Webinar: Inside Look | Performance Evaluations

This session was recorded on October 21, 2021.

Presentation Slide Deck


When done well, performance evaluations provide employees with actionable feedback, clear expectations for performance going forward, and goals for the next year. Evaluations also give employers the documentation they need to justify pay adjustments or other employment decisions.

In this session, Marisa Stribling from Mineral, our HR Partner, shares common elements of a performance evaluation, which type of evaluations may be a good choice for your workplace, and best practices for conducting performance meetings.

Session Transcript:

Marisa (00:08):

Hello everyone, and thank you so much for joining me today. I am excited to welcome you to our training Inside Look: Performance Evaluations. Before we begin, I would like to introduce myself. My name’s Marisa. I have worked in a variety of HR areas, including payroll, staffing, and on and off boarding. I earned my bachelor’s in business administration and communications from the University of Oregon. I’ve worked at both national and local companies and in a wide range of businesses and industries. All right. So some quick housekeeping items. We will email you the recording of this presentation and the slides within 24 hours. I will hold a poll later on in the middle of the presentation here, so I hope you will participate in it. So stay tuned for that. And finally, please use the Q&A box for any questions and I’ll answer as many as I can during our brief Q&A session at the end.

Marisa (01:08):

So let’s chat briefly about our agenda for the next half hour. So I will start by setting the stage a bit, explaining what a performance evaluation really is and why we do them. Then we’ll talk more at length about the pieces to consider for a performance evaluation and what goes into creating one. We’ll look a little more closely at the best ways to conduct the actual meeting and things to remember once it’s over. And then finally, as I mentioned, I’ll leave a couple of minutes at the end for any questions that you might have. I hope that by the end of the session you’ll have a better understanding of when this tool is most valuable and how you can use them effectively in your workplace.

Marisa (01:48):

All right, so what is a performance evaluation? Well, the performance evaluation is part of the overall performance management process. One definition of performance evaluation is the process of reviewing how well employees perform their duties during a specified period of time. Often done annually, it will document the employee’s performance goals and objectives, as well as their development goals, assess performance for the prior review period and set objectives for the period going forward. And if you’ve been using coaching on a regular basis, there should be no surprises when it comes to performance evaluation time. So while this session is focused on performance evaluations, I did want to briefly touch on coaching, which I just mentioned a moment ago, because it’s absolutely a related topic and it’s really important to keep in mind.

Marisa (02:43):

Coaching is sometimes used as a generic term about giving employees performance feedback, and often when things aren’t going well. However, for the purposes of our conversation today, when we talk about coaching, I’m talking about a management style, one that encourages employee development and growth. So here we won’t be talking about coaching as progressive discipline or as the ongoing performance management process, but really as that management style. While will get in to a lot more detail about this later on, the purpose of a performance evaluation process is to align individual employee goals with departmental and company goals. Performance evaluations provide feedback and set clear expectations for an employee. A well-structured performance review process will link what an employee is doing on a day-to-day basis with the company strategy and also document the employee’s performance to justify compensation decisions. So the key point here is that performance management is an ongoing process and feedback shouldn’t just happen at the formal review time.

Marisa (03:57):

All right, so here you’ll see a diagram of a typical performance management cycle. So the performance evaluation is just one piece of that process. Ultimately, the goal of the performance management cycle is to ensure you have a highly performing organization, because you maintain or continually improve individual performance. The first step is performance planning, in which the employee and the supervisor collaborate and develop a performance plan that details the goals and objectives for the coming period. At this time, you can also ensure the two of you are on the same page about the employee’s career aspirations or development goals or professional ideals. Not all employees have the same career goals, so you don’t want to assume here.

Marisa (04:44):

Throughout the review period, there will be ongoing informal coaching, or perhaps even some other formal coaching sessions aimed at continuous improvement. As the manager, you’re then going to assess the employee’s performance based on the employee’s completion of their goals and on objective job related criteria. These criteria should be used and understood by the employee in advance. So many companies use performance competencies in addition to ratings on specific job goals, and we’ll talk about that because it’s a great tool and we’ll talk about it more later. Finally, the performance review will be created based on the assessment of how well the employee completed those performance goals, and an evaluation of performance in the core competency areas. You’ll also discuss developmental goals and plan for the next review period.

