The Effective Guide to Building Performance Reviews

Why it is important to get it right the first time for employee growth and retention

“Performance Review” is one of those terms that brings with it a host of anxieties to employees and managers alike. Many companies have started a rebranding campaign to try to reduce the emotions that accompany Performance Reviews. Often this takes the form of check-ins or performance conversations. This rebrand regularly ends up muddying the waters with diversion tactics instead of addressing the root issues of the out-of-date Performance Reviews. Companies will take this quick fix approach which makes things worse because employees will then expect a constructive, engaging, and streamlined process when the rebrand occurs. When these expectations are not met, employees become even more disengaged and are more likely to move on. On the other side of the spectrum, you have new companies completely foregoing Performance Reviews because they see them as ineffective, or worse, destructive.

The recent HR scandals surrounding UBER are a great example of this. Performance reviews were deprioritized and/or rebranded to serve a corporate culture purpose, and the result was sprawling, systemic damage. This is exactly the sort of problem that structured, positive, 360 degree Performance Reviews can detect and deter if implemented correctly from day one.

Why We Did It

Last year I set out to implement a proper performance review system. I started by asking questions like: What type of feedback system do we want to implement? Should it be formal or informal? How often should it be done? Where the hell do I start? When I started this process we were a startup of roughly 14 people in two countries and were struggling with the idea of implementing something that felt as corporate and process-heavy as Performance Reviews. The dilemma resolved itself when team members began voicing concerns during informal 1:1s about a lack of structured feedback, which was impeding their professional growth.

What We Did

Before we implemented anything, we held on all-hands meeting to discuss Performance Reviews. We really wanted to make sure the team knew that we had heard them when they asked for formal feedback, that we were going to address these concerns with Performance Reviews, but by no means was it the end product. We wanted the team’s input and feedback in order to make Performance Reviews as valuable as possible. This really helped set the tone for the whole process as a constructive, whole team process where anyone could have input into how it would be built and run.

The next step was building the comprehensive, structured, positive, 360 Performance Review system. In order to ensure team members felt comfortable giving peer, leadership, and company feedback, we broke up the Performance Reviews into four areas: Company, Leadership, Peer, and Employee.

• Company Reviews are a structured anonymous survey for everyone to give open, honest feedback on how they feel the company is doing. It also addresses topics like transparency and growth.
• Leadership Reviews are another structured anonymous survey to give feedback to the leadership team (founders and team leads), and specifically discuss areas for improvement.
• Peer Reviews are quantitative and qualitative surveys designed to give teams the chance to give anonymous feedback to cross-functional teams. Peer Reviews are anonymous to team members but not to the Operations Lead. This is to make sure all feedback is constructive.
• Employee Reviews are done by each employee’s Manager. This is the top-down review focused on growth and areas of concern.

How We Did it

Research Phase

When we realized we needed to build something we went on a search for best practices. Through discussions with other companies our size, it quickly became apparent that no one had any “real” process in place. Our next step was to look outside our community by reading blogs, articles, and ebooks from companies, HR leaders, and anyone who had an opinion on the subject. What information we did find was directed at correcting a broken process at enterprise level companies. These processes and strategies were extremely difficult to translate to a small, agile startup.

Construction Phase

So instead of using what existed, we approached building Performance Reviews like we do everything else in a startup — we tried something, got feedback, and iterated. In this case, our customers were team members and their managers. Our first step was figuring out how often we wanted to hold Performance Reviews. Annual was out the window as it did not provide the feedback our team needed. Monthly would require too much time from both managers and team members. After some discussion we settled on a quarterly Performance Review timeline. This allowed us a tighter feedback loop without overloading our team.

Iteration Phase

Our first version of Performance Reviews occurred at the end of Q2 2016 and it was awful, BUT it pointed us in the right direction. With a lot of open communication before and after about how to improve, we were able to iterate quickly and create a better system. For our Q3 iteration I was able to address the issues that came up the first time. And it was better, BUT again, we received a lot of feedback from our team on how to improve. We missed Q4 reviews due to major time constraints on my time and the black hole that is the Christmas Season. We approached Q1 reviews feeling pretty good on how they would work. We had changed a lot around peer feedback and how the 1:1’s were structured. We optimized to remove problems and maximized team participation. Of course we got a bunch of great feedback on how to continue to make it better and we are integrating this feedback for our next round of reviews for Q2.

We created all of our surveys in Google Drive. I (People Operations manager) was the only person to have access to the raw data, this helped me vet for negative or malicious feedback. Once all the data had come in I would aggregate everything into specific employee folders, ensuring anonymity along the way and setting up all 1:1s between managers and employees. By having a single point of contact (me) I was able to ensure that everything was being taken care of in a timely manner and every employee received the time allotted to them. This was especially important in our first couple of rounds for a three reasons. First, I was able to control the flow and make sure managers and employees were successful in their meetings. Second, I saw first hand what worked, what didn’t and where to focus efforts next time. Third, it allowed me to see how managers and team members handled themselves in 1:1s, which was great for giving managers feedback on how to communicate with their direct reports.

Collecting Feedback

When we started building Performance Reviews we knew that team feedback would be required to ensure success. By building team feedback into the process at every stage we were able to ensure buy-in and increase the success rate of each iteration. To collect feedback I devised three main sources. First, I created an anonymous survey for everyone on the team to fill out the day after their 1:1 was completed. Second I held 15–30 minute check-ins with team members to solicit direct feedback and concrete action items. Third, I held a formal retro with the management team to discuss their strategies, pain points, roadblocks, and improvements for support. My focus for all three sources of feedback was around smoother rollout, better support, and time reduction.

Results

As the process grew from our first iteration to our third, we were able to track team member growth in a tangible manner. With the data points in front of us we could look at what areas team members were progressing in, which areas still needed growth and how we could support each individual in their career path. Performance Reviews have become one of our best tools for working with our team to create actionable plans for career growth, leadership training, and increase accountability for our leaders.

After implementing Performance Reviews we have noticed a significant increase in employee engagement, happiness and growth. Another benefit is more feedback is being given freely within the team laterally and vertically. On the management side, we have been able to define roles better, increase ownership of teams, and begin a stronger campaign of feedback coaching for everyone.

TL;DR

Performance reviews are critical to providing feedback to employees and leaders but also to empower employees to voice opinions and concerns on what is happening within their company. Performance Reviews are hard to implement and it takes time to get them right. Once you have them in place you must continually update them to reflect your growing team. But, it is a lot harder to implement Performance Reviews when you are a team of 100+, so by building it early on you can grow the process with your team. This saves a lot of headaches and employee dissatisfaction later on within the company.