stored?
  • Who owns the data, you or the vendor?
  • How is the data encrypted?
  • How often is the data backed-up?
  • What happens if the system ever goes down?



Let's say you've finally found a performance management system that checks all your boxes for features. Great, right? Not so fast. Just because a performance management tool is packed with bells and whistles does not mean it will work on a day-to-day level.

Employee performance is a company-wide initiative and if you really want to bring those productivity benefits home, your performance management software must be adopted by the whole organization. That means it must be intuitive and enjoyable to use.

This is especially important for teams on the go. Make sure your software can be accessed 24/7 on any device. You should be able to get more feedback, from more stakeholders, more often—while reducing the overall cost and admin burden of your performance management process.

Key Questions:

  • How easy is it to navigate the dashboard? From mobile and tablet?
  • How easy is it to get sign-off from within the system?
  • Can the system be customized with your branding?
  • What do the employee analytics and data visualizations look like?
  • What kind of reporting tools are included?



The state of performance management is changing fast and your software must be capable of evolving along with your business.

If the CEO asks for something new next year, will it require switching platforms? Or paying for an extra module? Make sure your performance management system is flexible enough to meet all your needs, both current and future.

Walk through your existing process and make sure the software can support every last step, or that there is an easy change that doesn't impact your long-term vision. Many solutions won't support seemingly simple things like multiple sign-offs, automatic calendar reminders or self-assessments.

Key Questions:

  • Does it include customizable automated workflows?
  • Can it deliver continuous feedback?
  • Does it have features for customizable 360° feedback, real-time and peer review feedback?
  • Is review timing flexible or fixed?
  • Can it deliver anonymous feedback?
  • Do system expansions and adjustments come at an additional cost?



As much as we wish purchasing a performance management solution were a golden ticket to running a perfect OKR process like Google, the reality is great performance management takes time. Find a solution that lets you automate your existing performance management process while helping you grow into the performance strategy you aspire to.

One of the most important features to look for is how the system traces personal performance objectives back to the organization's most important goals. A great performance management system will make it easy to break down top level objectives and track progress as part of the employee performance record.

Key Questions:

  • Can the system be configured around your workflows?
  • Can it cover all the bases included in your homegrown system?
  • Can permission be granted to the right role (manager, administrator, etc.) in order to allow them to create and edit appraisal forms?
  • Are your launchers, authors and signers all customizable?
  • Can managers add goals and development plans?
  • Can employees add goals and development plans?


Final Takeaways

Your people are your biggest business assets. And purchasing a performance management system is an important decision.

A future-proof performance management system will adjust to your business—not the other way around. Choose a system that will make it easy for you to make the incremental changes that will yield big results in employee happiness and productivity.


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Give Effortless Feedback with PerformYard

At PerformYard our goal is to build a flexible performance management solution that is also really easy to use.

That means we need to offer all the functionality of the big clunky enterprise tools, but maintain the ease-of-use found in overly simplified small business HR software. Our customers should be able to take any complex performance management strategy and run it effortlessly in PerformYard.

That is a never-ending challenge.

It was with this goal in mind that we recently rebuilt our recognition and notes features into the brand new (and totally amazing) Feedback feature. Feedback in PerformYard now allows you to recognize employees in front of the entire company, create private notes, or share feedback with your employees individually. All of this is accomplished through a single intuitive process, because we know managers don’t have time to learn another complicated piece of software.

Employees choose

  1. Who the feedback is about (one person or several)
  2. Who they want to share the feedback with
  3. And that’s it

Whatever feedback the employee chooses to give will then automatically be stored and shared with the appropriate people.



At review time, employee feedback from the previous year can be pulled up while filling out the review form to help inform a more complete picture of the employees performance.

Check out our customer support page to see more ways you could use Feedback at your organization.


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Should HR be part of the employee review process?

As an HR professional, you have a hand in a million different parts of the business.

On any given day you might be recruiting the right people, updating core policies or putting out interpersonal fires.

But when it comes to sitting down and evaluating the performance of your employees, just how involved should you be?

The fine line between autonomy and fairness

It's impossible to overemphasize the importance of fairness in creating an engaging and productive work environment. In fact, it's one of the top criteria for determining which organizations rank among the best places to work. And as an HR leader, you are your employees' chief advocate for fairness in the workplace.

But autonomy is of equal importance. Employees need feedback in order to have a strong sense of direction and satisfaction at work, but it's all for naught if your appraisal process makes them feel micromanaged or micro-analyzed.

Here are a few ways HR leaders can ensure fairness in the employee appraisal process, without breathing over your managers' shoulders, or having to sit in on every single meeting.

Design a fair, simple system

Any performance appraisal process that relies too heavily on either HR or managers, probably isn't as fair as you think it is. Design your system to ask the right people the right questions, so you can step back and let the team leaders do their jobs.

If your system is plagued with bottlenecks, meet with managers to get an idea for how they would structure the appraisal process if they were given complete free reign. In many cases, their ideas for a simpler process can inform some small but powerful changes to help win back time for your employees, executive team and HR. But of course, make sure you always view their suggestions through the lens of fairness, as only HR truly can.

