It is not uncommon for organizations to ask us for a template performance review form. While a standard form might be a quick fix, it is generally not the best fix. Like many things, you need a solid foundation to manage performance well and that means starting with your performance management philosophy rather than first selecting a performance review form or developing the performance management process.
A well-designed performance management process can motivate employees to achieve organizational goals, and add value to the organization. The checklist below can help guide the development of an effective performance management process.
- Performance Philosophy
- Performance Forms and Processes
- Performance Reviews
Performance Philosophy
Before updating your performance management process based on trends or what has worked well for another organization, we encourage HR and leadership to take into account the following considerations:
- Identify the actual purpose of performance management to your organization. Why do you do it? Below are some examples:
- Provide data to make/explain compensation decisions
- Recognize past performance
- Motivate higher performance
- Legal compliance
- Document poor performance
- Identify training needs
- Develop a performance rating scale that makes sense to your organization. A rating scale of 5 or fewer ratings that are clearly defined will set the tone for consistency in use across the organization.
- Select competencies/behaviors that align with organizational values to drive performance toward the mission and vision of the organization. Does it make sense to have all shared competencies across the organization, unique competencies for each job, or a combination of those options?
- Clearly communicate the organization’s performance management philosophy. Train managers and employees on the performance management philosophy, the importance of performance management to the organization, and how to properly conduct performance reviews.
Performance Forms and Process
To make the performance review process meaningful to all stakeholders, the forms should be built with the end in mind. It is a best practice to use the philosophy identified in the steps above to create a meaningful form and process.
What works for the cooperative down the road may not work with your business model.
Review the following best practices when updating the forms and process.
- The form includes areas to evaluate what is accomplished (goals/results) and how it is accomplished (behaviors/competencies). Competencies are based on the philosophy identified above.
- Goals are objective, measurable, realistic, formally documented and agreed to by both supervisor and employee at the beginning of the performance cycle. Consider the behaviors each goal will motivate for employees to ensure alignment with the philosophy.
- Employees have up to five goals that clearly identify the level of performance required for each rating. More than five annual goals often leads to confusion of priorities rather than higher performance. Focus on what matters and drive to those results.
- The performance management process includes a self-evaluation step where employees rate and provide comments on each performance goal and competency.
- Annual performance reviews are signed by the employee, manager, and a second-level reviewer. Forms are saved according to the organization’s retention policy.
- The Board of Directors has established performance standards and a process to evaluate the CEO’s performance. This process ensures the CEO and management carry out the organization’s mission, vision and business plan.
Performance Reviews
Once the forms are finalized, then comes the communications strategy. Follow the steps below to ensure all parties are informed and ready when it comes time for performance reviews.
- Communicate expectations with managers and employees regarding their role in performance reviews and timing of each step.
- Train managers on how to implement effective goal setting, provide meaningful feedback, clearly document performance (positive and negative), and communicate performance review messages that drive performance.
- Create structure and expectation for managers to provide regular, ongoing feedback (both positive and constructive) on performance and goal achievement.
- Encourage managers and employees to prepare for performance reviews in advance and take time to provide thoughtful and meaningful data into the process.
Summary
When organizations create a performance management process that is built on a solid philosophy, employees and managers see the value of the process. When the purpose and value of the process is clear, both managers and employees support the process, resulting in a positive experience for all parties.
Foundations Consulting offers a variety of solutions to maximize performance at all levels of the organization. Contact us for more information on setting or re-establishing a performance management strategy, developing an effective format, creating and implementing a communication strategy, or training leaders and individual contributors.
