Research suggests that roughly half of businesses (48 percent) don’t conduct employee performance reviews. And a 2015 study published by Deloitte revealed that 82 percent of surveyed companies felt that employee review processes were “not worth the time.”

Similarly, a separate research project found that 45 percent of surveyed businesses believed that performance evaluations actually undermined employee motivation, with 41 percent citing manager bias as a pervasive problem that limited the value of reviews.

Have an employee that just isn’t working out? Read: Terminating an Employee: What Managers Should and Shouldn’t Do

So given these attitudes, should your business stop these reviews altogether? Or could it be possible that you’re business isn’t using these discussions to their full potential?

Why Isn’t Your Performance Review Process Working?

Annual

Far too often, employee performance reviews occur only once each year, undermining their value particularly when they are treated as a nuisance. Instead, these meetings should be part of an ongoing discussion between managers and their subordinates. At no point in the year should your workers be unsure of what is currently expected from them to not only succeed but also grow in their current position.

Similarly, if there is a concern regarding an employee’s output, or even worse, their behavior, you owe it both to your business and your worker to address the issue promptly. Putting off an uncomfortable conversation will only allow the problem to fester and create more opportunities for the concern to cause additional problems.

Inaccurate

We humans are notorious at allowing our preconceptions and unconscious biases to affect our decisions. In fact, psychologists have developed the term “halo effect” to describe our tendency to allow our initial impressions to color our subsequent evaluations of a person or thing. And the halo effect can be particularly troubling when it influences how you view the capabilities and performance of your employees — particularly when unconscious assumptions regarding race or gender enter the mix.

A 2014 university study explored this phenomena, requiring 159 faculty from various departments to grade an oral presentation and written assignment, both provided by the same student. The teachers first listened to the oral presentation, with half receiving a poorly-developed project and the other half a well-prepared study. Then all 159 reviewers were asked to grade the same research paper. Not surprisingly, the faculty that viewed the well-prepared oral presentation consistently graded the paper higher than those that witnessed the poorly-prepared presentation.

An effective review program will incorporate objective performance standards that can help mitigate managers’ preconceptions. Ideally, you should also provide anyone conducting these reviews with unconscious bias training to help them identify and overcome their personal preconceptions.

Demoralizing

If your employee review discussions are primarily focused on what an employee has done wrong or what they need to change, you’ll soon find that your staff dread these meetings as much as their managers. While it is important to discuss shortcomings and areas in need of improvement, these conversations also need to focus on an employee’s individual successes and the value that they contribute to the organization.

Incorporate into the discussion what the employee’s plans and expectations are. By being invested in your staff’s long-term career goals, they are much more likely to remain engaged and enthusiastic in their current position — particularly if they feel that these current successes will lead to future opportunities.

In fact, when surveyed both Millenials and Generation Z cite “opportunities for advancement” as one of the primary reasons that they choose to stay with an employer.

Vague

Whenever these review discussions end, your staff should have a clear expectation of what is required of them today, tomorrow, and into the future. Whenever possible, your managers should be constantly working with their direct reports to establish objective performance goals, and your staff should be able to know at any given time where their current performance rates against these targets.

If both sides know exactly what is expected, these performance discussions can go much more smoothly.

The Next Step

When your business takes the time to invest into its staff, you’ll quickly find that your staff are just as likely to invest their time, energy, and enthusiasm into your operations. And as always, regular and honest communication can help drive organizational success and better mitigate potential problems before they have a chance to take root.

To learn more about how we can help equip your managers to drive these employee performance conversations, request a demo of our performance management courses today.