Marisa (05:37):

Please, please note that throughout the entire cycle, there should be both performance feedback and support from the manager. These are critical to ensure the employee understands what’s expected of them and whether or not they’re meeting their goals. So remember, the performance evaluation is one part of the overall performance management process. Performance evaluations serve the purpose of giving employees positive performance feedback and recognition for accomplishments during that period. They also serve to provide discussion of needed areas of improvement and are a venue to discuss career development and future goals. Finally, the performance evaluation will generally be used to justify whether or not the employee receives a compensation increase, a promotion, or any other adjustments to their role or benefits.

Marisa (06:36):

Now we’ll talk a bit more about creating a performance evaluation. So it’s really common to have an annual performance review cycle, meaning the employee receives a formal written review once per year. And there are pros and cons to this approach. We’ve definitely seen a trend out there to move towards more frequent evaluations. Workplaces aren’t stagnant and business needs change very quickly, not just once a year. So more frequent evaluations provide flexibility to match changing workplace conditions. They allow you both to recalibrate an employee’s goals as workplace needs require, and to discuss mid-year course corrections where needed when performance maybe isn’t meeting expectations. They ensure that regular performance check-ins are occurring on a more frequent basis because they’re required by the process. Additionally, more frequent evaluations mean that performance conversations are all tied to salary conversations, which should help produce more meaningful data. Ideally more frequent performance meetings pave the way for ongoing quality conversations between managers and their employees about performance and satisfaction and development, not just about pay.

Marisa (08:00):

Now, I know many small employers don’t have a formal performance management process at all. And if that’s your organization, simply implementing an annual review process might sound really daunting. Or some organizations do have a process in place, but they have a hard time getting annual reviews completed on time or with regularity. And in this case, the idea of implementing an even more frequent process could be overwhelming. Even if there are condensed requirements for those additional reviews. In any case, it is important to ensure that a process is implemented that can actually be maintained. It’s just not a good idea to promise employees a performance review on a schedule that isn’t going to happen with consistency. So while there can definitely be benefits to a more frequent review cycle, if it’s something that isn’t likely to be implemented well or maintained in the long-term, then it’s probably re-evaluating.

Marisa (08:58):

All right, so let’s talk about the format of your performance evaluation. There’s really no one perfect answer on what a performance review should look like. As a matter of fact, there are many conflicting opinions out there about this, and unfortunately, there are a lot of studies that say both employees and managers aren’t happy with the performance management systems being used at their companies. A Watson Wyatt survey showed that only three out of 10 workers agree their company’s performance management system actually improves performance. Keep in mind that studies like this when they say workers, that also includes HR staff who aren’t happy with their own performance management processes.

Marisa (09:42):

So now you might be thinking, “Then why bother?” And a very small number of companies out there, like less than 1%, have ditched performance reviews altogether, and maybe that works for them. But we do caution if you do this, you still must have some type of formal feedback mechanism, and it can be really difficult to implement something like that well. Companies that don’t have a formal review process can put a lot of burden on managers to have performance conversations, and this could fall through the cracks when there isn’t a formal process that mandates it. With all that said, I’d like to just go ahead and acknowledge it is really difficult to create a performance evaluation that makes everyone in an organization happy. It might be impossible. If you don’t already have one in place, it’s likely not going to be perfect on the first, maybe even on the second try.

Marisa (10:37):

So now we’ll go over the types of things that are typically found in a performance evaluation. Common pieces of a performance evaluation include a manager review, a self-assessment, I use that term interchangeably with self review, and then goal setting for the upcoming period. Sometimes reviews contain coworker input, but there are a lot of caveats to that. I’ll talk more about each of these pieces of the evaluation in the next few slides. So the manager’s portion of the review will often include competency ratings. A performance competency is typically a defined set of behaviors that the company has determined are important. In other words, performance objectives on the performance plan could be thought of as the what of the job, while performance competencies are the how.

