Better Performance Reviews – One Company’s Values Driven Approach

Uncomfortable. Subjective. Ineffective.

Better Performance Reviews

If your organization wishes to compare employees in an objective manner and looks to the company values for guidance, you’ll be delighted to know better performance reviews are on the horizon. In fact, they’re right here.

Recently, I had the opportunity to work with a company who wanted a fair way to share a bonus pool, but they needed a way to do better performance reviews and score each employee fairly.

Now, I generally recommend avoiding scales to measure people. Most managers know who’s working out well, and who’s not.  You don’t need a number to tell you who’s strong and who’s your weakest link. Besides, from the employee’s perspective, to have all of your hard work summarized on a scale of 1-5 can be demeaning.

So the task at hand – creating a better performance review system – intrigued me. I mean, just how do you measure people in a way that’s meaningful, fair and supports the values of the organization?  So, we shut ourselves in a meeting room for the day and got to work. And, after eight hours of think tanking with the leadership team, something magical happened. 

We created a better performance review.  

How’d we do it? We kept track of the following list throughout our meeting and then incorporated them into the final review. We came up with these 11 items:

1. To keep the revised performance review short and simple.
2. To have two main areas of evaluation: demonstration of values and performance within the position.
3. The values portion of the form would remain the same for all employees.
4. The performance portion of the form would vary due to the different skills/capacity/knowledge and expectations of each position.
5. Some criteria held more weight than others.
6. The values rating made up 60% of the total score for an employee.
7. The performance rating made up 40%. This accurately reflected how important the company views values in their organization.
8. They created tangible examples of excellence for each category.
9. They made s simple scale of 0-3. Exemplary = 3, Meeting Expectations = 2, Needs Improvement = 1, Unacceptable = 0.
10. Two additional areas of evaluation also figured into the review: “Attendance” in which an employee could only receive negative points and “Additional Contribution” in which an employee could only receive “bonus” points for going above and beyond.
11. They deliberately chose not to have an employee’s years of service play a role in scoring.

Better Performance Reviews Tested and Approved

Once the new system rolled off the printing press, we tested the scoring matrix. I was amazed to see how in alignment the gut sense of the leadership team was to an employee’s ranking – especially as compared to other employees.

And here’s the kicker, the employees loved the performance review! 

They felt like they received clear and fair feedback.  They understood why they scored a 2 instead of a 3. They understood what they needed to do in the future to score a 3.   And company leadership wove the company’s values into the sharing of the bonus pool, demonstrating there were real teeth and real dollars behind their commitment to the organization’s values.

Of course, there are many other performance review methods out there. (In fact, I love the Duo-Review. You should check it out.)

But, there is a time and place when it an objective measurement benefits both the company and the employee.

By the way, if you’re looking for other tips on building employee happiness and improving company culture, click on over to our Culture Tips articles.