Implementing a performance evaluation system
It is essential for a company and its employees to have a performance evaluation system. Indeed, how can you measure talent, organize teams, or understand your organization if you don’t take stock regularly? Therefore, any company that does not have such a process, or that finds its current system ineffective, should very seriously consider implementing the performance evaluation system that matches its needs and will help it achieve its objectives. In this article, we will describe what such a process is for, what different systems exist, and finally how to implement them.
What are the objectives of performance evaluation?
This HR process, practiced in the vast majority of companies, aims to stimulate employee motivation and increase their engagement within the company, while boosting its overall performance.
For the company, such a system notably allows for better distribution of objectives throughout the organization and ensures their cascading deployment. It is also a means of obtaining a clear picture of talent, which enables resource allocation based on skills, or the definition of action plans (retention, mobility, career development…) tailored to employee profiles. The evaluation process can also serve as a basis for decisions regarding employee compensation. Indeed, it is based on the results of this evaluation that the employer can decide to award a bonus or a raise to employees.
For the employee, a performance evaluation system, when well designed and executed, is an effective means of developing their skills, gaining self-awareness, and better managing their career. It presents areas for improvement on which they can work or seek help. It also provides the employee with greater clarity about what is expected of them. Finally, an evaluation interview conducted by a competent and effective manager will be an opportunity to give the employee the recognition they so greatly need.
The different performance evaluation systems
For decades, the most common model has been the annual performance review. This is an annual, or even biannual, individual interview during which the manager reviews the past year with their subordinate. It is an opportunity to analyze the achievement of the year’s objectives, assess the employee’s skills, and define objectives for the coming year. A well-conducted individual performance evaluation interview also includes an analysis of training and development needs, as well as an outlook on career prospects. The completion of this interview should be formalized through a form or an online platform.
To refine skills assessment, many companies have developed a catalog of critical competencies for their industry: vision, decision-making ability, communication… These guides precisely describe the necessary competencies and their evaluation parameters. The catalog often includes suggestions (development actions or training) to help the employee develop their skills.
An evaluation system is also defined by its outputs. Will it serve as the basis for annual raise decisions? Do bonuses depend on it? Should it help define the annual training plan?
Often criticized, this evaluation system is now being challenged by many companies. HR departments and employees criticize it for its lack of effectiveness and objectivity. New practices are therefore emerging. Each organization is free to adopt them to enrich its annual evaluation system, or even create an alternative system.
You can therefore replace annual performance reviews with quarterly interviews, combined with a weekly one-to-one conversation between the manager and their subordinate. You can also enrich them with 360-degree feedback, which also requires evaluation from the employee’s peers or even subordinates.
Finally, millennials are increasingly requesting continuous feedback, making the practice of an annual review obsolete. Continuous feedback is more agile and more impactful because it is more immediate. It can be given during regular meetings or through a mobile application, and can be cross-functional throughout the entire company.
How to proceed with implementation
As with any project, you must first analyze your needs. Which performance evaluation system will be most relevant in your organization? What do you expect from it?
Using this analysis, you can define the process that best suits you, by combining different existing systems, or by creating a unique model. All parameters must be determined: format, medium, content, indicators, frequency… Using a flowchart, you can then establish the process throughout its entire cycle, without forgetting the outputs you expect from it.
Once this theoretical work is completed, it is time to develop the various associated tools. Will you conduct performance evaluation via a paper form, software, or an application? Will you adopt a rating scale? If so, which one? Do you want to produce a skills catalog?
Finally, there is a crucial step, often overlooked by companies, yet the entire success of your process depends on it: employee training. They must of course understand the new performance evaluation system you are implementing, but also master all its components. Managers must absolutely know how to set objectives, give feedback, and suggest areas for improvement. Managers are the critical actors in this process, so you must ensure they have all the tools at hand to guarantee its effectiveness.
Implementing a performance evaluation system is a major undertaking. But it is so crucial for your organization that the energy you invest in its development will be amply compensated by the value it will bring. If you need advice or personalized support for this implementation, our experts are here to help!
If you need advice on rethinking a new work organization, don’t hesitate to contact us.
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