A People Operations Approach to Performance Reviews
Learn how putting your employees first and adjusting your performance reviews can improve productivity and profitability.
Here's what you need to know:
- When conducting performance reviews, you should focus on performance alignment
- Performance alignment allows you to align your employees' development and performance with company goals
- Performance reviews and check-ins should happen frequently and consistently
- Treat your employees like equals who have their own perspectives
- The managers in your company need to fully understand company objectives
Every company should have some sort of performance review process in place to help measure your employees’ strengths and areas of improvement. A common issue companies face is that their rigid performance management review systems simply don’t adapt to the needs of today’s modern workplace.
One solution is shifting from a performance management perspective to performance alignment. In this article, we briefly explain:
- People Operations
- What performance alignment is
- The key differences between performance management and performance alignment
- How to make the shift
What is People Operations (POPS)?
First of all, in order to create performance reviews from a people operations perspective, it’s important to understand what POPS is, and the differences between human resources and people operations.
People Operations puts employees first and sees people as your company’s most valuable resource.
Put simply, People Operations puts employees first and sees your people as a company’s most valuable resource. People Operations focuses on creating a company and work environment that is engaging and rewarding to increase productivity and profitability — all of which is data-backed, instead of driven by gut feeling.
Human resources tends to be more process-oriented, compared with POPS, which is more results-oriented. Both are important for a business to run smoothly, and some smaller companies might have the same team or person doing both functions, whereas larger companies might have a dedicated HR resource and a dedicated people operations resource.
The evolution of reviews from performance management to performance alignment
Traditional performance reviews happen once a year. Typically, they have been used to determine whether or not an employee should be kept, promoted, or terminated.
Many companies are now evolving their performance review process because the research tells us that this type of performance management does not engage workers or drive productivity.
Performance reviews can be used to help managers track their employees’ work, their impact on the business, and their growth. To evolve the traditional process, companies should adopt a people operations-focused review process, and focus on performance alignment.
Traditional performance management doesn’t engage workers or improve productivity.
What is performance alignment and how does it differ from performance management?
Performance management is a formal review that happens annually, whereas performance alignment happens more frequently, and more informally. The biggest difference is that performance alignment is a framework that is more transparent, agile, and allows managers to align their employees’ development and performance with the larger goals of the company.
Meetings to keep people on track
Having more frequent meetings allows for more performance assessments to make sure employees are on track and meeting expectations, instead of a potential surprise at the end of the year.
Employees want more check-ins and ongoing feedback.
More check-ins are what your employees want: “81% of employees agree or strongly agree that regular employee check-ins’ and ongoing feedback are effective ways to drive employee engagement and productivity.” While more frequent meetings might seem like more work and time, your company will benefit. After switching to more informal and frequent touchpoints, GE saw a fivefold productivity increase in 12 months.
Both frameworks strive to create a productive environment, but performance alignment puts a specific emphasis on providing a clear direction to employees, and setting expectations. The below chart outlines more differences between performance management and performance alignment.
How to shift from performance management to performance alignment: The 5 pillars
When making the shift from performance management to performance alignment, there are several factors to consider, some of which might already overlap with your current performance management process.
A successful performance alignment strategy includes the following 5 pillars:
- Aligns to your overarching business goals and values
- Occurs frequently and consistently
- Is measurable and adaptable
- Drives the intended actions
- Treats your people like adults
We’ll briefly cover these pillars, and then explore how your company can create a performance review program that shifts towards performance alignment.
1. Aligns to your overarching business goals and values
The first step is to align each employee’s work with the company’s larger vision, by using cascading goals. What this means is those in the highest company positions set strategic goals, and then everyone who falls beneath them has team and individual goals to meet the broader strategic goals.
2. Occurs frequently and consistently
Simply put, this means frequent communication and meetings between managers and employees. These meetings don’t need to be formal; in fact, they can be informal with a casual tone, because communication in any form is important. Some cadences we recommend include:
- Weekly one-on-one conversations
- Monthly one-on-one conversations
- Quarterly peer-reviews
- Semi-annual performance alignment
Read more about our recommendations for meeting cadence here.
