Eliminate Employee Performance Reviews

 

Performance reviews typically consist of a form whereby the supervisor rates the employee on various criteria based on their performance and provides feedback. In most companies, performance reviews are held quarterly or annually, but is the leadership in those companies really getting the bang for their buck? These activities require significant time and paper-pushing; supervisors typically spend at least an hour prepping for each review and the review itself takes at least an hour or two. If you ask employees and supervisors for feedback on the traditional performance review, you are likely to hear that many are anxious leading up to reviews or find no value in the rating systems companies devise to help supervisors provide feedback on performance. In many cases, the rating systems may lead to demotivation. Is there a better way?

NuWaves eliminates performance reviews to focus on a tailored approach to feedback and employee development, thereby increasing employee contributions and decreasing NuWaves’ cost.

Yes – let’s get rid of the documentation and focus on the feedback. The value for most employees who strive to develop themselves is in the feedback – not the rating systems or documentation. One path to eliminating performance reviews and the associated non-value added costs is to put the onus on the employee. Supervisors can instruct their direct reports to set up regular meetings with them based on the amount of feedback, coaching, and career development they desire. In these sessions, the supervisor and the employee should discuss the work, accountability to and improvement of the processes, training or development needs, and how to create a win-win for both the company and the employee. This creates an individualized development plan for each employee by putting them in the driver’s seat. Performance issues can be addressed much quicker with the ongoing dialogue and there is no need to prepare documentation for HR purposes. This employee-driven process of creating an individualized rhythm for soliciting feedback and discussing the work is the key ingredient to successfully eliminating performance reviews. If you are a supervisor, make sure you make time for your employees to get the valuable feedback they deserve. For those employees who don’t wish to engage in the process on their own terms, the supervisor is still responsible for providing the feedback needed to produce results. Overall, the supervisor should spend 80% of their time developing those who willingly engage in the process and seek opportunities to add value and 20% managing those who are disengaged with the process.

Don’t worry about documentation until you have to. If you have a chronic underperformer or an employee whose behaviors do not fit the company culture, put them on a Performance Improvement Plan with specific objectives and a timeline for achieving these objectives. If the company and employee choose to part ways, you still have documentation to support this decision and protect the company.

In many companies, compensation and raises are tied to performance review scores, so you may be wondering what criteria you will use to compensate employees. One avenue is to base pay on the following factors: the company budget, employee tenure, market value, and value the employee provides to the organization. How you choose to weight these factors is up to you. These will of course be influenced by industry and environmental factors.

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