Another year has sped by, and it’s time again for annual performance reviews. It might feel like you completed them a few weeks ago, or maybe you didn’t even get to them last year because of lockdowns, hiring freezes, lack of funding or other issues related to the pandemic. You might be tempted to repeat the same process you used in the past. However, we hope you will go one step further and use this moment as an opportunity to rethink your performance reviews and refresh them based on the latest trends in talent management. That’s why I recruited my good friend and fellow Duke MBA alum, John Troy of WorkMonger, to boil down the conversation into a step-by-step process for the social sector.
So, it’s annual performance review time, again? Didn’t we just do this a year ago?
Before you dust off last year’s review and start filling it in again, why not take a step back?

What is Your Goal?

First, your overall goal should be a well-run organization that is efficiently utilizing its resources to deliver excellent results in service to your mission. What does a well-run organization need? Productive, happy employees who stay for a whileAn effective performance review should answer five questions for an employee in detail with data (to the extent possible) and specific examples:
  1. How am I doing?
  2. How is my work contributing to the team’s and organization’s performance?
  3. In what areas could my work improve to better serve the team and organization?
  4. What steps should I take to improve my performance in those areas?
  5. How will the organization invest in my development to help me improve my performance?
Effective performance reviews identify an employee’s strengths and weaknesses. Then, you can turn the performance review into a performance plan for the upcoming year. 
Pro-Tip: Don’t fall for the trap of thinking a performance plan is focused primarily on improving weaknesses – we should encourage and support our employees in honing their strengths.

Is Your Current System Meeting Your Goal?

Unfortunately, the stats say probably not. Gallup reports that only 14 percent of employees agree that their performance reviews inspire them to improve. Some research suggests that reviews make things worse about 30 percent of the time. However, this doesn’t mean you have to stop evaluating your employees. Instead, you need to find out what you’re doing wrong and how to do it better.
Traditional annual performance reviews often leave team members leaving their manager’s office thinking, “Why don’t they like me?” Additionally, they create anxiety, with many employees feeling like they are sitting in the principal’s office in school waiting to find out if they’re in trouble. This destroys morale and breeds resentment and bitterness in the workplace, making it difficult, if not impossible, for your team to focus on improving their performance and productivity.
Examples of common employee complaints related to performance reviews include:
  • Being judged on expectations and goals that were never established or clearly communicated.
  • Being judged on one person’s—possibly biased—opinion of their work.
  • Being judged on their worst day or one recent mistake.

How Can We Make Them Better?


1. Set Clear Goals

It’s difficult to provide constructive feedback when you have no agreed-upon performance baseline, frustrating team members who aren’t exactly sure where or how to aim their efforts. Performance reviews should really start when you are setting your organization’s goals for the upcoming year. Employees’ performance goals and expectations should be tied to your organization’s strategic plan and annual action plans. They should be clear, measurable and agreed-upon up front with input from the employee.

2. More Frequent, Less Formal Evaluations

Organizations today move more quickly than ever before. A once-a-year check-in is often too little, too late. Reviewing performance weekly, monthly and quarterly tends to be less threatening. It’s also more practical – employees are able to adjust and act upon the feedback shared with enough time to achieve different results for the organization. Even better, by the time you reach the annual review, it’s really just a wrap-up of the past four quarterly discussions. There should be no surprises for the employee, significantly reducing any stress or anxiety the employee may experience in the process.
Pro-Tip: Avoid the Recency Effect. Don’t overly focus on or emphasize the most recent events, when the review is supposed to cover a longer period of time. This is another reason we like more frequent evaluations.

3. Constructive, Concrete Feedback

After an effective performance review, your team members should have actionable steps and a strong understanding of ways they can improve. It’s okay to provide negative feedback but be specific and offer examples. Do not invent areas of improvement (or disproportionately emphasize improvement) to simply give your employee something to work on. And don’t be stingy with your praise! If you have an employee who is exceeding expectations, tell them! It will be the cheapest bonus you ever give. 
Pro-Tip: The Sandwich Approach to feedback has been a popular strategy to present negative feedback to employees for decades. However, it undermines your feedback and prevents growth. Look for clearer ways to present constructive feedback to your team.

4. Response Time

Effective performance reviews are not one-sided events. Allow time for your team members to respond to your feedback. Find out if they need help meeting specific goals or expectations. Additionally, include a discussion of professional development and career goals to determine how you can best support your team members in their growth. You should also get feedback from your team about your role as their manager or supervisor. If they do not offer you feedback, solicit it. Allowing time for a conversation increases the chances your employees will leave their review feeling valued, which in turn increases the likelihood they’ll stick around on the team for a while.

5. Avoid the Traps of Our Sector

Tough annual reviews and ranking employees is far more common in the for-profit sector than the nonprofit sector (Think: Jack Welch of GE). Nevertheless, performance reviews are a powerful tool that, when done right, can be relevant and helpful in the social sector. But make sure to avoid two common social sector traps along the way:
Don’t Be Heartless. Remember your staff’s motivation, especially if you are a manager who has recently transitioned from the private sector. Most employees in the sector aren’t here for the money (though they still deserve to be paid fairly). Remember that pouring their heart into something may make them more sensitive to criticism. You should still provide accurate feedback but keep your audience in mind stylistically for a more effective review.
But Don’t Be Too Nice. On the other hand, some of us can have too much of a bleeding heart. You are probably a nice person. Your employees are probably nice people. If you are working in this sector, you are by definition valuing something more than merely making a profit. That’s so nice of you! As Suzanne has written before, our sector’s niceness can get in the way of progress. In performance reviews, it can also get in the way of clear, straightforward feedback. Avoiding sharing feedback is not being nice to your employees – you’re actually doing them a disservice.

6. Review the Review

Take the time to get feedback about the system you use for your reviews. This is especially relevant when you provide a performance review form to your team. Ask managers and employees if they like the form. You want something that provides structure, guidance and consistency. Don’t simply keep using the same form because you always have, as many forms are unnecessarily cumbersome, fail to communicate desired or important information, and are not user-friendly.
Is your organization struggling with performance reviews, or are you one of the few that gets them right? Let us know what you do and don’t like about your performance review process. We would love to help you find the right solution.
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