Performance reviews valued by employees: Poll

But do they drive improvement?
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 12/20/2011

Groans often fill the office air this time of year, when many performance reviews are conducted. The standard thinking is managers and employees alike resent the time and effort required to assess their contributions, both good and bad, to the organization.

So it may come as a surprise many employees actually appreciate the process. Seventy-one per cent of 800 respondents to a Ceridian Canada survey said their review made them feel valued while 91 per cent felt the process either met (79 per cent) or exceeded (12 per cent) their expectations.

“I was quite surprised by the results,” said John Cardella, executive vice-president and chief people officer at Ceridian Canada in Toronto. “As an HR exec, you sometimes wonder about the linkage between doing a performance review and how it makes people feel and whether or not it’s really all worth it… because (the reviews) are a lot of effort and it takes a lot of care to do it properly.”

The primary rationale around performance reviews is to align everybody’s efforts with the efforts of organizations so they can be profitable and grow and continue to succeed, he said.

“Performance reviews, and having people know what the goals are, are essential,” he said. “It allows the organization to, essentially, acknowledge the effort an employee has been putting forward for the year and, in many organizations, recognition may not be their strong suit so it provides a channel for them to know where they stand.”

The performance reviews present a special opportunity for
employees, according to Sandra Reder, president and founder of Vertical Bridge in Vancouver, consultants in employee attraction and retention strategies.

“It’s that one time where they know they have the undivided attention of their manager or boss, they can actually have an exchange that’s uninterrupted… so people feel incredibly valued.”

But feeling valued is not the purpose of the review, according to Joseph Grenny, Salt Lake City-based co-founder of VitalSmarts, an organization focused on corporate training and organizational performance.

“The purpose of this (review process) was not for people to feel hunky dory, it was for them to feel more engaged and to feel like they’re able to make a better contribution to the organization,” he said.

“The real question is, ‘Is it accomplishing what it’s supposed to do?’ If it’s not driving performance improvement in organizations, then it’s worthless. In fact, it’s worse than worthless if it’s pernicious because it’s consuming resources and it’s distracting time and attention.”

Almost two-thirds (64 per cent) of respondents also felt they were given valuable feedback during the reviews, found Ceridian’s Pulse of Talent survey. But these results contrast with a VitalSmarts study in early 2011 that found 70 per cent of employees in the United States who had a performance review didn’t know what it meant or what exactly was expected for improvement, said Grenny.

Employers might be getting better at holding reviews but there’s not a lot of evidence the process is producing results, he said. And often managers sugarcoat the truth, focusing on helping employees feel good rather than doing better.

“A small minority of managers say that they’re able to really candidly address performance concerns in a performance review. What (most) do is understate them substantially in hopes the person will get the hint,” said Grenny.

Forensic Technology goes online, abandons ratings

Waiting one full year to receive feedback on performance is ridiculous, according to Elisabeth Lecavalier, vice-president of HR at Forensic Technology in Montreal. Employers need to ensure managers have the mechanisms, budget and skills to give employees feedback all year long, she said. Forensic, which has 220 employees worldwide and 150 in Canada, has a performance management process closely tied to its business plan.

“We’re a small global company and quite lean, we don’t have a lot of fat, which means managing performance is critical to us,” said Lecavalier.

Recently, the company moved to an online platform, emPerform, that helps keep track of objectives. There are mid-year reviews between managers and employees and managers can send employees messages throughout the year, such as “You’re on track” or “You met my expectations” by clicking on a button.

“We’re high-tech so we change, things are very dynamic… so this enables us to make adjustments,” said Lecavalier. “And the employees are thirsty for feedback, they really appreciate, whether it’s good news or bad news, they need to know whether they’re on track,”

As part of the change, Forensic Technology no longer gives employees performance scores or ratings as part of their review. That approach was really detrimental, she said, so now the rating is only used for compensation purposes.

“We’ve tried to remove that line of sight from our employees because the one thing we found is that even when you’ve got a very good manager providing great feedback, the employee wants to know, ‘OK, so how did I do?’ Literally, when we had our all paper-based system, they used to flip to the last page to see where ‘X’ marked the box. And then... the dialogue with the manager was just lost.”

Ceridian has seen some companies taking that approach as ratings can be a cause for conflict, said Cardella.

“If you’re going to use ratings, it’s best to define what those ratings mean as well,” he said. “That’s where a truly good manager that’s well-trained and understands how to properly calibrate the ratings will talk that through and reach agreement and not have, for instance, the actual rating become the determining factor in the review.”

Tying reviews to compensation is very much an old school mentality, said Reder. The problem is people don’t care, they just want to hear if they did well or badly and how much money they will be paid.

“A lot of companies, especially with the recession over the last two or three years, they haven’t been able to give increases but you can’t stop doing reviews… so a lot of organizations have sort of pulled away from tying the two together.”

Career paths need improvement

However, one area in need of improvement concerns future plans, according to the Ceridian survey, as 56 per cent of respondents said performance reviews provide a clear career path for the future. There’s always work to be done in that area, said Cardella.

“There has to be meaningful dialogue between the manager and employee to talk about what the employee’s career aspirations are,” he said.

People need an incentive to improve their performance, said Grenny.

“The primary motivation the individual has to address some of those concerns is it’s going to enhance their career in the future.”

While managers may be limited in terms of formally talking about positions opening up, “creative managers know how to use a variety of ways to give people more autonomy, to give people more responsibilities, to give them professional development experiences, so there really are ways managers can offer those sorts of resources, even without incremental costs to the organization,” he said.

Progressive companies can provide other opportunities than the hierarchal approach, such as offering interesting projects, said Reder.

“People want to have a say, they want to feel like they’re making a difference so (it’s about) a performance review that hears them, says, ‘We’re interested in you as more than just what you’re doing today for us, how can we help you grow your career, what do you want to do?’”

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