We’ve already talked about what a high performance culture is and the importance of conducting performance reviews. We also shared some of the benefits that this type of review system brings to the company. These include achieving a lower turnover rate, creating open channels for communication and feedback, measuring the progress of the company and its employees, and increasing productivity, to name a few.
To continue in the same line, we want to tell you about the best practices and common mistakes to avoid in a performance review. And yes, all companies have a very unique and special way of measuring their employees’ performance. To give you an idea, there are up to 14 types of performance reviews that can be combined with each other. But there are certain things that can bring you closer to obtaining more accurate information that you can act on to help you design a strategy that leads to further growth.
Performance reviews are a very useful tool to identify the progress made by employees during a certain period of time. To do this, it is very important to understand the current state of your company, the organizational structure and the number of employees. It is also crucial to know the most recent facts and events that have happened in the workplace and those that impact the company. As well as to understand the different groups that “coexist” within your company.
Most common mistakes to avoid in a performance review
To find those best practices, we must first understand what those common mistakes are that you need to avoid. This way we can conduct performance reviews that are truly valuable to employees, the People & HR team and the company as a whole.
Only doing a yearly performance review
The first and most common mistake is to think that only one performance review per year should be done. Although it may not seem like it, evaluations should have a higher frequency because otherwise you could be losing sight of valuable information for the business and making it difficult for the proposed efforts to be really adjusted to the current requirements.
Solution: Our recommendation is that you identify the periodicity that best suits your company. Whether it is every 3, 4 or 6 months, whichever you think is best. But it is important that you have enough data so that you can monitor the evolution of the results and generate strategies adapted to the present reality.
Using the same criteria for all areas
Also at the top of the most common mistakes is the false belief that all areas and roles can be measured under the same criteria. This means that the definition of competencies to be measured are the same regardless of whether you work as a development area manager or as a sales consultant.
Solution: Of course, we know that there are certain competencies that are transversal to any position within the organization. But one tactic that can help you obtain more reliable results is to define the competencies that need to be evaluated according to the area to which each employee belongs and the level of the position.
Just using numerical scales
Another very common mistake in the design of a performance evaluation is to use only numerical scales to evaluate. The problem here is that not everyone understands the same thing as a 7 on a scale of 1 to 10, for example. If for someone a 7 is a rating within the normal average, for someone else it may be a very good rating.
Solution: A foolproof solution for this type of error is to supplement the evaluations with open-ended questions. In this way, the people giving the evaluation can express in their own words what the ratings they have given about the employee in question mean to them.
Not informing the team about the benefits
Perhaps one of the most serious and at the same time most repeated mistakes is to launch a performance review without informing the team about the benefits of these evaluations. There is a great stigma surrounding this type of measurement method. It is mistakenly believed that they are only used for dismissals, although performance reviews bring with them many benefits such as promoting communication spaces, recognition of achievements and even promotion opportunities.
Solution: Here it is important to ensure that there is a good communication plan in place prior to the launch. You should also create awareness among members and make them aware of the advantages they will gain by participating in this type of process, as well as the value of continuing to build the future of the company together.
Doing performance reviews manually
Doing performance reviews manually is, without a doubt, a mistake you can’t afford to make. Not having a system that makes it easy for you to carry out this process from start to finish is frightening. The amount of enormous hours it consumes could be invested in actions that really add value.
Solution: Lean on tools like Nailted’s performance reviews and checks-ins. In a couple of clicks you can set up and run all the evaluations you need. You don’t even have to worry about reporting for each person, we do it for you!
Not involving managers
Not involving managers is another fairly common mistake. This makes it even more difficult to get the information to the rest of the employees. This hinders the natural flow of performance evaluations and also generates a little more resistance to the implementation of this type of process.
Solution: Involve managers as strategic allies from the beginning of the performance review campaign. Let them know why it is so important that they actively participate in the process and what is expected of them during it.
Not being clear with feedback
Lack of clarity in the delivery of feedback and next steps is an omission that can negatively impact the entire performance review process. This is because people are very interested in knowing what their results have been and how they have been evaluated by their colleagues.
Solution: Define from the very beginning the criteria for delivering feedback and what the next steps will be. This way the process will go much more smoothly and everyone involved in it will have visibility on how it works from the beginning.
Having understood the most common mistakes and what to look out for, here are the best practices that should definitely be present in your next performance review.
Performance review best practices
Involve as many people as possible
Involve as many people as possible in the performance review. The more people you involve in performance reviews, the more accurate the data you get.
Investigate the competition
Find out how your competitors celebrate performance reviews. Discover what they measure, how often they test, and who participates. This will allow you to define what is best for your company in order to remain competitive. In addition to keeping your team “in the loop” on what the “conditions of the game” are.
Communicate, communicate and communicate
This is and will always be your best ally for performance reviews to be successful and add value. This applies both to carry out HR tasks and to increase employee engagement and productivity.
Create spaces for conversation
Create spaces for conversation after sending the results to the team. Make sure managers have subsequent conversations with each of their reports. This makes it possible to complete the cycle, leading to the creation of action plans and definition of next steps. This practice will ensure that performance reviews are useful to everyone in the company.
Use other processes
Select your template and type of assessment
Select the most appropriate performance review template and type of assessment for each case and situation. Remember that as a People & HR team, you will always know what is best suited to your company and its employees.
Knowing the most common mistakes and best practices in the field of performance reviews, now is the time to launch your next performance review with Nailted. Book a demo with one of our People & Culture experts and try it yourself!