Coach your managers

We've said before that great managers are great coaches. But who coaches the coaches? You guessed it: HR.

If you do a stellar job training your reviewers on how to structure, view and deliver the performance review, you won't need to do much else. Coaching your managers on performance appraisals is one of those one-time investments in your people that keeps paying off. If you use a rating system, it's also a good idea to make sure the ratings are calibrated so that a rating of 5 for one manager has the same guidelines, behaviors and expectations as the other.

Many HR leaders like to review appraisals before they're delivered to the employee. Whether or not you do that is completely up to you and your own hard-earned hunch about your teams and people. But if you've done a great job coaching your managers on delivering feedback, this may be another part of the process you can comfortably take yourself out of.

Mediate when necessary

In a perfect world, managers would know how to diplomatically and effectively deliver feedback, and employees would know not to take any part of the process personally.

But for better or worse, we live in a world where stuff happens. Performance appraisals can sometimes have a way of bringing issues to the surface and in the event of a strained or tense employee-manager relationship, HR will need to step in and be that advocate for fairness once again. In general, it's never a bad idea to check in with managers and employees after a performance review to see if they have any suggestions or concerns.

Document and follow up

Performance reviews are so much more than a compliance activity, but they definitely check that box as well. It's a natural part of the HR process to record and store evaluation records in order to remain compliant, but this information can also be used to assess past trends and drive future efficiencies in the process.

This may also include collecting and following up on employee feedback as well. A great way for HR to be involved in the process is to once again take on the role of the fair and objective mediator when looking at the evolution of your performance process over time. Where is there room for improvement? What do managers and employees need to know so that they can do it better themselves?

Adopt the role of a true performance review process strategist and you'll not only have happier people, but fewer tasks to bear.

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The Only 5 Employee Engagement Ideas That Work

Ever since "needy" Millennials joined the workforce and Silicon Valley giants started offering more and more gimmicky perks, the concept of employee engagement and fighting turnover has gone off the rails.

Some say we jumped the shark when introduced drag-racing tricycles into the office as part of their “funnovation” initiative.

There is nothing wrong with these perks, it’s just that they are beside-the-point.

That's because our goal shouldn’t be just to have happy employees who don’t leave the company. We should be building organizations of extremely productive employees who are also happy and don’t leave the company.

To achieve the latter we need to do something much more difficult than building a yogurt bar or calling the extra conference room the “meditation room.”

If we want our employees to be both productive and happy the source of the happiness must be the work itself, not peripheral perks. This could mean the work feels purposeful, or the work could feel fun, or the work could be an exciting challenge.

Are you still with me? If so, here are 5 foundational ideas for increasing employee engagement.

1. Align employee goals and company goals

One of the best ways for employees to find meaning in their work, is when they feel like they are advancing towards who they want to become as a person.

In a paper appropriately titled, “The ideal self as the driver of intentional change” researchers found that when working towards our own personal ambitions we achieve a unique degree of intrinsic motivation, engagement, and fulfillment.

How managers create this alignment will be different for everyone, but the first step is always the same. Managers must understand the personal ambitions of their employees.

2. Cultivate fun competition

Most of us are competitive, it’s human. We see our success in relative rather than absolute terms and so we are always trying to be not just better, but better than our peers. The American Satirist H. L. Mencken famously said wealth is, “any income that is at least $100 more a year than the income of one’s wife’s sister’s husband.” (or husband’s brother’s wife).

When cultivating competition it is important to respect its power and not let things get out of control. There are countless examples of perverse competitive environments where incentives become misaligned with company goals. One way to prevent this is to think about who is competing and who they are competing against. The simplest solution is to frame the competition as the whole company competing against peer companies.

3. Walk employees up the ladder of purpose

There is an interesting paper called, A Theory of Action Identification, which looks at how we identify our actions. For example at a low level I’m currently typing on a computer, on a higher level I’m helping people around the world live happier lives by becoming more engaged at work.

When employees are disengaged they’re often saying things like, “I enter numbers into excel documents all day,” or “I push paper.” A manager can help energize employees by walking them up a ladder of purpose, connecting their work to more intrinsically meaningful things it contributes to. This technique can help people find meaning in even the most mundane tasks.

4. Get rid of bad jobs

It is important to be able to see how every job in your organization could be meaningful. If you can’t, then you might be better off getting rid it.

Almost any job can meaningful, you just need to be willing to invest in making it so. Harvard Business Review is currently doing a great series called A Case for Good Jobs on how companies like GAP and McDonalds are investing in their front line jobs to make them more appealing for employees.

If through some lack of creativity you can’t make one of the roles at your organization a “good job” you are probably better off contracting that work out, because disengagement is contagious.

5. Fire bad people

The truth is not everyone is looking for a meaningful relationship with work. There are some people who just want a paycheck from their job and nothing else. Don’t be afraid to part with these people, because again, disengagement is contagious.

However, remember that most disengaged employees are just the victims of bad jobs and bad management, and they have become disengaged over time. Work closely with them using the techniques above and you’ll find they quickly come back to life. 

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