Want To Be A Winner? Upgrade Your Performance Review System Now

Talent leaving their organizations has become one of the biggest challenges today. In the US alone, 42 million employees quit in 2019, which is only bound to increase. (Retention Report, Work Institute, 2020)

This is an even bigger challenge for startups. As employees are one of the most significant assets for the organization, it requires a lot of time and money to replace the employees, and at the end of the day, time is money, and hence, businesses cannot afford to spend the majority of their time in replacing their employees. 

Source: Freepik

There are multiple reasons why employees can leave their organization. However, one of the main reasons for it is organizations using an outdated performance review system, and as a result, employees are not satisfied with how their organization reviews their performance. 

Even though it sounds like changing the performance review system needs huge effort and time, adopting a more agile performance management approach isn’t a tough nut to crack anymore. 

What are the roadblocks to successful performance management?

Let’s not go for long into the problems. Here is a list of possible problems you may face in managing performance well:

• Irrelevant metrics and criteria
• Not using goals to align the team with organizational objectives.
• Ineffective communication and feedback system
• Not leveraging feedback and allowing employees to grow
• Lack of regularity and adoption of fair practices in the work culture
• Non-transparent practices and metrics
• Lack of employee and leader engagement

Six practices to make performance review system effective

Before implementing effective performance management practices among your team, take a company-wide survey.

Know what your team feels about the current state of the performance review system and ask them what changes can bring about improvement in it.

1. Using a cloud-based tool and automation,

Organizations moved entirely online during the Covid-19 pandemic. Some of that remote working stayed with the companies, and why not? 

Workers are adopting SaaS applications fast. A SaaS adoption survey mentioned that one to two-year-old companies use 29 SaaS apps, while three to six-year-old organizations use 103 apps on average.

Here’s why you need a cloud-based performance management tool:

• Make team alignment easier and more effective by providing OKR software accessible to everyone.
• To make performance reviews easier with metrics and automatic reports.
• Nudges and notifications so that employees don’t forget to check in and update progress
• Instant and continuous two-way feedback for active collaboration and team alignment.
• Transparency in employee achievements.
• Enhanced productivity due to mobile access and use of multi-functional software to do more on one platform.

2. Align everyone’s objectives with the company goals

Using OKRs (Objectives and key results) to drive teams and organizations can bring great business success. 

You can connect each team member’s OKRs to the common objectives of the company. This creates an alignment between everyone toward shared business goals.

How is it related to performance management?

• OKRs can be measured, and they can help you review employee performance.
• Team members’ OKR progress is used for real-time reviews. The team can immediately address issues in meetings or check-ins.
• This makes the review process more relevant and focused, as everyone is aligned toward the same goals. It’s simpler as everyone gets on the same page.
• Fair reviews. Using the OKR software means everything in it is pretty transparent and fair. 

3. Transparent processes and metrics

You know, transparency is rare in the business world. But it’s important to note that big success is rare too.

You make performance reviews transparent by bringing your team together on the same platform. For example, a team using OKR management software.

Everyone’s progress on the OKRs is displayed clearly on the platform. It includes metrics like the percentage of achievement and rating on individual OKRs.

Anytime you log in to the platform, you can see the top or bottom performers.

It removes any management biases as the managers, too, own their set of OKRs.

4. Make continuous feedback a habit

A more active approach towards collaboration reduces time-taking management work such as micromanagement.

How do continuous feedback and communication help here?

• Active collaboration tends to make teams more independent, and they are more likely to engage.
• Performance reviews have become simpler and faster. Managers can see the progress anytime on the software platform.
• Fairer employee recognition. The team is collectively responsible for the goal achievements. Regular communication and transparency mean immediate and open recognition.

With constant feedback, teams can immediately address important issues, fix alignment issues, and focus on priorities.

5. Outcomes-based reviews and appraisals

With this approach, you measure the performance of each employee with their OKRs achievements.

This practice has multiple team benefits apart from the employee review, such as team alignment and constant improvement with ongoing feedback.

OKRs are set for each quarter, and you should review workers’ performance at the end of each quarter. This method is quite transparent, and anyone can see anyone’s progress at any time.

Employees tend to be more accountable in this case. As they all own OKRs and there is healthy competition among the team.

Overall, it’s about appraisals based on measurable employee performance.

6. Provide sufficient growth opportunities for employees.

Do your teams have the capability to achieve their respective OKRs?

Individual OKRs enable team members to take responsibility for their efforts to achieve them. With regular check-ins and performance reviews, leaders should identify the gaps in skills and required actions.

If performance reviews are effective, they should make employees aware of their lacking. Then it’s your responsibility to let them get educated and trained. 

The training can include both soft and hard skills. Rightly trained employees not only grow themselves but also achieve important company OKRs.

Take an organization survey or get direct feedback on what training programs to include.

Do you want to upgrade your organization’s performance review system or need more insights? Get in touch with us today!