How to Convey the Importance of Performance Evaluations

Performance reviews are rated so poorly on average that they were more despised by recipients in a recent survey than cable companies, Internet providers and health insurance companies.

Findings like these cast performance reviews in such a negative light that it's a wonder they're still widely used. However, recent research has proven that they are valuable to companies that do them well, and suggests that performance reviews need to evolve, not be eliminated. In fact, research shows that companies that conduct effective performance reviews are 30% more likely to achieve their financial goals and three times more likely to successfully manage change.

Create a culture of feedback and recognition

Creating a company culture of positive feedback and recognition goes beyond individual performance reviews, but such regular conversations are essential. They provide an opportunity to recognize employees' time and energy when they have done their jobs well, while also demonstrating that the company supports them with constructive advice as they face challenges and new opportunities.

To create such a culture, feedback and recognition before, during and after performance reviews must be a consistent priority within the company. When feedback and recognition are seen as the norm, performance reviews will be less anxiety-provoking and will not be perceived as negatively by employees. Instead, they will see their performance review as a positive formal exercise designed to help them grow within a consistent, supportive culture, rather than a "showdown" between employees and their managers.

Companies and leaders should become familiar with (and comfortable with) collecting feedback. Some suggestions to get started include asking for employee opinions, understanding where employees are in their journey, tracking progress, adopting a developmental mindset, and elaborating on specific areas as needed.

Performance reviews don’t have to be scary
Strong companies don't use performance reviews as a one-way street where managers talk and employees listen. And a performance review should never feel like taking the SATs.

Instead, the best companies make performance reviews part of larger cycles of consistent recognition and feedback, use their insights to drive productive change for the company, and communicate the goals and benefits well in advance.

Employees who understand the purpose of performance reviews will engage with them, approach them with a positive attitude and see them as an opportunity for growth.

Purpose and Value of Performance Appraisals

Even as outdated approaches persist, more and more companies are taking advantage of the benefits of performance reviews. When done correctly, employees provide the company with useful feedback, become motivated and can advance their professional development and - crucially - contribute to the achievement of company goals.

Good performance reviews allow managers to give fair and actionable reviews to their direct reports. This can increase employee engagement, provide recognition and encouragement, and create tangible pathways for employee growth rooted in accountability.

In companies where performance management works well, employees will view performance reviews as one of many tools to help them succeed.

3 Ways to Communicate the Value of Performance Reviews to Your Employees

Designing an effective performance review process requires preparation and practice, and employers and managers must model the thoughtfulness they hope to see from their employees.

In particular, first time managers conducting performance reviews for the first time should prepare thoroughly before conducting their first performance review. Those who promote a culture of employee engagement and acceptance of performance reviews should focus on achievable goals. Employers need to communicate the benefits of performance reviews to employees and demonstrate that performance reviews can lead to real change. This will help employers and employees work together to create a greater culture of feedback and recognition.

1.Clearly communicate the benefits

When something has a bad reputation but is a necessary process, clear and transparent communication about the benefits is critical to employee buy-in. Unfortunately, this first step is all too often skipped.

Your motivated and confident employees may approach performance reviews with enthusiasm because they already know the benefits. However, most employees dread performance reviews and see them as an opportunity for their managers to tell them everything that's wrong with their work.

While honest feedback is an essential part of any appraisal, the employer must first highlight the benefits to the employee. What would convince your direct report that these conversations are a worthwhile use of their time?

First, performance reviews align an employee's role and daily responsibilities with the company's larger vision. This helps employees understand the “why” of their work, rather than just asking them to follow orders. And it makes employees feel like important members of a larger team rather than isolated individuals.

Employers must also convey to their employees that performance reviews are not reprimands (or an opportunity to be so), but rather an open and productive review. These sessions can serve to avoid misunderstandings and provide a pause, step back and recalibrate tasks and workload. When constructive feedback is offered, companies and leaders need to take time and think about what and how that feedback is given.

Finally, employers should communicate to employees that performance reviews are an opportunity for promotion and a possible raise.

2.Show that performance reviews lead to real change

If employees don't believe that performance reviews can lead to meaningful change - either for themselves or for the company - they are likely to approach performance reviews with a pessimistic, obligatory, or even aggressive attitude. If you communicate a process as mandatory and still nothing improves, employees will feel cheated or at least feel like the annual exercise is a waste of time.

When explaining the meaning and purpose of performance reviews, you must emphasize that the manager's role is also that of a listener, not just a feedback giver who demands correction.

Encourage employees to use performance reviews to discuss what's on their minds and how they see themselves within the company. In particular, be prepared to raise important topics that you might not address in normal one-on-one conversations. This could include things like:

Issues of bias - whether conscious or unconscious
Whether their work will be recognized if it is well done
How the employee can develop to achieve their own goals and better serve the company

Having made it clear that performance reviews are beneficial to both the employee and the employer, companies should follow up on what their employees say and take action. Actions are the best way to show an employee that you have heard and value their feedback. Performance reviews are an opportunity to discuss challenges and opportunities and a forum for developing plans and strategies to address them. Managers can play a critical role in driving this mindset while encouraging their employees to do the same.

3.Create a culture of feedback and recognition

Performance reviews don’t have to be scary

Strong companies don't use performance reviews as a one-way street where managers talk and employees listen. And a performance review should never feel like taking the SATs.

Employees who understand the purpose of performance reviews will engage with them, approach them with a positive attitude and see them as an opportunity for growth.

Check out IceHrm's performance module to understand how it can help you conduct meaningful evaluations.