Do you value operational efficiency?

Here’s a simple truth:

If you want operational efficiency, performance reviews are a must.

It doesn’t matter whether your organization is large or you’re a small company with only a few employees.

Performance reviews are the single most important form of feedback that you can provide to your employees. They’re a fundamental means of improving your subordinates’ performance.

Along with regular one-on-one meetings, it’s essential that you have a performance review once every six months.

Wait! What am I trying to achieve here?

Through a performance review, you’re seeking to:

  • Determine what skills are missing and find ways to remedy the situation.
  • Boost a subordinate’s motivation so that he’ll perform at a higher level.

That’s great! Now how do I assess performance?


Step 1:

Clarify, in advance, what you expect of your subordinate. Then decide whether the subordinate has performed to expectation.

Step 2:

Characterize performance into:

  • Output measures
  • Internal measures

Output measures are such things as meeting sales quotas and increasing yield in production.

Internal measures account for activities regarding the creation of output for the period under review. This will account for future output.

For example: Are we positioning and developing people in such a way that the business will be able to handle tasks better in the future?

Step 3:

Another thing we must consider is short-term-oriented performance vs long-term-oriented performance.

Step 4:

Also consider the time factor.

The subordinate’s output during the review may have nothing to do with his activities during the same period.

Accordingly, you should look back at the time offset between your subordinate’s activity and the output resulting from that activity.

Step 5:

Avoid the “potential” trap.

At all times, you should access the performance, not potential. For example, in some cases, though the output measures and internal measures are poor, we are tempted to give a positive rating to the subordinate because he handles himself well and is knowledgeable.

We must avoid such traps. It’s very important that we assess the actual performance and not appearances – real output, not good form.

No matter how well a subordinate does, there is always room to improve.

Based on 20/20 hindsight, we can compare what the subordinate did and what the subordinate might have done. The variance can tell us how to do things better.

Delivering the assessment

There are three key points to keep in mind while delivering an assessment.

Key point 1: Be honest.

Be totally frank with your subordinate in praise and in criticism.

Key point 2: Watch carefully.

The aim of communication is to transfer thoughts to the other person. Words are only one means of communication. You must watch the other person’s emotions, too.

Perhaps the other person is so emotional, he can’t understand something that would be perfectly clear to someone else.

Perhaps the other person is so preoccupied trying to formulate answers, he really can’t listen and get the speaker’s message.

You must employ all your sensory capability to ensure that you are being heard. You must watch the person.

Does the subordinate give the appropriate response to what you are saying?

You will need to watch his responses, both verbal and non-verbal, to ensure that your subordinate is properly interpreting your points.

Key point 3: Don’t make it about you

Keep your insecurities, anxiety, guilt, etc. out of the review.

3 types of performance reviews

1) Positive and negative assessment:

Most reviews fall into this category.

Common problems here include superficiality, clichés, and a laundry list. These will leave your subordinate confused and will hardly improve his performance.

Here are some ways to improve your delivery during this type of review.

The key here is to recognize that your subordinate, like most people, has only a fixed capability to deal with facts, issues, and suggestions. You may possess seven truths about his performance, but he may have the capacity to take in only four. So, in this case, less is more.

Step 1:

Consider as many aspects of the subordinate’s performance as possible.

Scan material such as progress reports, performance against quarterly objectives, and one-one meeting notes.

Step 2:

Based on step 1, write down what you think of your subordinate’s performance (worksheet).

Write down everything.

Step 3:

Look for relationships between the various items you have written in step 2.

You may notice that certain items involve the same phenomenon, i.e., the same strength or same weakness.

Such relationships are “messages” to the subordinate. Now, from your worksheet, draw a conclusion and specific examples to support these messages.

Step 4:

Once you’ve compiled a list of messages, ask yourself if the subordinate will remember all these messages. If not, delete the less important ones.

2) The poor performer review:

This type of review is for subordinates who, unless things turn around, could get fired. Poor performers are likely to go through these stages.

Stage 1: Ignore the problem, i.e., nothing is wrong

A poor performer has a strong tendency to ignore his problem.

You need facts and examples so that you can demonstrate its reality.

Progress of some sort is made when the subordinate actively denies the problem rather than passively ignores it.

Stage 2: There’s a problem, but it isn’t my problem.

In the next stage, the subordinate admits that there’s a problem but maintains that it’s not his problem. He blames others – a standard defense mechanism. Using this defense, he can continue avoiding responsibility for remedying the situation.

The first two steps follow each other rapidly, but things get stuck here.

Stage 3: Assume responsibility

Here, the subordinate must take the big step: assuming responsibility. The subordinate should say that not only is there a problem but it’s his problem.

This is the most difficult step in the process. It’s a very big emotional step for an employee to move from blaming others to accepting responsibility.

Stage 4: Finding a solution

Once responsibility is assumed, finding a solution is relatively easy.

It’s your job to move the subordinate through all the stages. The final stage of finding a solution should be a shared task.

Moving an employee through the four stages is very difficult.

A poor performer’s review has three possible outcomes:

  • The subordinate accepts your assessment and commits to the solution proposed.
  • The subordinate doesn’t accept your assessment but commits to the solution proposed.
  • The subordinate doesn’t accept your assessment and doesn’t commit to the solution proposed.

I strongly feel that any outcome including a commitment to action is acceptable (points 1 and 2). Complex issues don’t easily lend themselves to universal agreement. The keyword here is “acceptable.” The most desirable outcome is the subordinate agreeing to the problem and committing to solving it (point 1).

If you can’t achieve this, accept the subordinate’s commitment and move on (point 2).

You can’t confuse emotional comfort for operational needs.

To make things work, people don’t need to side with you. They must simply commit to the decided-upon course of action.

3) Reviewing the outstanding performers:

When reviewing high performers, most reviewers make little or no attempt to define what the subordinate must do improve his performance or even maintain his current level.

It seems that, for achievers, the supervisor’s effort goes into determining and justifying the judgment of superior performance.

For a poor performer, the supervisor spends a lot more time and concentration on improving performance.

I think our priorities are reversed. We should spend more time trying to improve the performance of our stars, as they account for a disproportionately large share of the work in any organization. Improving the work of stars is a high-leverage activity – if they get better, they’ll have a greater impact on the group.

We might have a hard time being critical when we are talking to a superior employee. However, we must keep in mind that no matter how stellar the performance is, there’s always room for improvement.

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