Performance Management Resources

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

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10/15/2019
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.

Looking to implement BARS across your organization? PerformYard makes it easy to roll-out new programs company wide
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Examples

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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10/11/2019
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.

PerformYard provides the tools to transition from annual reviews to modern performance management
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One-on-Ones

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

Pros

  • 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.

Cons

  • 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.

Pros

  • 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.

Cons

  • 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.

Pros

  • 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.

Cons

  • 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.

Pros

  • 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.

Cons

  • 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.

Pros

  • 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.

Cons

  • 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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9/11/2019
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.

Pros

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.

Cons

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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9/11/2019
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

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

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

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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7/23/2019
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.

No matter which rating scale you choose, PerformYard makes it easy to automate and track goals, objectives and employee progress
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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

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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7/2/2019
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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6/27/2019
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.

Reviews

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.

Questions

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.

Timing

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.

Format

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.

Goals

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.

Feedback

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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6/19/2019
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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6/11/2019
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

Pros

“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.”

Cons

“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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6/4/2019
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.

PerformYard provides the tools for companies to implement focal point or anniversary date reviews -- or both
Learn More

 

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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5/9/2019
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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4/17/2019
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.

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1/17/2019
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
1/15/2019
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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1/10/2019
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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1/8/2019
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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12/18/2018
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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12/13/2018
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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12/11/2018
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.

PerformYard simplifies the upward feedback process so you can spend more time with your employees
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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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12/6/2018
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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12/4/2018
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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