Marisa (11:34):

So there are behavioral characteristics that the company has determined will impact results. Some competencies may be measured company-wide, while others may be measured within departments or for individual roles. Some examples of competencies are communication, teamwork, leadership, even production. You might have competencies around ability to adapt to change or relationship building, if that’s critical to success in a particular role. Companies can get very specific about how they define these things. Narrowing this down to a small list of critical competencies will help keep the system simple and consistent.

Marisa (12:14):

Generally, if we’re using competencies, there’s going to be some type of rating scale. Rating scales can be numeric, like one to five, or the readings can correspond with an adjective, such as needs improvement, satisfactory, or excellent. Or it could be based on expectations like meets expectations, exceeds expectations, that sort of thing. Or the words could describe how often the behavior’s exhibited. Consistently, most of the time, inconsistently, rarely. You get the idea. Something to consider, though, when you’re determining what kind of scale you’ll use, is the fact that the larger the number of options, like let’s say a scale of one to seven or one to ten, the more ambiguous this might end up to an employee. For example, the difference between scoring a six versus a seven out of ten may be harder to truly gauge then scoring a three out of five versus a four out of five.

Marisa (13:13):

Another trend is companies moving away from the use of numerical ratings to rank employees. So essentially comparing each employee to others. There’s some research that shows a ranking system can really inhibit and plague collaboration, and when numerical ratings are removed, collaboration generally increases. In any case, if you do use ratings in any form, you want to ensure that each level is clearly defined and that managers are trained in the system and understand what performance at each level looks like so that the levels are applied consistently.

Marisa (13:53):

In addition to competency and rating information, the manager review should include information about how well the employee completed their goals from the last cycle. You’ll want to ensure that specific projects the employee completed or achievements they earned are captured in the review, and that any feedback about them is given. You’ll want to capture general feedback about the employee’s performance. It is important to honestly assess performance and not sugarcoat your written evaluation. It is amazing how often we hear that a client wants to terminate a poor performer, but they have glowing reviews on file. Creating only positive documentation, which leaves out performance shortcomings, doesn’t help an employee develop and could hurt the company later in the event that termination became necessary.

Marisa (14:44):

On the other hand, don’t invent something for the employee to improve on if you don’t actually have concerns about it. But even if the employee wrote an excellent and accurate and objective self review, it is very important that the manager find additional feedback and comments to add. You don’t want the employee to feel like they’ve done the entire job of assessing their performance at review time. And most of your employees actually do want to hear some input from the manager about their performance. As I mentioned before, assuming that there’s ongoing feedback and coaching happening, nothing in the manager review should be a total surprise for the employee.

Marisa (15:27):

Ideally, the self assessment should mirror the manager review. I’ve seen it happen where managers may not fully understand the role of the self review, and they may not actually be reading or using them effectively. The purpose of the self review is to make employees think about their own performance and to take a crucial look at how they did over the review period. The self review enables the manager to see if employees make an accurate understanding of their own job performance. A self review can enable a manager to ensure that no key accomplishments have been left out in the manager review, as well sometimes managers are so far removed from the employee’s work that they might miss accomplishments at review time. And if you’re doing these reviews annually, some things might get forgotten over the course of a year. Self reviews take advantage of the employee’s familiarity with their day-to-day work. They also highlight the parts of their performance that are important to the employee, which can tell you quite a bit.

Marisa (16:27):

And employees all across the performance spectrum will be required to evaluate how they are doing, not just those at the very high and low ends. Self reviews can draw manager attention to things they might otherwise miss. They enable the performance review process to be more participatory and give the employee involvement and a voice in what’s documented about their performance. A lot of companies have removed ratings from the employee section of the review and only include narrative questions about objectives. Some employers think having the employee rate themselves just isn’t a useful exercise. While some employees may honestly rate themselves, many may just give themselves the highest ratings. So if you do include ratings, you’ll want to ensure that you provide some guidance, such as an average employee would score three out of five. Or to provide descriptions of what each rating would look like in practice.

