How HR Can Use Performance Reviews to Help the Whole Company


It’s not hard to understand why an increasing number of companies are choosing to do away with annual performance reviews: according to one study, over 94 percent of employees would prefer their manager address feedback in real time rather then wait until the end of the year.

But annual performance reviews aren’t all bad. Formal ratings provide a macro-view of performance and engagement levels across the company. If the results of any group (department, experience level, etc.) stick out—it can indicate a bright spot or potential problem worth looking into.

And that isn’t the only benefit of an annual performance review. They key to their success is to utilize them not just at year-end but throughout the year, as well.

Here are three ways to use your performance reviews to ensure your employees have the skills they needs to succeed.

1) Fill Talent Gaps With Highly Rated Employees

Take note of employees that consistently earn a score of «above expectations» on their annual performance review. These are the employees you don’t want to lose, so you should work with them to plan out their career paths and make sure they see a future for themselves at the company. What skills do they already have that make them shine? What skills do they lack that they need to advance?

Make a plan for these high performers to both gain new skills and to use their current skillset to help the business. Speak with them. Let them know they have great potential and you’re there to help their careers while also helping the business grow.

This is also a good time to use talent management software: If you incorporate your performance reviews into the software, you can get automatic reports that show talent gaps, track goals and provide reminders of what skills employees need to be focusing on to fill those gaps.

2) Put People Where Their Skills Are Most Needed

We tend to focus on the high potential employees—as we should—but just because someone merely meets expectations in their current job, doesn’t mean they don’t have potential.

Just like you did above, take a look at the gaps in skills and the successes for each employee. If an employee scored «above expectations» in two categories and «meets expectations» in four what can you do to take advantage of those «above expectation» skills? This may indicate a time for a reorganization to put people where their skills are most needed.

There’s nothing wrong with saying, «Jane, it’s obvious that you weren’t meant to be a procurement specialist, but you do have strong skills in this area. Would you be interested in working towards a career change?» Jane will probably be thrilled that her less than stellar review isn’t seen as a sign that she’s a bad employee, but that she’s not in the best role for her.

Again, a good talent management application can help with this by keeping you aware of what skills people are working towards and what departments need these skills. Managers only see their own employees, but HR should take a look at the business as a whole. There’s no reason to keep people in their current jobs if they would help the business more in a different position.

3) Prepare for Changes Ahead

The only guarantee when it comes to talent management is that your company and it’s needs will change in the year ahead. You may have some idea of how that will happen: Are you scaling-up or cutting down? Is there new legislation that will impact the business? Whatever it is, change will happen. By taking a look at the annual performance reviews you’ll be able to identify looming skill gaps in the business and proactively make plans to fill them.

This information can help you develop training programs and better target your recruiting. You know what skills your company has and where the business lacks strength. You can’t expect to find perfect people off the street for every position, but if you take the time to review the performance reviews, you’ll know how best to target job candidates and can start working on training your current employees.

Don’t let your employee performance reviews just sit until next December. Take a good look and help your business by recruiting, training and developing people so your business has the skills it needs to succeed.

The Next Employee Challenge: Loneliness In the Workplace

Loneliness is not the same as being alone. Being alone is … being by yourself. If you Google loneliness, it’s being “sad because one has no friends or company.” Often, we talk about loneliness in terms of older people. In the New York Times article, “The Surprising Effects of Loneliness on Health”, the author shares that loneliness can raise stress levels, increasing the risk of heart disease, diabetes, and dementia. 

The truth is there’s no rule that only old people get lonely. My friend Dan Schawbel has recently published a book titled “Back to Human: How Great Leaders Create Connection in the Age of Isolation”. If you’re not familiar with Dan’s work, he has two other New York Times best-selling books: “Me 2.0” and “Promote Yourself”. He also did an interview on HR Bartender a few years ago about reinventing your personal brand

Anyway, back to the book. In “Back to Human”, Dan suggests that our increased use of (and addiction to) technology is a key contributor to loneliness. And when people are lonely, it has an impact on their work. Totally makes sense. The solution? Create more connectedness at work. Frankly, that’s easier said than done.

If you’re wondering how connected you are right now with your co-workers, the book offers information about an assessment called the Work Connectivity Index (WCI). This could be a great starting point in your journey toward creating a more connected workplace. 

I don’t have to tell you that having a company culture where employees feel connected is going to result in greater engagement, higher productivity, and increased retention. The question is how to move from “unconnected” or less connected to more connected. In his book, Dan talks about focusing on the employee experience in three specific areas.

Culture – The book shares a few stories about the advantages of creating a company culture that on the surface might seem “cult-like” with its unique jargon and traditions. And I don’t mean that in a bad way. When employees feel like they’re part of the club or part of the team, private jokes can bring the group closer. Obviously, the situation must be monitored so it doesn’t cross the line toward being a clique. 

Relationships – Years ago, I went on a job interview for a hotel leadership position. During the interview, I was given a tour. We were walking though the kitchen when an employee asked who I was, and the general manager told them. Then the employee said to me, “I hope you come to work here.” And gave me a hug. I got that job (and I took that job) because I felt like I was working with family. Relationships matter. Simply working with someone on a project isn’t the same as having a relationship with them. Managers and employees need to build relationships.

Space – Let’s face it, our physical work space is important. If we’re not comfortable, we can’t do our best work. And if we’re not comfortable, we won’t feel like building relationships with anyone (see #2 above). Organizations need to provide employees with work areas that have proper ventilation, lighting, and ergonomic furniture. They also need to provide current technology so employees can be effective.  

My takeaway from Dan Schawbel’s book “Back to Human” isn’t to eliminate technology. It’s to do a better job of working with it. As more organizations find themselves in the midst of a digital transformation, I see “Back to Human” being required reading for managers and leaders. Organizations must take a proactive approach and create a more connected workplace.