My experience with the performance management process at different companies varied drastically, often depending on the company's size. However, I would argue that the performance appraisal process should be very similar whether your company has 5 employees or thousand.

If I were to categorize my experiences in broad and non-technical terms 🤠

• There are workplaces where performance review just does not happen. You would be lucky if your manager spent more than 5 minutes a year offering feedback on your areas of strengths, areas that need improvement, or career goals.
• There are places that just wing it.  The performance review process is in place but no one can really describe how it's structured. The expectations from individuals involved are not clear, therefore the process does not always achieve the goal of accelerating employee development and impact. In short, perhaps the performance review process is only in place so it can be said that there is one. (I hope this does not come across as too cynical.)
• There are places where development planning is a well-thought-out process for managers and individual contributors for. The review process is created to help individuals employees achieve their potential and grow in the company. However, getting it done is a herculean task and dreaded by everyone who is involved in the process. 💪🏼😩

Why is Managing Performance so Important?

The Natural Inclination to Grow:

Team members naturally want to grow in almost every aspect of their lives. To facilitate this growth you need 2 ingredients: Motivation and Training.

Motivation and Training can be thought of as tools which a manager can use to improve their team's performance. That said, Motivation has to come from within, so all a manager can do is create an environment in which motivated people can flourish.

What motivates people to grow in their career, taking on bigger, more complex, and more impactful responsibilities?

• Money: Career growth can be driven by money concerns. However, once the employee thinks they have enough money coming in, they will no longer be motivated by salary increases alone.
• Recognition: Money still matters but it is not the motivating factor. The team member wants to achieve their personal best. They want to push their own limits. To sustain their motivation,  connect this team member's individual performance to the performance indicators of their team or organization.

If you manage your team's performance right, employee growth should translate to growth in each individual's ability to deliver more impactful results for their customers, team and company. Achieving this direct correlation between employee growth and impact growth requires following a simple but thoughtful performance management process. This is a process where our team members are trained, motivated and clear on what is expected from them.

Learning the Skills Needed to Take on Bigger Tasks:

Increase impact by delivering complex, impactful projects (both technically and/or organizationally complex).  The skills that are required to deliver big impactful projects are acquired over time with practice, conscious focus and coaching. Without guidance, feedback and a plan very few individuals would be able to acquire the skills needed to deliver complex projects.

Training and clear expectations play a critical role in the completion of complex projects. Does everyone on your team know what is expected of them at their level? Do they know in which areas they need to grow in order to reach the next milestone in their career? Your team members as well as you, the manager, need to be able to confidently answer these questions. This will allow you to focus and coach each individual employee when they are falling short.

Incentives for the Company:

Improving performance of your team members should translate to business results since individuals will be delivering more impact results for the company.

In Summary:

Performance review is a critical tool  in a Manager's toolbox which allows managers to ensure individuals on their teams are getting continuous and  actionable feedback to meet what is expected at their current level and the next.

Well-defined expectations for your team members provide you (the manager) with a set of tools to help you guide your team's growth and impact. Without this conscious effort you would not be able to help people grow to their potential and that would be just sad but also also economically unsound, since human resources almost always the biggest expense for companies.

How Can Good Performance Management Go Wrong?

For engineering managers, the performance assessment process can be anxiety-inducing and exhausting. Some coping mechanisms include:  

• Going away for vacation as soon as performance management cycle is done 🏝🏝 (usually for more than one week)
• Talking about the dreadful experience with fellow managers usually over a 🍷 or 🍷🍷
• Coming up with some way to reduce the workload next time around, by doing more work now. 📜

Annual performance reviews have big impact on managers and employees:

From a manager's point of view we need to ask how we can run a performance management process which will provide team members with feedback on strengths and weaknesses, encourage their growth and move them towards their goals, without losing so much sleep.

From our team members' points of view we need to ensure that individual team members get feedback about their performance frequently and not just once or twice a year. Our team members need to know what their manager considers when they evaluate their performance. Team members should be able to provide managers with constructive feedback about their teammates whenever they have something to share. That way managers get a 360 degree view of their team members.

How can we drastically reduce the overhead required to evaluate performance of team members and ensure employee development?

Here are some great ideas to help you implement a light-weight and effective performance appraisal process:

1. Instead of running an annual, bi-annual, or quarterly performance appraisal process which is heavy on everyone involved and ineffective, we should run a process which continuously evaluates employee performance and provides feedback.
2. Instead of focusing on one rating number or a promotion we should should focus on helping team members gain the skills they need. Promotion decisions can involve looking at a snapshot of performance data and deciding whether the individual is ready for the next level at a chosen time.
3. Avoid recency bias, and loss of good feedback by collecting timely 360 feedback from reviewers and using them to coach your team when this information is most effective for that employee's development.

