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Performance Reviews that Create Lasting ROI & 10 Considerations for Your Next Developmental Engagement?

While many managers see performance reviews as a nuisance, using the right tools to assess how your employees are doing can help you weed out the “problem children” in your organization and invest in those individuals who will create lasting ROI.

It can also help you determine if your employees are “checked out.”  The United States Department of Labor and the United States Department of Commerce estimates that just in North America alone, businesses last year alone lost more than $400B due to ‘disengaged’ employee performance! Imagine being able to catch that early and make the changes necessary to re-engage your employee or free them up to move on to a better fit.

When administering a performance review, start with the endpoint in mind, “what is the purpose of this performance assessment instrument and my performance coaching review session?”

The complexity of a performance review document, the system utilized, and the administration of the discussion can be as unproductive and meaningless to some as it can be eye-opening, revealing, and productive for others – it is all your choice.

Along with the compliance expectations that your organization may require and your life experience, consider these additional human capital development strategies. Together, they can help elevate the engagement, developmental and accountability opportunities of a performance process.

1. Values, Vision, and Mission Statement – Why does your organization exist?  The Core Values of the organization should be seen in every action, product, and behavior. Our collective values shape our organizational and individual Visions and manifest in our public statement of purpose as a Mission Statement. That Mission Statement serves as your GPS to what we should, and shouldn’t be, doing. All of this is recorded in part throughout the performance assessment instrument review process.
2. Job Description – What did you hire this individual to do? It is critical for the health of the organization and the accurate measurement assessment of the individual that a control factor be used. For example, if an individual is doing 100 percent of their job description, then they should receive a “Meets Expectations.” Providing honest assessment, narratives and score are critical for the integrity of the process!
   Make sure your Job Description or Job Expectations document is written clearly, objectively and precise KPIs that address the Tasks, Duties and Responsibilities (TDR) of that role, and, that the corresponding Knowledge, Skills and Abilities (KSA) required to perform are stipulated for measurement and understanding among all parties involved.   If they are not performing at the expectation level, then they have earned a “Not Meets or Unsatisfactory.” If someone asks how they can achieve a score greater than “Meets Expectations/Satisfactory,” the job description becomes your consistent reference source.  If they do more than their job description dictates, they will be reviewed appropriately.
3. The Player Capability Index™ Model – The Player Capability Index (CPI) is an L-Grid model that helps you to assess an individual’s ‘Aptitude’ (functional knowledge, skill, ability, IQ) and their ‘Attitude’ (passion, work ethic, commitment, desire, engagement levels, EQ) in specific situations and in their overall performance. Where an individual lands within the CPI regarding any micro-specific situation will dictate individual assessment scores within sections of your performance assessment instrument. Conversely, where a player lands within the L-Grid overall during that assessment period will serve as their macro score. Review previous leadership development articles of the Player Capability Index Model or the book The Managerial-Leadership Bible Revised Second Edition for more information.
   The power of the PCI model is ti too allows for clarity in defining the present tense needed TDR and KSA factors and in addressing future talent hierarchy needs and conversations.
   As you complete the performance assessment instrument, each measurement area should address the expectations for an individual and how they measure up against them.  You then base their overall performance assessment on the ‘Application’ of their ‘Aptitude’ and ‘Attitude.’
4. Previous Assessment – How has your employee done in the past? If available, review the last three performance assessments to explore measured KPIs and noted attributes and accomplishments. Have they exhibited excellence or mediocrity in the past, and has that trend continued?  Review the associated Performance Development Plans (PDP) that were (or should have been) created in concert with the performance review measurements. This data will provide you with objective criteria for completing the next employee appraisal as a true human capital development tool and allow you to assess unacceptable or low performance to create future growth.  Future and ongoing PDPs should be benchmarked off the performance review to ensure maximum Trajectory Calibration (refer to previous leadership development series article of Trajectory Code or the book, Your Trajectory Code, for more information). The assessment instruments’ analytics are important as an objective diagnostic. However, the detailed narrative sections from past reviews are critical for capturing behavior observations and creating action plans for the future.
   If you assess an individual for the first time within your organization, request copies of their past three performance reviews from their previous employer as a benchmark insight and developmental reference point.
5. Performance Improvement Plan (PIP) – Sometimes a PIP must be created between performance reviews or at the time of a scheduled review to address specific behavioral or performance issues. When appropriate, refer to this document during an employee’s performance assessment. Keep in mind that if the PIP details five action items and they only complete four, then they will receive a score of “Not Meeting Expectations.” The purpose of PIPs and the performance assessment instrument is to detail how to achieve and maintain excellence. When someone does not earn the score they are awarded, you dilute the developmental process, mislead the recipient, and send a signal to achieving performers that they do not matter.
6. Return to the Player Capability Index Model – The Player Capability Index Model is not just an assessment. It can also be used to create the final scope and depth of a job description and act as a reference template for completing and coaching an individual with a PDP or PIP. In addition, the PCI empowers you to accomplish another critical need: helping your employee create the greatest level of efficiency, pride, and enjoyment in what they do.
7. Self-Assessment and Peer Review – A self-assessment provides great insights when benchmarked against an individual’s job description. This can be enhanced by collecting data from their coworkers and customers to provide accurate, timely, appropriate, and thorough insights into their performance and what needs to be done to improve it.
8. ROI Bottom line – While engagement, fun, and a sense of belonging and meaning at work is essential, every individual has a revenue creation or substantiation factor they own. Whether your business is a for-profit or non-profit, each employee is responsible for bringing value to the table and serving the organization.
   For example, if your organization has a revenue-generating position (customer contact, sales, loan generation, account development, etc.), there is always an ‘x-factor’ predetermined for that salaried/compensation position. Suppose the job pays $100K a year. In that case, that person must generate ‘x-revenue’ a year to make their role a “breakeven” position and ‘x-revenue’ to be an asset to the organization.  You earn $100K in compensation, and you must generate $3M in new revenue while maintaining your portfolio. If a person is not on a trajectory to generate or surpass their target goals, then the performance appraisal must reflect this. The same holds true for any line position in an organization – always know the ROI variable!
9. Budget Ample Time to Administrate the Review – Most people and organizations’ reality is that so much is happening that the one-on-one Quarterly, Semi-Annual, or Annually performance appraisal review process is typically done late, hurriedly, and with a less than optimistic attitude. This human capital realignment and human capital development connection is a great opportunity, and it should not be taken lightly!
10. Calendar Checkup Points – To accelerate the ROI of every person in the organization, you should schedule informal check-in and checkup conversations to ensure forward movement between formal performance assessments. This also sends a signal to others that you did not mean for the time and work you placed into the performance appraisal to create busy work for anyone, but to learn in real-time how to consistently improve and work towards career aspirations. Your informal calendared meet-ups also help individuals stay accountable for their development.

Ultimately, you are working in partnership with the assessed individual to improve commitment and performance and to ensure the organization provides them with the trajectory for success. Sometimes despite your commitment to excellence, the other person may struggle. This process will also help identify when we have a person in an incorrect position. We must then decide if they have the talent and capacity to serve elsewhere within the organization (and champion that transition). If they do not, we must remove them from the organization.

While you may be used to administering the assessments for your team members, you must also receive an assessment from your supervisor to hold you accountable for your own personal/professional development.

Future-focused, present-tense-relevant benchmarked – performance appraisal assessments can deliver real ROI. When you use the right tools and have follow-through with your assessments, they will create a trajectory of success for your individual employees and your organization.

Written by Dr. Jeffrey Magee.