Performance Review Systems

Please read the following article and write a couple of paragraphs explaining what you might do
to ensure good performance evaluations for yourself and for employees under your leadership in
your career going forward.
The DOs and DON’Ts of Performance Reviews
Jan 24, 2019
By BJ Gallagher
Is there anyone in the workplace who has not undergone the torture of a performance review done badly? I’m sure we have all had to endure the torment of a well-intentioned but badlyexecuted performance appraisal—in which we felt as if we were the ones being executed!
Blindfold, anyone? Got any last words before the verbal assault begins? I don’t even smoke but
I’m tempted to ask for a final cigarette!
Most performance review systems in most organizations are so poorly designed and conducted
that they actually do more harm than good. I often tell my clients that they would be better off
doing nothing rather than doing what they’re currently doing! I’m not kidding.
Here are 10 common mistakes managers make, and tips for avoiding them. These are practical
action steps you can take to design and implement a system that will do what you want it to do—
improve performance!
Mistake: The performance review is a one-way, top-down process in which the boss serves as
judge and jury of employees’ behavior and achievements on the job.
Solution: Make it a two-way process, at the very least. (If you really want an effective review
system, design a 360-degree system that involves peer reviews as well as a self-review.) The
employee should have written a self-appraisal prior to the meeting with his or her boss—a written
document comparable to what the boss is preparing. That way, both people in the meeting will be
focused on the documentation of job performance, instead of the boss focusing on the employee.
Remember: We do not evaluate people—we evaluate their results.

After a brief setting-the-tone introductory comment or two by the boss, the employee should be
invited to go over his or her self-appraisal first. This helps eliminate defensiveness and gets the
meeting off to a good start by establishing that it is a dialogue, a two-way conversation in which
both parties can share observations, perspectives, and comments about job performance.
You’ll find that your top performers will usually rate themselves lower than you do. That’s
because they have high expectations for themselves—often higher than you have for them.
You’ll find that the opposite is also true: Your poorest performers will often rate themselves higher
than you rate them. Whatever the situation, talking about the gap between your evaluation and
theirs will be fruitful in getting you both on the same page (both literally and figuratively) in terms
of future expectations.
Mistake: The review process tries to serve as a coaching tool for employee development, as well
as a compensation tool to decide salary increases.
Solution: Your performance reviews should be done for either development OR for compensation
—not both. If you’re interested in coaching and development for improved results in the future,
then unhook compensation from the process and focus only on the work itself. Conduct your
performance review discussions as far away as you can from the time of year when salary
decisions are made.
If you’re doing reviews in order to make salary decisions, that’s fine—just be clear that that’s what you’re doing. Then you can conduct your review conversations in the few weeks just before
raises are announced.
The problem with trying to combine both employee development and compensation decisions in
the same session is that employees are only going to pay attention to the money—all the rest will
go in one ear and out the other. You will get no coaching benefits from such a conversation.
Employees will appear to be paying attention to what you’re saying about their performance, but
they’re really just waiting to hear the magic number. Money talks—all else is lost.
Mistake: The person doing the appraisal has little or no day-to-day contact with the employee
whose performance is being judged.
Solution: This one is a no-brainer. The person having review conversations with an employee
should be the supervisor or manager who has the most contact with that employee and is in the
best position to accurately assess day-to-day results.
Mistake: Employees receive little or no advance notice of their “Judgment Day.”
Solution: Performance discussions ideally should be conducted on a regular basis, on a
schedule well-known and well-publicized to everyone in the organization.
Mistake: Managers are vague in their feedback to employees. Or they assign arbitrary numerical
“grades” with little or no substantiation.
Solution: Performance feedback needs to be well documented in order to be effective. Here’s where it helps to have a good paper trail—documentation of both the good results and the notso-good results.
Don’t rely on your memory in outlining how well the employee achieved his or her goals and met
your expectations. (The human memory is a mismatch detector and it will always do a good job
of remembering the bad stuff, while forgetting the good stuff.) Keep a file on each person who
reports to you, and make regular notes to yourself on behavior and results as you observe them
—the good, the bad, and yes, even the ugly. Encourage your employees to keep files for
themselves, so that they, too, have documentation when they are writing their self-appraisals.
Mutual documentation helps keep everyone’s focus on the job, not on the person.
Mistake: The review process tries to evaluate traits, rather than behaviors and results.
Solution: This is one of the most common mistakes I see on performance review forms—they try
to evaluate personal traits, such as leadership, motivation, conscientiousness, attitude and so
on. The problem with traits is that they are internal and subjective— almost impossible to
evaluate on a fair basis.
Instead of traits, keep your evaluation focused on two things: Behaviors and results. Behaviors
are actions that you can observe directly—she did the filing, he answered the phone, she called
on customers, he repaired the machines, and so on. Results are also observable: She achieved
her sales quota, he reduced waste by X%, she increased productivity by X amount, he
completed his projects on time, and so on.

Mistake: The appraisal is a once-a-year event that everyone tries to get through as quickly as
they can, because it’s painful for bosses and employees alike.
Solution: The primary goal in evaluating performance is to improve it. Therefore, you want to
design a meaningful system of coaching conversations that people welcome, find useful, and
deem valuable. Employees need regular feedback on how they’re doing—what they’re doing well
and what needs improvement. Once a year just doesn’t cut it. Design a simple, easy to use
system that encourages bosses and employees to engage in two-way conversations throughout
the year—that’s the only way you’ll get any real mileage out of a performance review system.
Mistake: There is no investigation of causes that underlie employees’ job performance problems.
Solution: People don’t perform poorly for no reason. There are always causes—but you’ll never
know what those causes are if you don’t make the review process one of give and take, support
and coaching, with both parties focused on the same objective—doing the best job possible.
If an employee is performing poorly, ask questions. Don’t assume you know the reason—or jump
to conclusions that he’s lazy, she’s dumb, he’s unmotivated, or she’s incompetent. Use your
performance review conversations as opportunities to find out what are the possible reasons for
an employee’s failure to meet standards and expectations. Hint: When an employee fails to
perform adequately, the primary reason is often the boss’s failure to coach!
Mistake: There is no follow-up action plan put in place at the end of the performance appraisal.

Solution: The final thing to discuss in a performance review conversation is “What next?” What
steps does the employee need to take to make sure that areas for improvement actually
improve? And what support does the employee need from you to make that happen? An action
plan is the perfect element to conclude an effective performance review discussion. Keep it
simple. Three or four next steps are just fine. Remember, this is the beginning of the next cycle in
the coaching process. Keep it positive and practical.
Mistake: Any attempt at pay-for-performance is ineffective because the difference in pay for a top
performer and a mediocre performer is so small as to be meaningless.
Solution: Well-intentioned attempts at pay-for-performance often backfire because there is too
little money available OR management is unwilling to make the hard choices about giving big
increases to top performers and no increases to poor performers. So they try to offer a token of
performance-based pay, which often backfires. The difference between a 3% increase and a 4%
increase is meaningless in any real financial terms—and all it does is create jealousy, hurt
feelings, and resentment among employees. My advice: If you can’t come up with REAL money
for REAL pay for performance, don’t do it at all. You’re better off giving everyone the same
percentage increase.