Feedback and Performance Management: Best Practices

There are few workplace situations more uncomfortable than providing feedback. When employees know they’re about to receive feedback on job performance, they oftentimes clam up. It isn’t any more comfortable from the manager’s side of the desk either. Though it’s necessary, managers frequently dread giving feedback to team members.

HR experts suggest a range of best practices on how to manage feedback productively.

1. How and when to document feedback

Basic questions about feedback include how often to do it and which format to utilize. Most HR experts suggest a light touch when it comes to the formal feedback process, though each company will differ in terms of structure and timetable.

Karen Weeks, VP of People at OrderGroove, suggests that feedback should have at least some structure. Although her company previously utilized a more open system, it is now in the process of adding more structure to the feedback process. Once per quarter, employees’ OKRs (Objectives and Key Results) will be evaluated. Weeks emphasized that the process is intended to provide a holistic perspective on employees: “It’s not about a slap on the wrist or a gold star, but more about, ‘What did you learn? What did you accomplish?’ Then we’ll check in on development goals.”

Weeks also said that OrderGroove plans to focus more on competencies. Managers need to be trained in how to clearly communicate necessary competencies to employees so that everyone understands expectations.

2. Feedback should be helpful, not bureaucratic

Although formal feedback is important, HR experts warn against excessive administration. It isn’t necessary to rate every employee on every skill. Companies should develop a process that fits with their organization. Gordon said, “If process precedes purpose, then that’s the problem. At the end of the day, the purpose of performance feedback is to let employees know how they’re doing.”

3. Understand the value of informal feedback

Some experts recommend doing formalized feedback less frequently. Cindy Gordon, VP of People at PolicyGenius, points to the value of informal feedback as a supplement to formal feedback (which at PolicyGenius occurs twice per year). Managers are encouraged to provide informal feedback when appropriate, including once per quarter in one-on-one meetings. It is expected that managers document the informal feedback they provide.

Gordon explained, “If you’re sitting down and know you’re going to have a performance discussion you may be hyper-focused on what you think someone’s going to tell you. So we try to set a norm where you have the discussion and then follow up with email. It becomes an automatic reflex.”

4. Train your managers to give good feedback

Teaching managers how to give effective feedback is critical. One effective way to do this is through modeling. Karen Miller, Chief People Officer at Pond5, said she spent a lot of time trying to teach managers about the feedback model. But they were struggling to provide feedback effectively because they didn’t understand the basics.

Good feedback practices begin at the top. Recently, Miller did an offsite event with the executive team. Part of the agenda was to practice giving and receiving direct feedback. “Doing this as an executive team is good practice,” she said. “It creates an environment where the team gets used to it and then can turn around and do it for other people. They realize they survived it and maybe learned something.”

Other experts agree. Gordon explained that there are ways to practice feedback in a low-risk environment, such as team reflections where everyone reflects on the team’s performance. Through practice, feedback naturally becomes part of company culture.

5. When to use anonymous vs. direct feedback

One of the most contentious questions in the HR world is whether anonymous feedback is acceptable and, if so, when.

Some leaders take the strong position that anonymous feedback should be avoided. Although Gordon acknowledged that anonymous feedback can be more helpful than no feedback at all, she prefers direct feedback. “Anonymous feedback doesn’t breed trust. It can actually breed paranoia,” she explained. “If someone came to me and said, ‘I’m hearing this about you,’ I’d automatically raise my antenna and wonder who else is talking about me. It doesn’t help to foster discussion.”

6. Normalize a culture of direct feedback

The reason people gravitate towards anonymous feedback, Gordon said, is because they’re uncomfortable giving direct feedback. But while giving direct feedback is certainly uncomfortable, people need to accept it. They should understand they are helping someone else’s development process.

While other leaders agreed on the value of direct feedback, sometimes getting people to a point where they’re comfortable giving direct feedback can be a process. Miller and Weeks both utilize anonymous feedback for 360 reviews. According to Miller, direct feedback requires an evolution of culture. But she also said, “Ultimately the goal is to get to a place where you’re comfortable giving direct feedback.”

Weeks said that giving upwards direct feedback can be difficult for many people. “Many people aren’t comfortable criticizing their own managers,” she said.

HR leaders should push towards direct feedback, even if the transition can’t happen right away.

7. Linking performance management to compensation

Another sticky issue is how to incorporate performance management into employee compensation. Experts propose a variety of methods for performance-based compensation.

For Gordon, it’s important not to have the compensation and performance management conversations at the same time. She said, “We carry that out through the structure of programs, but we also have processes in place behind that. First we have the performance conversation, using skill development rubrics so that people actually know how they’re being evaluated.”

Then, the company utilizes data from databases and networks to determine appropriate compensation in conjunction with performance reviews.

Miller strongly asserted the need to tie performance evaluation to compensation. “If I’m not relying on information about who the best performers are, then I’m relying on who people like and who is nice,” she said.

She calls the system used at Pond5 “executive team validation.” The executive team meets together and goes through every employee, trying to develop a consensus on performance evaluation. She said, “It’s not formulaic, but we use information.”

8. Choose evaluation methods appropriate to your company

Weeks pointed out that companies of different sizes need different ways to determine appropriate compensation. When she worked at a larger company, they used ratings as a starting point for adjusting employees’ compensation. However, the organization also gave different departments the option to set their own compensation methods. The engineering team has different preferences than sales or marketing, which should be accommodated.

Now that Weeks is at OrderGroove, a smaller company, she implements a system that is less formula-driven. “We sit down and figure it out together,” she explained.

While compensation should relate to performance, there is no one-size-fits-all method for how to do this effectively.

9. Some tools for documenting feedback and determining compensation

There are a number of HR tools available that can help to document performance feedback and determine compensation. Here are some of the tools leaders recommend for feedback:

  • Reflektive: This performance management tool ties into Slack, providing a way for managers to document feedback.
  • GoogleDocs and Word: In terms of simple tools that enable employees to give and receive feedback, these are great choices for smaller companies.
  • Impraise: A software tool to provide feedback to employees. Although ratings are included as part of the tool, they are not the focus.
  • Slack: For providing informal feedback, Slack is a useful tool that your employees are probably already using for other purposes.

Leaders also recommend using database tools for information on average salaries:

  • Salary.com for small businesses: Offers data about average salaries for small businesses and early-stage startups.
  • Advanced-HR: There are two options within Advanced-HR, including a paid and free option. The free option allows users access to salary data in return for imputing organizational data.

10. Use survey tools to collect feedback

Simple survey tools like SurveyMonkey can also be useful for collecting feedback on employee performance—and the performance management process itself. Ask employees about their feelings on the feedback process itself. Weeks recently conducted a short survey for both managers and employees asking about the relevance of feedback. “We learned that people thought the feedback was rich, but didn’t know what to do with it,” she said.

As a result, Weeks is modifying the performance management performance. Gordon said that by asking employees about the feedback process, her team learned that the performance management software program being utilized wasn’t working for employees.

Through surveys, HR leaders can learn what is and isn’t working for employees. Of course, employees oftentimes vary widely in their personal preferences. Some employees want more performance evaluation, others less. That too is useful information that should be communicated to employees. Miller said, “One of the most helpful things about surveys is being able to explain the results to people. You say, ‘Half of you thought it was too dark in here and half of you thought it was too light.’ It helps open up people’s perspectives and helps them realize others may see the world differently.”

Landing on the optimal performance management process is an ongoing struggle for HR leaders. But with these tools and best practices, you can implement a system that works for your company and employees.

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Jason is the Client Director at CloserIQ.