How to give a meaningful performance review
Updated: Dec 31
You’ve done it. You’ve used a PI Job Target to pinpoint exactly what you’re looking for in a candidate, you’ve found that candidate, and they’ve joined your organization. It’s all smooth sailing from here, right? It’s time to sit back, relax, and watch your new employee take the world by storm and exceed all expectations. Unfortunately, that’s not quite how it happens.
In reality, while finding the right candidate is the first piece, there’s much more to the puzzle. Your new employee wants to make a splash and show you that you made the right decision in hiring them. But how do they do that? And, perhaps more importantly, how can you show them how to do that?
Setting metrics for success
“Class, meet Lois.”
Dr. Patricia (Trish) Gorman, Managing Director of the Goff Strategic Leadership Center at the David Eccles School of Business at the University of Utah, began a lecture by introducing the class to Lois, a project manager at an established national vacuum manufacturer. Lois had been tasked with revamping an existing product line and had been given three possible options to pursue: 1) increase the company’s number of distributors, effectively expanding the company’s reach; 2) re-work the existing product to make it more affordable; or 3) re-work the existing product to make it more exclusive.
Dr. Gorman gave each student a sheet of paper with a list of 96 possible actions Lois could choose to perform first in her endeavor. The list included things like discovering allies and enemies, throwing a pizza party, researching prior product revamps, selecting a team, and scheduling meetings with higher-ups to get more information.
The students were put into groups of two and instructed to decide which of the three options they’d like to pursue. Then they chose the five most important activities from the list and put them in order of importance. They were also told they could add anything they’d like to the list.
After 10 minutes, there was a group discussion, and students were given the opportunity to present their findings to the class. No two groups chose the same activities, which was expected. However, to the dismay of the class, Dr. Gorman informed them that no one had come up with the answer she was looking for. She explained that while there’s no one right answer—and that many of the things on the list were valuable and important—there was one essential thing missing from the list.
“The first thing Lois should do is ask for clearly-defined success metrics.”
Step 1: Establish clearly-defined success metrics.
A recent LinkedIn study showed that a plan for the first few weeks on the job ranks third on the list of what new hires said is most important during onboarding. What ranked higher? One-on-one time with their direct manager and an outline of performance goals.
It’s clear employees want to know what’s expected of them, but how can you accomplish that?
Before your new hire starts, make a list of key areas of responsibility. Ask yourself: If this employee was a CEO of something, what would that something be? Then define what success looks like for those responsibilities. For a customer service representative, it may be a certain customer satisfaction rating or a number of cases successfully solved. For a recruiter, it might be time-to-fill or quality of hire. Make sure these metrics are shared with your new hire during onboarding.
Step 2: Host meaningful performance reviews.
Your new employee now has a clear understanding of what’s expected of them in their role. The next step is to establish a meaningful performance review system—which is much easier said than done. One survey found that 87% of both managers and employees characterize annual reviews as ineffective and not useful.
How can you establish an effective performance management system?
The PI Science Team found there are four elements that comprise a solid performance review:
1. The process is fair.
Setting performance metrics allows for more objectivity during performance reviews. When measures for success have been clearly established in advance, employees can rest assured the review will be fair.
2. Performance counts.
There should be rewards for meeting goals—and consequences when metrics aren’t met. This establishes the mindset “Performance counts.” Employees can be certain advancement is the result of performance, not politics.
3. Managers come prepared for the review.
As the saying goes, “Preparation is the key to success.” It holds true for performance reviews as well. When managers are prepared for the review, the time spent is more productive.
4. Reviews are tailored to the employee.
Not all of your employees receive feedback and coaching the same way. By taking time to understand your employees’ drives and needs, you can tailor the review to their individual personality. This custom tailoring improves the effectiveness of the review in your employees’ eyes.
Wrapping it up
Hiring the right person is just the start. Your employees want to know what’s expected of them and how they’re doing. With preparation, it’s simple to define metrics for success and provide employees with timely, meaningful performance feedback.