Marisa (17:23):

One caveat related to the self review portion, and unfortunately I’ve seen this happen quite a bit, is that sometimes managers will receive the employees assessment and then say on their portion, “I agree with all of the employees comments on their self review,” and then not write much of anything else. So like I mentioned just a moment ago, most of your employees actually do want to hear some input from the manager about their performance, so it’s very important that the manager find additional feedback and comments to add. All right, so I’m just going to come right out and admit, I am not a huge fan of having co-worker data in regular performance reviews for a variety of reasons. And I’ll get into a few of them here. But when we hear the term 360 degree review, or a 360, most people think about informally gathering coworker input, but a true 360 is a tool that’s best used only for development. It’s not related to the performance appraisal or rating process.

Marisa (18:22):

When we talk about a true 360, these are done by outside companies, a third party who can ensure there are enough respondents to keep the data confidential. And when used for development, a supervisor may not even actually see the results of someone’s 360. The true purpose is employee learning. So while they have some advantages, 360s have really fallen out of favor for use in performance ratings. They often lack reliable and valid data, and it’s really easy to make mistakes and how they’re administered. 360s can provide broader input than just what the direct supervisor sees, which may be particularly useful if the manager works in a different location than the employee. It can also be really useful to see how the employee is perceived by others. So if you do them, you’ll want to make sure you’re doing them properly.

Marisa (19:12):

A lot of times there are problems in that there’s no context in who is providing the comments. Employees providing input may have no real understanding about the highly skilled technical requirements of an employee’s job. Worse employee comments could be motivated by office politics, and an employee who’s after the same promotion could write negative comments about an employee. Or employees could band together and decide they’re only going to write positive comments for each other. Another consideration is often there aren’t enough people in a specific department or job family for the data to be truly anonymous. So that can impact results. For 360 data to be successful, there must be a strong culture of communication and trust in an organization. My recommendation is that if you wish to use this type of data, use an outside vendor, do a formal 360 as part of your development process and keep that feedback as part of the development process only, not tied to performance ratings or pay increases.

Marisa (20:15):

One last thought about putting your evaluations and feedback together. You should be detailed with your input in performance evaluations and during the conversation. Don’t say, “You performed well this quarter,” since that isn’t measurable. Be specific. What exactly did they do well? So you’ll also generally want to do some goal setting and have a discussion about professional development as part of the annual review. So that’s going to include SMART goals. This acronym stands for specific, measurable, attainable, relevant, and time-based. I’ve seen a ton of performance reviews, and it’s surprising how few of them truly have SMART goals in them on the first draft. Or maybe they appear SMART on the surface, but weren’t actually. These types of goals help ensure you’ll be able to measure whether the employee succeeded in meeting your expectations when you go to review performance at the next cycle.

Marisa (21:06):

So for example, if you have an employee that’s having a problem with time management and you state, “Jane should delegate more of her tasks,” well, that’s not a SMART goal. You will not actually be able to measure whether that happened or not. But if, instead you say, “In the next review period, Jane should delegate at least five of her responsibilities to her team members,” this gives the timeframe in which it will happen, has more specifics about what will happen, and is presumably attainable. It’s also clearly measurable as to whether or not it happened. Depending on the complexity of employee jobs, some performance plans will also include a place for employees to detail specific action items to work toward those performance goals. So to continue our example with Jane, an action item could be, identify the task to delegate, identify the team members to delegate them to, and the timeframes in which these tasks should happen. We’re going to switch things up and jump into our poll here. My friend Sarah is here and she’s going to administer that poll.

