Performance reviews are riddled with biases. Well, at least the traditional annual reviews where employees are rated on subjective terms. And that's one of the biggest downfalls of reviews. 51% of employees, according to Globoforce, see their reviews as inaccurate because they're based off of assumptions, biases, and opinion.
The first step to removing false information in reviews is to make them data driven. With facts, it's difficult to say someone hasn't met their goals if they closed 40 sales when their initial goal was to close 30. Here are the steps to eliminating any biases in performance reviews:
1. Be transparent about company goals
Employees need to understand how their work impacts the business. In fact, only 7% of employees fully understand their company's business strategies and what's expected of them in order to help achieve company goals, as Robert Kaplan and David Norton point out in their book, The Strategy-Focused Organization.
When employees know what the company's path is, they'll have a clear understanding of the why behind what they're doing. At the end of the day, the clearer the goal is, the better the chance that it'll be achieved.
2. Set your own team goals first
Now that employees know what the overall goal of the company is, you'll need to set goals for your entire team. If you're in marketing, this could include driving 1000 leads in one month. If you're in sales, maybe it's closing 50 mid-market accounts. Whatever it is, be specific and quantifiable (we'll get to that later).
Why team goals first? Well, you can't align an individual's goal to the larger company goals unless the leadership team establishes their own objectives.
3. Collaborate with individuals for their goals
Keep performance reviews from being a one-sided conversation by getting your employees' input for their goals. It should be a give-and-take process. And because now you've already communicated both the company goals and team goals, you can work together to come up with individual ones.
Ask your employee how they think they can contribute to the overall business objectives. Most of the time, they'll play it on the safe side, so nudge them a little and make that goal more aggressive. Instead of 1,000 new sales leads, why not 2,000?
4. Make each goal SMART
What the heck is a SMART goal? They're just what you need to create concrete goals:
Specific: Focus on a distinct task so employees know exactly what they're aiming to get completed.
Measurable: By making goals measurable, you'll have a clear benchmark to know if they've hit the target or if they still have work to do. Basically, make the goal quantifiable.
Attainable: Create goals that are achievable, not impossible.
Relevant: Your employee's goals should contribute to the company's overall goals, so only choose ones that will help further larger organizational objectives.
Time bound: Give employees a fixed period of time to complete their goals. You'll never accomplish anything if there's no deadline.
Making goals SMART helps make them easily understandable for employees and allows everyone to be efficient in driving towards the bigger picture.
To break everything down, if a company's goal is to gain 200 customers in one quarter, then a team goal can be something like drive 1000 leads. And on the individual level, it dives even deeper with something similar to "Drive 100 leads through email marketing campaigns in one quarter."
And now that every employee has a SMART goal, they can continue to keep track of their progress over time. When the reviews roll around, there won't be any surprises or misrepresentations of their performance.