3. Is measurable and adaptable
Aside from your goals being SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound), it’s important that they’re also adaptable. Rather than goals being rigid (which is a characteristic of traditional performance management), the performance alignment approach allows for the adaptability of goals as business needs change.
Your goals should be adaptable to business needs.
If employee goals need to change, managers should meet with their subordinates to let them know of these changing priorities, and in what way the employee’s goals will have to change, so everyone is back in alignment. If goals don’t need to change, it’s valid to evaluate them based on their already set goals.
4. Drives the intended actions
This pillar means that performance alignment drives the intended actions, because it’s easy to intentionally drive the wrong actions. To make sure everyone is working towards the intended actions, it’s important to set very clear expectations and processes, and go through a mental exercise to see how employees might interpret documented goals, and address any potential confusion.
5. Treats your people like adults
Finally, how you conduct your performance reviews is one of the most important aspects of review alignment. This means treating your employees like adults, who are equals, with their own perspectives.
To ensure you’re satisfying this pillar, there are important practices that should be included in your feedback process:
- Be open, honest, and show genuine concern for success: This means providing feedback, even if they’re small areas of improvement.
- Connect in person (or Zoom call with video on): Meeting with employees face-to-face (or via video chat with your camera on) when delivering feedback is key.
- Embody the value of the company in your presence: Delivering negative feedback is the most important time to demonstrate leadership and loyalty to your company values, by doing so respectfully.
- Provide clear direction and positivity: When delivering negative feedback, provide a clear direction and make sure to frame the feedback in a positive light. In fact, 92% of employees agree that “negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”
Putting it all together to create your performance alignment process
After reviewing the 5 performance alignment pillars, and aligning your company goals to individual performance, you can now create a performance review process that is people operations-focused.
The key takeaway here is that creating a people operations approach to performance reviews is far from a one and done deal. Your company is committing to a continuously evolving your performance alignment process as your company goals change over time. Your employees will require different support, and their personal goals will also change. By keeping your performance alignment strategy fluid, your workers will remain engaged and productive.
This in-depth guide covers all the nitty-gritty details of shifting to performance alignment, and below we cover the key steps.
1. Understand your organization
Your company’s objectives should be clear and concise; clear enough that they could fit on a 1-page list that includes your company’s mission statement and goals. It’s also important to understand your organization’s structure so communication channels can be created between levels.
2. Take stock of your employees’ performance
Before you can fully shift to performance alignment, you need to understand the existing team and their challenges. This will help you make the necessary changes to your current workforce, and know if you need to bring on new people, offer more training, or make any other changes to help with productivity.
3. Focus on your managers
You need your managers to fully understand your company’s objectives, and be on board with any changes your company might need to make.
4. Link employee goals to company objectives
Each employee will need a one-on-one goal-setting conversation to make sure they’re aligned with company goals.
5. Foster a welcoming and productive work environment
This means setting up a physical space that is conducive for good work, such as reducing clutter, using natural light, and ensuring every meeting has a purpose.
6. Invest in your employee skills
This includes training, mentorship programs, and investing in online courses or platforms for your employees.
7. Boost collaboration
This means collaboration across the entire organization, including different departments, and managers.
8. Revise onboarding and recruiting
New hires should also be included in performance alignment. When recruiting, job descriptions should mirror company objectives, and new hires should be provided with milestones.
9. Realign your benefits
This means providing benefits to employees that match their needs. Doing so can increase their productivity, and allow them to better focus on company objectives. Keep in mind that sought-after benefits have changed drastically since the start of 2020, when the pandemic began. Your benefits should remain flexible.
10. Go digital
Digitizing your performance alignment makes it possible to integrate continuous feedback, including 360 reviews, benefits enrollment, and onboarding.
11. Reevaluate regularly
You’ll need to review and adjust goals and objectives on a consistent basis, as well as get employee feedback regularly.