Pain-Free Performance Reviews? Possible. Here are 5 Tips for Getting There. The "annual" performance review system is broken. And fixing the system won't be easy. But start with more frequent, less critical feedback.

By David Niu

Opinions expressed by Entrepreneur contributors are their own.


Let's face it: Everyone, employees and managers, dreads performance reviews. The tired ritual of sitting down for an hour once a year is uncomfortable and unproductive. No wonder companies like General Electric and Adobe are redefining how they approach feedback.

Related: Employee Reviews Should Include the CEO

So, what exactly is going wrong? A TINYpulse survey of employees and managers found that performance reviews are simply too time-consuming. To combat this, managers tend to focus only on what's happened recently, rather than taking a holistic look at performance.

Their feedback then looks at past missteps instead of coaching employees on how to improve in the future. Other problems persist, from a lack of follow-up on criticism to a perception of manager bias.

Improving performance reviews is critical for maintaining a healthy organizational culture. Refocusing the process on praising good work and identifying specific, measurable areas for improvement is essential for growth. Here are five tips on how to transform your performance review system.

1. Make them more frequent.

The single biggest problem with performance reviews is that they typically occur once a year, thereby attempting to tackle too much at one time. This encourages managers to focus on recent performance instead of evaluating what happened during the entire year. Eleven months of excellent work can be seemingly erased with a single off month.

This might be why Globoforce found that 51 percent of employees surveyed said they believed performance reviews are inaccurate.

The lack of frequency also makes the process more stressful. It feels like a formal event designed to illuminate the employee's every flaw. Instead, more, regular reviews can incorporate feedback into everyday activity. Consider moving to a system with short, focused reviews occurring at least weekly. They'll also allow managers to evaluate recent events that are fresh in their memory.

2. Strive to be objective.

According to our research, 10 percent of employees and 17 percent of managers surveyed believe that manager bias is the most significant problem with performance reviews. So, structure performance reviews around specific, measurable metrics. The more you can tie a review to data, the better, whether the focus is sales figures, website hits or recruited clients.

This makes the process less about personality and counteracts any potential accusations of bias.

Related: 4 Ways to Avoid the Worthless Annual Performance Review and Give Valuable Feedback

Avoid making statements, like, "Laura is a team player" without having evidence to support them. Come to the review with examples of how Laura is a team player and how that quality increases productivity. Consider using peer reviews, as well. This is an easy way to see if your perspective on an employee is not an outlier and to discover contributions you might not have otherwise noticed.

3. Be balanced.

Most managers stray one way or the other. It's easy for them to give only praise or only criticism. Unfortunately, both are ineffective. Managers who shy away from offering criticism fail to challenge their employees to grow. Employees may feel that their work doesn't matter -- the manager will always dish out praise, even if they screw up.

On the other hand, managers who offer a litany of complaints are unlikely to succeed as well. A Glassdoor survey found that 81 percent of participating employees said they're more likely to work hard if they receive praise.

That's no surprise: Constant criticism is likely to make employees feel defeated. Instead, a performance review that focuses on praise and contains a couple of well-defined criticisms will help you achieve a balance.

4. Be goal-oriented.

Any criticism should be offered in the spirit of improvement. Scolding an employee for past performance or trying to "build a case" against an employee you plan to terminate isn't productive. When offering constructive criticism, ask the employee a series of questions instead of telling him or her what went wrong and what could be done differently. This way, the employee won't feel threatened and will be more likely to improve their performance.

Use as many specific, concrete examples as possible to illustrate every point. Work with the employee to devise a plan on how to improve aspects of his or her performance, then check in later to see if the plan is working. Think of your role as that of a coach or mentor. You're providing guidance for employees for long-term improvement. This is especially important for new employees or internal hires adapting to new roles.

5. Be predictable.

Nobody wants to be surprised in a performance review. If you've set clear expectations for employees, they won't be surprised when you sit down for a conversation. Another way to avoid surprises is to set a brief agenda ahead of time. Using a tool that provides instantaneous feedback is also a good option. Regular, targeted, brief feedback gives employees an up-to-the-minute picture of how they're doing.

Related: The 5 Must-Use Steps to Successfully Conduct a Performance Review With Employees

The takeaway? The annual performance review system is broken. And fixing the system isn't easy: We're still learning about how to best approach performance reviews.

One thing we're learning is that the process needn't be as excruciating as a trip to the dentist's office. We know, for instance, that frequent, objective feedback is better for both managers and employees. By focusing on praising employees for good work and coaching them in needed areas of improvement, you can transform the process into an opportunity to build stronger relationships with employees.

Wavy Line
David Niu

CEO of TINYpulse

David Niu is a Seattle-based serial entrepreneur and founder of TINYpulse. Previously, he was co-founder of BuddyTV and NetConversions. He is the author of "Careercation: Trading Briefcase For Suitcase to Find Entrepreneurial Happiness."

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