3 Most Overlooked Performance Review Pitfalls

Businesses need a continuous performance management system, yet many leaders fail to take effective measures to make employee performance reviews successful.

32% of the employees at different companies wait over three months to get feedback from their leaders.

The state of performance appraisals is such that both the managers nor employees don’t understand the importance of performance management at their company. Their performance review methods are ineffective and disengaging.

Even if the leaders start implementing the new performance review framework, they don’t fully believe in it. Using modern performance appraisal tools and just updating progress on the software will not bring results. They have to develop a mindset that people must engage in continuous teamwork.

You must know what you are doing wrong and quickly fix those issues.

Three most ignored performance review pitfalls

1. Lack of more frequent feedback

People must realize that employee performance reviews should not be annual or biannual. The traditional review systems are ineffective, and people are becoming more aware of them with time. 

When you hand your employees a document that contains long-term yearly evaluations based on their memories and opinions about their work, it does not make much sense. The written feedback here is indirect, usually irrelevant, and not useful for people.

People feel the same; around 69% of the workers say they would make more effort in their work if the leaders recognized them through feedback.

The leaders must move from yearly feedback to ongoing conversations between everyone. People should get together more to discuss performance, and the team meetings must create an environment that encourages suggestions from each employee.

The future of employee reviews can look like the one described above. With the advancement in collaboration tools, remote employees can now coordinate with people while sitting thousands of miles apart. There are multifunctional performance management tools, and teams can do more on one platform, such as project management, real-time collaboration, other software integrations, etc.

Overall, the management should promote a more open work culture where employees don’t just follow commands and work in silos at their desks but take the initiative to give and request feedback.

2. Inaccurate reviews

The traditional review system does not give accurate insights into the workers’ performance, and many managers do not approach the evaluation correctly. The errors and inefficiencies in the evaluation could be voluntary or involuntary.

Here are some of the inaccuracies observed in poor performance reviews:

• Recency effect

In yearly evaluations, leaders are more likely to rate and give feedback based on the recent performance of workers.

• Proximity errors

A manager can work with several sheets simultaneously, so it’s not surprising to see similar feedback for two consecutive employees on the sheets.

• Contrast error

This happens when the management rates employees through comparison.

• Central tendency

This is the flaw in gauging people’s performance within a small range. This is not effective because high performers don’t get recognized here.

• Halo effect

This leads to a similar assessment of different individuals.

• Biases

This is a famous one. There are many names to it in the corporate world, and this one really demotivates high-performers and is bad for employee engagement.

• Vagueness

If the feedback someone receives does not deliver the message or idea behind it, it’s a waste.

• Surprise feedbacks

These are unexpected comments that people only get in the yearly or bi-yearly reviews. They surprise employees because the management does not talk about them until the reviews happen.

Many of these mistakes and bad habits can be avoided by talking to your people often. Your organization will take time to adopt real-time and two-way communication, but once your people start to get the hang of it, they will appreciate the feedback and request feedback from the management.

3. Poor psychological safety

For a long, performance reviews have been a one-way thing. People would hope they get okay reviews but found the evaluations scary.

In many organizations, fear of management and lack of freedom to raise their opinions are still prevalent. Today, the scenario is such that employee either accept their performance evaluation or just quit.

Psychological safety at work is the smooth flow of two-way communication. Ideas don’t just flow from top-down but also in reverse. Despite the rise in psychological safety at many organizations, individuals still hold back ideas and questions. 

If you want your employees to perform better, you need to change your approach toward performance evaluation. You need to make it more continuous and timely. Effective execution of a plan requires the team to collaborate actively and often ask for feedback from their leaders and peers.

Psychological safety at work also reduces stress, burnout, and poor mental health. People feel engaged when they openly communicate with their team, enhancing their productivity. 

You must start the practice if your organization is new to this open communication and feedback system.

 FAQs

1. Which performance appraisal method is best?

The most effective performance appraisal is the one that results in happier employees. Here are some performance appraisal methods that people find effective in engaging employees.

• Continuous Performance Review – Goals-based ongoing evaluation.
• (BARS) Behaviourally Anchored Rating Scale – Combination of the traditional review system and newer rating scale.
• 360 Feedback – It’s time-consuming but pretty holistic and one of the fairest.
• Critical Incident – Based on specific events

2. How to review your performance?

Employees have been writing yearly reviews about their work performance for many years. They usually fill out sections about their job role, abilities, goals, opportunities, new projects, etc.

A usual self-appraisal document includes the following:

• Positive attributes and your abilities
• Achievements and contributions
• Mistakes
• Growth opportunities 

3. How to take negative performance reviews?

It’s best to give and request constructive feedback at work, but you should not react abruptly if the manager decides to criticize. Here are some tips for dealing with negative feedback effectively.

• Don’t take it personally.
• Listen carefully
• Ask questions and get better insights
• Try to know the bigger picture.
• Move on