• Set Goals / OKRs

  OKR stands for Objectives and Key Results. An OKR-based goal has two components: The Objective, which is the goal you want to achieve, and the Key Results which are the metrics and measurable accomplishments that show your progress towards achieving that Objective. Put another way, Key Results are how you will know whether you have succeeded in achieving the Objective or not. Establishing both Objectives and Key Results is helpful because together they make the overall intent and the definition of success explicit
  
  
  There are many ways that a team can set itself above the rest, but in our experience setting, tracking, communicating and grading OKRs plays a critical role in achieving such distinction. Disciplined teams commit to setting team and invdividual OKRs at a cadence that they agree on. They Track and evaluate the progress of these OKRs and sometimes cancel them if they no longer need to be done. Most importantly, they review and grade how they did in delivering these OKRs, because that is how you learn to do it better next time.
  
  

  • This should be done at the beginning of each quarter. I recommend setting around 3 goals.
  • In regular circumstances goals should be set by the direct report with the manager's input.
  • Goals are not set in stone. Since things change as we learn more about them, goals should be fluid but always focused on delivering the results that will create a positive impact.

  As discussed here previously, keep in mind your expectations for an individual at his/her level while setting goals.
  
  

• Collect 360 Feedback

  • Some of his/her teammates
  • Coworkers with whom this person regularly interacts
  • Feedback (Self feedback) from the direct
  • Manager's feedback

  I sometimes call feedback "signals" because the word signal indicates continuity. Feedback should be collected throughout the year on a daily/weekly basis. It is powerful for someone to submit feedback when they see that their colleague has done an excellent job in an area that the company values. Avoiding recency bias is another big benefit of collecting feedback continuously instead of only once or twice a year.

  Giving Effective Feedback

  To ensure that your feedback is effective, it is important to keep the following concepts in mind when either providing or requesting it:

  Care personally. You should be writing feedback for someone because you want to help that individual improve in a particular area, or you want to let that person know that they have done an excellent job. The feedback will likely not be well-received if the reviewer does not provide it with good intentions.

  Be specific. If you are acknowledging work well-done, don't just say, "You did awesome with project X". Describe the situation, describe what the individual did to move things in the right direction, and explain the individual's impact. The same thing goes for feedback for improvement. Thinking through the details increases the chances that the feedback will be taken seriously and will be found to be useful. This framework is called SBI (Situation, Behavior and Impact).

  Be Flexible. Be prepared to change your mind. Sometimes we don't have the complete picture of a given situation.

  Checkout our blog post on Managing 360 Feedback and how ManagerApp's Performance Module can help you collect 360 Feedback.

• Hold Regular Performance Check-in Conversations

  • Monthly alignment check-in conversations.

  These check-ins are for light-weight, ongoing conversations which will help you and the direct align expecations, and correct course if necessary. The check-ins are also for sharing feedback from others and coaching.

  The goal of these regular conversations is to ensure that your team members are performing at their grade. You do this by giving both you and your direct the chance to pause and reflect on their progress in different areas of their core responsibilities. Having these conversations monthly promotes strong alignment of goals and the ability to correct course as necessary.

  The Monthly Check-In conversation is not a weekly 1:1 meeting. It is important for you to make sure that your direct understands the context for these check-in conversations and comes prepared. Here are some of the things both you and your direct need to be prepared to discuss:

  Come prepared to review and grade their performance in each area of their core responsibilities. Are you concerned about the progress or direction of any of the OKRs? Agree on related action items.

  Come prepared to share 360 feedback with your direct and agree on follow up action items. I highly suggest compiling this feedback in SBI (Situation, Behavior and Impact) format before communicating.

  Check-in conversations focus on longer term (quarterly, annual) goals. You and your direct should come prepared to discuss potential long term projects aligned with your direct's career growth

There are a few key ingredients for a performance management process that is effective at growing team members: Goals, Feedback and Frequent Check-ins. Making performance management a continuous process and not a once-a-year thing is powerful. As a manager, focusing on how you can help grow the individuals on your team so they can achieve their best is what this investment is about. It is important to separate performance management from promotion and compensation conversations which will serve as a distraction.

Managers App's Performance management tools allow managers to run a continuous performance review process, collect data in real time and address issues without having to wait for weeks or months. Managers can define areas of responsibilities and levels so team members know what is expected of them. Peers can provide feedback when they actually have it instead of waiting for the right calendar date.  You can sign up for FREE with ManagersApp today.