Eliminating Performance Ratings: 3 Ways to Improve the Employee Experience
About the Author: Jarrett Lee is a Research Associate Intern at Lighthouse Research. His research focuses on case studies of companies that successfully deliver results on their talent and learning transformation projects. He is pursuing a Bachelor’s of Communication Arts as well as a Master’s of Science in Human Resource Management.
Nothing causes headaches for HR professionals more than the dreaded annual employee performance rating. Performance ratings, are subsets of performance management systems, and are typically the most disliked part of any HR professional’s job. They are notorious for being time consuming, they can demotivate employee performance and often they fail to achieve the main objective of increasing employee performance.
Recently large companies such as IBM, GE, Adobe, Microsoft, Expedia, Motorola, and Juniper Networks have eliminated doing traditional employee performance ratings. Empirical data conducted by HR firms found that the process was taking too much time and energy, and was not resulting in increased performance. So can you improve employee performance systems without doing a traditional employee rating?
Three Keys to Improving The Employee Experience
Three ways to improve the employee experience while still gauging performance include: make sure the system rates what is important and rewards what it rates, eliminate flawed ranking systems and generic scales, and provide continuous feedback with solutions.
Make sure when designing the performance management system, that the procedures align when the objectives. If your company values independence and creativity, it wouldn’t make much sense to design the workspace for rows of one size fits all cubicles. Same idea with performance ratings. If you want employees to perform with certain objectives in mind then your review should rate on those objectives. Aligning procedures with goals ensures that employees perform the right procedures and are rated on those procedures.
Typical rating systems include numeric scales and forced rankings of employee’s used as a comparison. This creates tension between workers and while objective in theory, often becomes subjective in practice. People are too complex to be analyzed with checkboxes.
Creating a High-Performing Workforce
One example of a new model that is working comes from an American technology firm. Juniper Networks recently eliminated forced ranking and instead uses a system of “J Players.” This removes the comparison of employee to employee and instead focuses for all employees to perform at 100%.
Employees need feedback, and performance evaluations are vital for both the employee and the company. There is no way to grow your company without first growing your employees. Using continuous, real time feedback with solutions; instead of annually enables the employee to practice and develop. Setting objectives once and reviewing performance at the end of the year is not an effective way to improve performance.
[Click here to see the latest research on how high-performing companies manage employee performance]
Lastly, it is important to remember that all companies are different. A performance management system that works for one company might not be the best fit for another company. The outcome should be about increased performance more than anything else.
Ben Eubanks is the Chief Research Officer at Lighthouse Research & Advisory. He is an author, speaker, and researcher with a passion for telling stories and making complex topics easy to understand.