Accurate Performance Management

Updated: Jan 19, 2019

For as long as employees have existed, companies have had a basic business requirement to fairly review the performance of their employees in order to support reward and retention activities. Over time the mechanisms have changed, but the basic requirement has remained the same. Since the mid 20th century until very recently, performance management has mostly been slight variations of the below process:

  • Goal Setting

  • Midyear

  • Final Review

  • Rollup/Calibration

  • Signature

  • Repeat

In the last decade many companies heard the feedback from their employees and managers that this wasn’t working as well as it could have. The answer companies came up with to solve this is what we see today as the continuous performance era.

This concept hopes for more frequent conversations between the employee and manager, but no additional ratings. Some companies have gone so far as to remove the annual performance rating completely in favor of a purely qualitative feedback process.

If we can agree that the business requirement of performance management is to accurately review and reward employees for their performance, then we have to say that these processes fail to satisfy the company’s requirement. These processes are either too infrequent or too vague to truly be considered accurate or effective.

In cases where ratings occur but only once or twice a year, how confident can we be in that rating? If on December 31st you were asked to estimate the average high temperature of your hometown during the entirety of that year, how accurate would you be? What if the weather on the last 2 weeks had been a polar vortex; would it affect your judgement and then cause you not consider some warmer stretches in the spring? If you had scribbled down notes every 90 days about the weather, would that make your guess accurate or would it just go from a terrible guess to a pretty bad guess?

Now – what if instead of asking you to make a summary judgement at the end of the year, what if every 2 or 3 days you noted the high temperature on that day. Then at the end of the year instead of your guess, you took the average of those 150 or so ratings during the year? I bet your average is going to be pretty darn close to reality.

The reason for this is sample size. In any data analysis, the larger the sample size, the more trustworthy the result. A single performance rating is a sample size of one and highly unreliable. 50 or more performance ratings over a year is a dramatically more trustworthy sample size.

If a larger sample size of ratings during the year would be more trustworthy, how do we go about changing our performance management process to get all those ratings? The answer is to reduce the process. If managers and employees are asked to carry a much smaller administrative burden on their performance review form, we can in turn ask them to engage in the performance management process more frequently. How frequent can be left of to each employee and each manager, but it will be easy to prove that the more frequently there are ratings, the more accurate those ratings will ultimately be when viewed over a time period and can drive a company’s activities for reward and retention.

Once you have a company-wide quality sample size, you can begin looking at your performance management metrics in ways you've never previously considered.

This is what Quix can provide. Quix is a mobile application that allows employees and managers to quickly rate themselves and their direct reports up to twice per day. This allows companies to build a more nuanced, complete picture of employee performance over time, identifying high-performers, problem employees, potential management issues and even biases that would otherwise go unnoticed and unaddressed. Contact Quix to learn more.