Sarah (22:09):

Awesome. Yeah, we’ll let Marisa take a quick sip of water. So I’m going to go ahead and launch this poll here. So how often does your company conduct performance evaluations? No wrong answers here, just curious, taking a temperature check. Looks like we’ve got about half of you that have participated. I’ll give you another few seconds here. You’re quick. We’re up to 65% here. Give you another five seconds and then we’ll close out the poll and take a look at where people are. So we’ll go ahead and close this in 5, 4, 3, 2, and 1. Up to 75%, that’s awesome. Okay, cool. So let’s share the results here. So it looks like over half of you are conducting performance evaluations annually, and then it looks like it goes down from there. Almost 20% don’t do them regularly. Cool. Well thank you so much. I’m going to turn it back over to Marissa.

Marisa (23:10):

Thanks Sarah. It’s always interesting, I love to see that. What are people out there doing? So that’s a pretty common response and almost what I expect to see, but it’s interesting that every time we do this and share this information, that number of people doing it more often than annually is going up. So interesting little facts there. All right. So now let’s wrap things up and talk about the performance meeting itself and the follow-up after the meeting. And then, like I mentioned, I’ll get into some Q&A at the end. So let’s talk briefly about the timing of the evaluation. As we discussed, typically the employee and the manager both have forms to complete. Some processes will kick off with the pre-work, which can involve the manager gathering an employee self review, or the manager and the employee exchanging forms at the same time.

Marisa (24:02):

In any case, it’s good to have an employee receive their manager’s written assessment prior to the meeting so the employee can process the information, and any emotions maybe, ahead of time and know what to expect. To ensure a successful meeting you’ll want to make certain that you’re fully prepared for it. Start by strategically choosing a comfortable environment for the meeting to occur. Does your conference room have fishbowl windows where others are viewing the interaction? Depending on the culture of the organization or perhaps your great performers or manager level employees could have this conversation over lunch out of the restaurant. But I’ve also had some employees where that made them feel uncomfortable and they don’t see that as a reward. So you really want to think about your employees and what would be most comfortable for them when determining where to conduct the review.

Marisa (24:58):

So in terms of the actual meeting, it’s really common that managers approach the conversation with the famous feedback sandwich. In other words, starting with positive information, then giving constructive information, then ending on another positive note. And I know this is a technique that many people were taught at some point along the way, including myself, but this can be de-motivating to your top performers and falsely encouraging to those who aren’t performing well. So a better approach is to pick a side and focus on it on its own. For those doing well, stay with the positive input, then use the coaching after you’ve discussed all the strengths and achievements you want to highlight. Think about and discuss with the employee what behaviors you want them to stop, start, or continue. Ask the employee how they think things are going. This should elicit a more honest conversation about what’s going well and what could be going better. It’ll also enable you to have a true discussion without monopolizing the conversation and just talking at the employee the whole time then.

Marisa (26:05):

While I know it can be challenging for many of us, for poor performers, particularly those who aren’t just aren’t doing well after a lot of coaching, don’t sugar coat that review. This is your opportunity to impress on your employee how important it is that things improve. Remember, you want to be specific, you want to focus on the behavior and not the individual. This is why performance reviews are so valuable. If you aren’t having these conversations about what needs to improve, you have no way to expect that an employee will know and be able to do better for themselves and for you. Finally, be sure to take notes on the conversation so you can refer back to it later. If you and the employee discussed action items and tasks to complete or check back on, I recommend sending them a recap through email or a similar way that has some sort of paper trail.

Marisa (26:59):

And last but not least, you want to update and finalize any paperwork related to the review and ensure that it’s stored in the employee file. Clarify and review any specific action items you’ve discussed. Or if you need to schedule follow-up meetings with the employee, you want to take care of that as well. Then you’ll want to confirm that there are frequent check-ins on the employee’s goals, and these really don’t need to be formal. These ultimately just help to ensure that everyone is on the same page and that you’re coaching where needed and readjusting the goals if circumstances or business needs require that.

