Performance reviews might seem simple and self-explanatory at first, but they require careful preparation beforehand and detailed analysis afterward. Team leaders might feel they know which employees are doing better than others (and they’re usually correct), but it would be dangerous to improvise reviews without objective performance metrics to guide the discussion. When performance management data points are the topic of conversation, managers and employees are “on the same team” trying to improve those numbers. Without hard data, the review process feels subjective and arbitrary, and it’s a missed opportunity to develop and motivate the workforce.
If performance issues go unresolved, then data from reviews will help to guide and justify decisions around layoffs and terminations. Before you can begin to leverage performance reviews, you’ll need to find a system for collecting the data most relevant for your company. As much as possible, the metrics should be standardized across each department. But what data should you be collecting?
Performance reviews are a great opportunity to address relatively minor issues that you wouldn’t want to tackle on a daily basis. If an employee shows up for work late on rare occasions, that may not be a problem, but as late clock-ins become more frequent, management will eventually need to respond. Depending on the metrics your company tracks, arrival times, lunch hours, daily breaks, and overtime could need to be addressed, but it would be an inefficient use of time to address them on a daily basis. For most employees, showing up on time will be a routine, and it will not need to be a heavily weighted aspect of reviews. A performance management system that is integrated with your time and attendance tracking software will do the heavy lifting for collecting this data.
The data points for the quantity of work will vary greatly between industries and departments. Your sales team may have a quota of calls or contacts, and others may have a production role with a certain measure of output expected. Completed tasks, reports compiled, or forms submitted: most employees will have a role that can be measured in standardized units. Some difficult tasks will naturally take more time than others, but a radical difference in the weekly output of two employees should be investigated. When employees are assessed with quantitative reviews instead of subjective summaries, it’s easier to identify employees with greater untapped potential.
Quality of work
Quality is another metric that varies widely from one industry to another. If there’s a Quality Assurance phase built into your chain of production or services, then existing QA scores can be sorted for individual employees. If clients complain or call back with compliments, then it’s worth tracking which individuals tend to elicit those positive or negative responses. Often, there will be another metric like “dollars in sales” or “return customers” that tends to reflect the quality of an employee’s work. It’s important to motivate employees to work well and not simply to work fast, especially if quality work or service is part of your company brand.
To improve the efficiency of an organization, you’ll need to address collaboration between teams and management, as well as individual performance. While they shouldn’t be done too frequently (once or twice a year is sufficient), peer reviews are great for identifying which employees are adept at collaborating with others. If subjective opinions about other employees are given too much weight relative to tangible outputs, then intra-office politics may undermine confidence in the whole review process. While keeping the process as objective as possible, it’s still useful to include metrics that reflect an employee’s ability to work as part of the team.
How to properly use performance review data
Data-driven performance management relies on factual data to draw accurate conclusions and make informed decisions about managing employee and team performance. With the right data, performance reviews can be used to improve nearly every aspect of the employee experience— including onboarding, learning and development, and employee engagement.
Employee reviews are the ultimate tool for team leaders and middle managers looking to develop their team members. Without quantitative metrics, the review process can feel arbitrary and subjective, but meaningful data provides a framework for real objectives. When team leads and managers can position themselves as helping employees achieve goals, then an otherwise adversarial review process becomes collaborative. Employees that quickly understand the review system may demonstrate their own potential for leadership positions in the future.
When used effectively, a performance review system identifies the strengths and weaknesses of a company as it’s currently operating. By designing the system and choosing which metrics to track, choices must be made about which aspects of the process to prioritize. Trends that continue across departments may indicate where additional training could improve efficiency. Accurate data collection makes it possible for reliable analytics to guide the business toward improving efficiency and achieving future goals.