It's that time of year again: performance review season. The formal review can be a slog—a “check-the-box” exercise that doesn’t drive real value. Over half of surveyed employees say that formal performance management processes, like reviews, have no impact on employee and company performance.
What if review discussions could instead be a catalyst for growth, purpose, and connection? The following actions can be used to help managers and employees make the most of reviews.
Growth
A performance review is unpleasant—and a failure—if the only agenda item is sharing results in a one-way diatribe. Two-way dialogue should be strongly encouraged, allowing employees to shape and take agency in their future performance.
Managers: Great feedback highlighting strengths and opportunities to improve is a gift. Namely, McKinsey uses the observation, impact, listening, and solutions plus strategy (OILS) framework to nurture a feedback culture. The real magic happens when managers engage employees on the root causes of past challenges and cocreate a path forward focused on the underlying skills required for success.
For example, a manager of an employee who consistently delivers work late might say, “One of your biggest areas of opportunity is submitting reports on time, which impacts our ability to sufficiently review before the meeting and have productive discussions. What do you think will be most helpful in solving this?” Once the two-way dialogue starts, managers can probe on the skills that require the most support—whether time management, prioritization, or communication—and collaboratively develop an action plan to close those skill gaps.
Review discussions should also be forward looking and help prioritize for the next period. What are the highest priorities, specific targets to hit, and timelines? Share this information with employees, then work together to identify roadblocks, how to avoid them, and where employees need support.
Employees: Consider what you want to accomplish in the next 6-12 months. What skills and knowledge are you excited to develop? Then, ruthlessly prioritize your list and make it tactical. If seeking promotion, find opportunities to demonstrate that you’re operating at that level based on its job description. Also, send a brief recap of your plan via email to your manager so you can monitor your progress together.
Purpose
Employees who find a sense of purpose in their work report more positive outcomes in life and work alike (e.g., greater energy, health, and resilience; more pride in and connection to work). However, just 15 percent of frontline managers and employees say they’re living their purpose at work. Performance reviews can be an excellent opportunity to foster greater understanding of and connection to purpose.
Managers: Set aside time before the review discussion to clearly articulate how the employee’s work directly impacts the organization’s purpose and mission. Research shows that when people know the impact of their work, they feel greater responsibility and motivation and they perform better.
During review conversations, share how their work matters—with concrete examples—and discuss their individual purpose and how to further amplify it next year.
Employees: As you reflect on your performance, consider what made you feel the most meaning, energy, and pride. Sources of meaning could include contributing to society, supporting one’s family, or serving customers. With your manager, identify what matters most to you and how you can focus on it moving forward.
Connection
Performance reviews can feel “strictly business.” However, checking how employees are doing personally is essential during this often-stressful time. Managers have an outsized impact on employee satisfaction but only spend a quarter of their time focused on people. The review conversation can be a launchpad for greater individual support moving forward.
Managers: A simple “How are you doing?” can go a long way. Based on the employee’s response, you can create a plan together to address work obligations and personal needs (e.g., different hybrid working arrangements, moving standing meetings during recurring doctor appointments). If the employee doesn’t divulge much, gently remind them of the resources available to them to manage personal needs.
This also is an opportunity to define the right feedback cadence based on the business calendar and employee development goals. For some projects, daily feedback is required. For others, feedback every other week makes the most sense. But we strongly recommend checking in at least weekly—even just on a personal level.
Employees: It can be challenging to speak candidly with your manager about things happening outside of work. However, people largely have the same psychological needs, so it’s unlikely you are the first person to ask for additional support. If you don’t feel comfortable speaking to your manager directly, reach out to HR to ask for the right resources.
We would be remiss to address performance reviews—often rife with personal bias and misguided decisions—without advising to check your own and others’ biases. McKinsey’s 2023 Women in the Workplace report found that 87 women were promoted to manager for every 100 promoted men, and the gap is even bigger for women of color. Managers should understand common biases and how they affect performance assessments; provide clear rationale behind evaluations and promotion recommendations, including specific measures of impact and behavioral examples; and ask colleagues to do the same.
Performance reviews are a formal opportunity to not only consider the year in review, but also set yourself and your team up for a strong, supported year ahead. Our next blog post will offer guidance for effective goal setting. If you are excited about driving greater growth, purpose, and connection at work, do not let this opportunity pass you by.