Marisa (27:36):

All right. So before I jump to the Q&A session here, I want to leave you with this. Remember there is no one size fits all performance evaluation style or template for companies, or even for teams. While there are important pieces to consider and maintain, no matter the timeline, you’ll want to take a hard look at your current strategy and determine whether it’s effective, reasonable, and relevant to your organization. It’s going to be really hard to get buy-in if the way you’re doing things doesn’t feel relevant. If valuations are new for you, it might take a while to get them figured out and find the right fit, but it will really be worth it when you see the results and improvements in employee performance. And ultimately even if your employees are doing great right now, aren’t we always striving to do better and move our companies forward?

Marisa (28:31):

All right, I know we covered a lot today and we’re almost at the end of our time, but I’m going to jump into the questions that may have been sparked for you. Some people have already started chatting in their questions as we’ve been going. Please do so if you have them. We might run a few minutes over today answering questions, but you can leave at any time. We will, as I mentioned at the beginning, send out a recording and the slides within 24 hours. So I’m just going to jump in and start answering some questions here. So someone asked how do non-numerical ratings in a performance review get turned into usable data? If you collect open-ended ratings, we struggle with finding a way to use the data to represent overall performance.

Marisa (29:13):

So if you need to turn performance reviews into data, which not every company does, that’s not on the agenda for a lot of companies, then you will probably want to work with those more numeric based scales. I would strongly encourage you to also include some open-ended opportunities for communication because not everything can be captured in just a one to five rating scale, but you could use a hybrid approach. You could say one to five, but three means mediocre and four means consistently and five means always. And that might be a way that you can combine the two and still be able to get some data out of it.

Marisa (30:00):

Someone else asked, is there a reason to do one through six versus one to five and not having a middle number? Not necessarily. I think there are advantages to both. As I mentioned, though, the smaller the scale, the better. It makes it more clear. A difference between each number on a one to five scale is very different than the difference between the numbers on a one to ten scale. A six or a seven versus a three or four. So keep that in mind. Some companies like having a middle number, because it allows them to have that very meets expectations kind of standard. Others really want employers and employees to pick a side. Is it good or is it bad? And I think that’s going to just depend on the team or the company you’re looking at.

Marisa (30:54):

And then it looks like… Got some other questions here. If performance evaluations are not used for pay increases, what are some other incentives that can be used to complete them? Great question. One is it should be an expected part of their job. You would treat not completing a performance review as you would not completing any other piece of their job. So hopefully you’re holding your employees accountable to doing that. And performance evaluations shouldn’t be tied to directly to pay increases, but they should be one factor in considering pay increases. They shouldn’t be the same conversation, but it’s certainly something you’ll want to consider when you’re looking at giving somebody a merit increase or a promotion.

Marisa (31:43):

Or if somebody is looking for a transfer or wants to take on more responsibility, those are all really great ways that you might utilize what you gathered in the most recent performance evaluations for an employee. Are they doing their current job well? Do they take feedback well? Do they have realistic views of their own performance? Those are all things you’d want to consider if you were going to give someone more responsibility or a promotion or a transfer, things like that.

Marisa (32:13):

All right. And the last one that we have time for here before we have to step away, what’s a good timeframe to have managers complete their performance evaluations, two weeks, four weeks? That’s going to depend. How many performance evaluations are they completing and what is their workload like? I would generally say that’s a question you should in part ask them. How much time do you need to get these things done? And then you can consider that when you’re determining a timeframe. We don’t want it to linger too long. We don’t want employees and managers to fill out their portions and then not have the conversation for two months, but it also doesn’t need to be within the same week.

Marisa (32:57):

I think most commonly, I see two weeks to four weeks, so somewhere in that two week to a month range between the start of the process and when the meetings actually happen. And if that’s not working for you, you’ll want to look at, do we need to simplify the evaluations? Do we need to extend the timeline? What’s making it take longer and are we okay with it taking longer? All right. Thank you everyone for joining us today. As I mentioned, you’ll get a copy of the slides as well as the recording of this webinar within 24 hours. But I hope it was helpful for you, and I hope that you all go out in the world and work on developing your excellent performance evaluation processes. Thank you so much. Have a great rest of your day.

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