The Importance of Delivering Difficult Performance Reviews

Giving employees poor performance reviews can be one the hardest tasks a line manager has to perform. Empathizing about the consequences for the individual and the impact on short-term deliverables in the department is always of concern. As a result most line managers shy away from having the necessary ‘you-have-to-pull-up-your-socks’ performance discussion. The consequences of avoiding a difficult performance review talk are significant, including:

• The performance of the individual not improving.
• Causing  confusion for the employee since they won’t know why they’re not growing within the company.
• Creating a situation where other team members assume they can get away with under-performing.
• Loss of respect for the line manager due to  the perception that they’re not doing their job.
• Overall decline of the team’s performance.

As a result, the performance of the line manager will come into question.

Holding People Accountable

Research has shown that as long as certain criteria are met, holding people accountable and having tough performance conversations don’t necessarily have a negative impact on the engagement levels of a department. One of my own clients, a major corporation in the Middle East has identified 5 components of the performance management process – which if executed well have a huge impact on engagement levels and the perceived fairness of the end result. The components are:

1. Set goals early in the year
2. Have goals which are aligned with organisational objectives
3. An effective development plan
4. A mid-year review with employees and managers to adjust goals and receive feedback
5. An effective year-end performance discussion

They found that with the effective implementation of the above components, employees have 9 times more engagement. Not only did it have a huge impact on engagement levels, it also created a significant impact on the perceived fairness of the performance review. 80% of employees who were rated at the lowest performance grade said that their performance review was a fair reflection of their actions. Only 10% of employees, with line manager who did not follow the above 5 elements stated the same. That’s an incredible difference of 800%. The company called it the ‘Perfect Storm’ of performance management.

Company vs. Employee Performance

Another client recently shared the results of their annual engagement survey in which they compared the engagement levels of the whole company with the engagement levels of employees who were informed that they were under-performing and for whom the company had drafted Performance Improvement Plans (PIP). The objective behind the PIP was to help employees improve their performance and if they weren’t able to do so over a period of time to exit from the company. The results were amazing. The engagement levels of employees who were under PIP was only 7% lower than the rest of the company. When asked why this was the case they mentioned that it was due to two reasons. One, a fair and equitable process that employees and line managers understood, appreciated and adhered to and two, the maturity of the line managers to be able to:

• Address relevant performance issues
• Clarify what was expected from team members
• Empathize and be fair with employees
• Take ownership of the performance of people

The success of a performance reviews is based on being able to do them well. Half-baked processes and conversations are worse than not doing them at all. How was your experience of performance reviews from last year – what changes would you like your organization to make?