Pillars of Performance Reviews

Jim Holincheck, on his blog (http://blogerp.typepad.com/hcm_research/), offers up three pillars on which to build successful employee performance appraisals that deliver key information for developing an organization’s workforce:

• Garbage In = Garbage Out – An organization can have the best performance system in the world, but if it does not set SMART (Specific, Measurable, Actionable, Realistic, Time-based) goals, it cannot guarantee accountability. If it does not have the right competencies identified, then the best assessment technology will not help identify the appropriate developmental opportunities. For goals to be relevant they must also be properly aligned with the larger strategic goals of the organization.

• Begin With the End in Mind – It is essential to know exactly what an organization wishes to accomplish using employee evaluations. The type of conversation an organization wishes to facilitate between supervisor and employee helps to define this. Does the organization wish to focus on development? Does it want to focus on motivation? Does it want to focus on career development? Does it just want to make sure that everyone gets a performance review? Does it want to do all of the above? Not making this decision or failing to set a clear objective from the start is usually the culprit when the process fails. Most organizations do not give enough thought to what they want to get out of the process and how it can best facilitate appraisal conversations to achieve its goals.

• Performance Reviews May Be An Annual Process, But Performance Management Should Happen All the Time – Perhaps the most important factor raised by Holincheck is that in most organizations performance reviews are just an annual administrative exercise. They are not connected or aligned with much outside of the review. The process is seen by employees as unfair and far from transparent or objective. The process is often not even connected to compensation in any real way. Good managers should not allow performance evaluations to be an isolated event; instead they should ensure that there is open communication with employees on an on-going basis about their performance and development.

While these are certainly important principals to keep in mind when setting up and implementing any employee performance management system, they do not make up an exhaustive list. What other principals are vital to keep in mind?