Management Skill Series – Introduction to Performance Reviews

This is the third in a series of posts discussing management skills. If you haven’t already, please refer to the introduction first.

This topic of Performance Reviews will have several articles discussing several aspects of the process.

What are Performance Reviews?

These are a periodical process where every person in the company will be reviewed for the quality of their work. The person performing the review is normally their direct manager. Together with the person reviewed they will discuss the strengths and weaknesses, points to keep and improve, and goals for the future.

Each company handles this sensitive topic differently, but some are common. Employees seem to hate the process of being reviewed, team leaders seem to hate reviewing their friends and colleagues, and executives will often fail in understanding the results. HR will always praise its value, but the company as a whole will often fail in following through. Performance reviews are hard but everyone involved can benefit from having them.

Periodic performance reviews are almost always performed as a one-on-one meeting. Some companies may also call for HR to be included in the review. The talk is structured and may include some preparation work where the employee will fill what they see as their performance in the observed period. The manager will do their own preparations and will have a set of suggested goals. The manager should also prepare by reviewing the form filled by their employee – if such a form was used.

Performance Review Content

During the talk itself the manager should go over what they see as points worth mentioning. Such points might be:

  • Gaps between how the employee observes their work and how the manager sees it – for better or for worse
  • When both agree about exceptionally good (or bad) performance, note that as a point to maintain or strengthen
  • Points in performance that relate to future goals. If something is going to be a focal point in the future, it is worth discussing
  • Upcoming changes in strategy or formation
  • Expectations

It’s very important to remember that the manager mustn’t provide criticism alone, and should know what not to raise or discuss. Do not discuss a person’s character, because a person can’t change who they are. Any criticism should be directed at what a person does or how they act.

Proper criticism would be to tell an employee that they are not reviewing their research results and need to be their own critic. Improper criticism would be to simply tell them they’re lazy or are not attentive. A person can be guided to better work, but will not be driven forward by offense.

The person being reviewed will have the attention for raising their own feedback. That feedback can cover manager performance, corporate issues, requests or ideas. It’s a one-on-one that has more gravity than usual because no time should be spent talking on daily tasks.

After each review done right, the results should include:

For team members

  • A measurable set of both personal and professional goals for the person to focus on
  • Alignment between how well a team member thinks he’s doing and how the manager sees his performance
  • An understanding of how they can do their job better
  • A set career-path and expectations on training possibilities
  • A more open relationship with their manager

For team leaders

  • Feedback for the manager on how he’s perceived and notes on how to improve
  • Early-warning on issues of job satisfaction and grind
  • A list of expectations from team members for budget plans
  • More aligned, better functioning teams

False Assumptions

While the primary reasons for doing periodic performance reviews are noted above, team members and a lot of team leaders will assume that the reason is for HR and executives to know who to give raises to and who to kick out.

In order to understand why this is not true with a proper process, we will need to look at how budgets are planned and who has the final word regarding team members.

Budget and Raises

This process can be different between different companies. Here’s an example for how it could work in yours:

The budget is set before discussing individual raises. It includes the budget for raising salaries globaly. Each department and team are then assigned their own budget based on predictions and current salaries. Only then will team leaders be able to define what part of their salary budget will be allocated to which team member.

Do they need more than they were allocated? Does a certain team member deserve more than the budget allows? The team leader will then either allocate more by reducing other costs, or escalate to his department manager, who will attempt to divert more or refuse. The process can escalate up and up, or be denied at any point.

Hierarchy and Say

Managers have different styles. Some micro-manage, some rely on their teams. The same can be said about VPs and Directors, but as long as they rely on their team leaders – they will treat teams as units. When a team simply works and its leader knows what they’re doing, the team leader will be allowed a lot of freedom. Such team leaders will handle everything from deciding who gets raises, who gets fired, who gets hired and who gets to go on courses and conferences. As long as team leaders do their job and trust exists, they will be the ones to protect their team from any external flak. As long as they operate within budget, individual raises need not even go higher than the team leader (and HR department) for approval.

There are plenty of benefits for executives and HR managers in doing performance reviews – but those are secondary. In my experience executives should not spend their time reading summaries of performance reviews or attempt to draw conclusions from those. If they do have questions regarding individual team members, they will go to their lead and not to written summaries. The summaries exist mostly for the team member and then their manager.

The following article in the series will elaborate further on performance reviews and will propose a recipe for session frequency, content, and process to follow. If you’re supposed to give a performance review to your team, I really suggest that you introduce them to the process and why you are doing it – whether by sending them to this article or explaining yourself.

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