The Right Way to Measure Employee Performance

November 18, 2022

Employee performance reviews are a regulated assessment method used by companies to evaluate an employee’s work. They are a means to identify a worker’s strengths and weaknesses, allowing them to set goals for future improvement. Also called performance appraisals or performance evaluations, these procedures have been the primary employee productivity and efficiency measurement for many organizations.  And that sounds about as excited as the average employee feels about the process.

Annual performance reviews tend to be forced and awkward. In addition, it doesn’t even contribute to the employee’s desire to get better at their jobs. According to a survey conducted by Gallup, only 14 percent of employees are encouraged to improve following their employee performance review. So it is no surprise that at least 30 Fortune 500 companies got rid of their performance reviews at the end of 2015.

Fortunately, an employee performance review is not the only channel to provide feedback. Therefore, it is possible to implement an alternate and practical approach to create a work environment that meets the expectations of modern employees. 

Why Annual Performance Reviews Don’t Work

Performance reviews can provide the opportunity for employees to receive recognition for good work and pointers for improvement areas. However, the problem is employee reviews are often poorly executed.

Leaders frequently struggle to rate their teams, prompting them to take a “copy and paste” approach to their reviews. While this makes it faster and easier for managers to conduct evaluations, it, unfortunately, suggests a lack of importance to the employee’s contributions. 

Performance evaluations are even worse from the worker’s perspective. An annual review means they must wait a year to receive feedback to determine their next salary raise. Furthermore, if there is any delay in their performance assessment schedule, it often sends a message that the employee’s contributions are not a priority for the company.

Age differences also play a role in the ineffectiveness of employee performance review practices. For example, the baby boomer generation accepts this method since they are accustomed to working for one company for as long as possible. On the other hand, the millennial workforce prefers more frequent feedback and guided coaching.

Better Alternatives To Boost Effectiveness of Employee Performance

If annual worker evaluations are generally ineffective, then how can companies boost the effectiveness of the feedback process? Here are our top three recommendations:

  • Build Relationships: Your priority should be establishing and strengthening relationships with your team. Sit down with them and discuss how they like to get feedback. Doing this demonstrates your commitment to offering support in the best way for them.
  • Tailor Your Strategy: There is no one-size-fits-all regarding employee performance review methods. Some employees might prefer more frequent feedback than others. Therefore, you should tailor your approach to the individual to bolster your relationship with them.
  • Adjust the Process: Don’t expect to get it right the first time; it takes a lot of experimentation before you arrive at the ideal process that works well for both the employee and the organization. Encourage your employees to give feedback and improve the feedback/evaluation process as you go.

Create a High-Performance Culture With HPWP Group

Annual performance reviews have been the norm for employee productivity measurement for decades. However, just because they’re “the way it’s always been done” doesn’t mean they are the best option for the current work landscape. Modern employees expect more from management and crave real-time feedback they can improve from.

If you want to learn more about effectively managing employee performance, then reach out to HPWP Group. We offer leadership and organizational development solutions that help you create the best workplace possible.

Contact us today!