Traditional performance evaluations are going extinct. The rapid pace of change in the modern business landscape has decreased the utility of formal, once-a-year reviews, which once loomed large over workers’ careers and earnings.
Most employees won’t miss those dinosaurs, experts say, noting that younger workers especially crave more frequent feedback. They tend to be happier with the continuous performance review systems evolving to fill the void, which are “more frequent, more employee-centric, more coaching-in-nature conversations between manager and employees,” says Anna Tavis, clinical associate professor of human capital management at New York University.
No matter what kind of review system your company uses, the first step to mastering it is finding out how exactly you will be evaluated. Here, experts explain the different processes you may encounter and how to effectively use the feedback they provide.
Annual performance reviews
They’re not trendy anymore, but vestiges of the annual performance review do remain at some companies. These systems are largely designed to assess the extent to which workers meet company goals and reward top performers with salary increases and promotions.
At companies that use traditional evaluations, the approach tends to be “here’s your review, rating and salary, take it or leave it,” explains Josh Bersin, a global industry analyst who studies human resources practices.
Some annual reviews use quantitative ratings or rankings to measure workers. Others rely on qualitative performance review phrases, such as:
— Exceptional; exceeds expectations; meets expectations; improvement needed; unsatisfactory
— Skills observed; skills not observed
— Goals achieved; goals not achieved
Some companies use a “forced ranking” model made famous by General Electric to distinguish top performers from average and underperformers. Top and underperformers usually account for small percentages of the company’s workforce, leaving most people stuck vaguely in the middle.
“The rating is typically based on a curve where 80 percent of the people are averaged at about a C,” says Rajeev Behera, CEO of Reflektive, which sells performance management tools. “If you get the average score most people get, it equates to a modest staggered salary increase.”
Before an annual review, workers may have the opportunity to assess their own performances and influence how their managers evaluate them. In anticipation of this, employees should take notes throughout the year about their achievements and how they’ve helped meet or exceed company goals.
“If you can do that, you’ll have a better outcome in your performance review,” Behera says.
Workers not given the opportunity to submit self-reviews should still document their successes as they occur. Then, a few weeks before review time, they should present their managers with a list of specific examples to consider. Otherwise, Behera says, a manager who hasn’t taken good notes on her employees may base their reviews only on what she remembers from the previous few weeks or months.
In contrast to annual reviews, which assess an entire year’s worth of labor in one snapshot, continuous performance evaluations measure work in smaller increments and may take place at any time or during frequently scheduled meetings or “check-ins.” This system, which emphasizes coaching, allows managers and employers to tinker with goals and adjust strategies more often.
Continuous reviews are attractive to company leaders who think “if you develop your employees throughout the year, they’ll be more motivated and work harder in the long run,” Behera says. “And they’ll progress in their career faster. It’s a win-win.”
Rather than create obvious competition through employee rankings, continuous reviews may measure workers’ progress in achieving incremental, individualized goals they set for themselves with managers’ input. Employees tend to react better to reviews that judge them against their own past performances rather than against their peers, according to research from Columbia Business School published in 2018.
“Anything the managers can do to make people feel they’re being treated in a respectful and individualized way is going to be met with greater acceptance,” says study co-author Joel Brockner, Phillip Hettleman Professor of Business at Columbia Business School.
Just because these conversations may feel more casual than annual reviews doesn’t mean workers should take them less seriously. In a continual review system, every piece of feedback from the boss matters.
Why performance reviews matter
Beyond setting salaries, evaluations have other serious implications. They may be used as justification for firing employees or reveal a manager’s bias against an individual or group of workers.
Before a company lays off employees, its leaders have to decide which criteria to use to winnow the staff. They may use seniority, retaining those workers who have been with the company longest and firing those most recently hired. This method is objective and unlikely to result in claims of discrimination.
But leaders may prefer to keep their top performers instead, says Jonathan Segal, employment lawyer and partner at Duane Morris: “When you want to be leaner, you want your A players.” In that case, they may look through performance evaluation files to identify weaker workers to fire.
It’s important, then, to make sure you’re being evaluated fairly. Bias and favoritism can color performance reviews. Research shows they’re typically harsher on women than men and more likely to pass subjective judgment on women’s character and style instead of their performance, Segal says.
For example, a man’s performance review may say “his behavior is acerbic,” while a woman’s may say “she is acerbic,” leaving no room for change or improvement, Segal explains.
Seeking and responding to feedback
Even if you work for a company that uses continuous performance evaluations, you still may feel you’re not getting the feedback you need to succeed. If that’s the case, ask for it. After all, workers bear some responsibility for managing their own careers.
“If you’re not telling your manger your expectations, your manager can’t help you,” Bersin says. “Even if your manager is very traditional, they do tend to respect employees that speak up. It’s usually a sign of ambition and passion.”
Whether the evaluations you receive are positive or negative, your first response should be to offer thanks.
“We really have to look at feedback as a gift, framing it in our brain as the opportunity to improve,” says Greg Pryor, senior vice president, people and performance evangelist at Workday, which sells cloud applications for finance and human resource management.
If evaluation comments are negative or critical of your performance, keep the conversation productive by asking your manager, “What’s the one thing I can do to improve moving forward?” and requesting coaching to help you meet that goal, Pryor recommends.
Demonstrating a grateful and forward-thinking attitude in the face of critiques can turn the situation into a favorable one.
“If you are too sensitive to negative feedback, people will stop giving it to you, and that’s a worse situation to be in,” Tavis says. “You have to be open and have to show you welcome feedback of every nature because you are interested in your own growth.”
However, if you think you’re being evaluated unfairly, ask your manager to explain his or her rationale with concrete examples. Segal recommends this phrasing: “Could you explain to me what I have done or not done that led you to that conclusion?”
If the manager’s response doesn’t satisfy you, consider raising your concerns to that person’s supervisor.
“If two or three other people say the same thing, the manager’s manager will be more likely to take action on it,” Behera says.
If all else fails to resolve your concerns, Segal says, “employees always have the right to raise a legal issue,” especially if negative reviews seem to stem from discrimination.
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