Some people see performance reviews as a simple box-checking exercise that disrupts the day-to-day operations of a business. However, that couldn’t be further from the truth - especially when performance reviews are data-driven.
While a subjective approach to performance reviews can lead to issues such as inconsistency and biases, using data ensures every member of your workforce receives an honest and fair review. It also allows your management team to use this data to make improvements that resonate across your organization.
So, we’ll analyze how you can use data-driven performance reviews to identify your employees’ strengths and weaknesses so you can make solid, data-led strategic decisions for the betterment of your business.
The traditional approach to performance reviews has focused on how superiors perceive an employee's performance, attitude, and work ethic. While this method of assessing performance is standardized across multiple businesses and industries, it leaves vast room for improvement for several reasons.
By not using data, a traditional performance review is open to subjectivity. What might be perceived as a good performance by one manager may be perceived as poor by another. However, without data, there is no way to determine which review is more accurate. The relationship between employees and managers can also heavily influence a performance review, leading to biases and a lack of transparency.
With subjectivity also comes inconsistency, which means any information collated in traditional performance reviews can be unreliable. There’s also the risk that different managers use different criteria to assess their teams, resulting in a lack of standardization.
Performance reviews relying so heavily on subjectivity and the biases that come with it can harm employee engagement, leading to a workplace culture built on resentment and anxiety.
Similarly, traditional performance reviews usually focus on the negative aspects of an employee's performance, which can cause reduced productivity.
Many businesses limit traditional performance reviews to annually or twice annually. With such long stretches between performance reviews, issues can go unnoticed, achievements can be overlooked, and growth opportunities can be missed, which can all have negative impacts.
Traditional performance reviews often focus on the past rather than the future. Plus, when your performance reviews are subjective, you can’t implement accurate goals and development strategies. As a result, your employees’ effectiveness and efficiency will stagnate.
Data-driven performance reviews are a method of delivering employee performance reviews that forgoes the subjective approach of traditional reviews and instead relies heavily on data.
With data-driven performance reviews, employees get a fair evaluation that focuses on the positives and how they can improve. Accordingly, employees can grow and develop, allowing your organization to deliver ever-improving service to your clients.
Unlike a traditional performance review, a data-driven approach ensures that both your employees and your organization will see the benefits. That means it takes a strategic and thoughtful approach, not a one-size-fits-all.
To do this, consider the following steps:
Using data to assess employee performance makes it easier to ensure employee growth contributes to the overall success of your business. Data-driven reviews also encourage transparency, celebrate the success of your employees, and establish a culture focused on development.
To ensure your organization’s performance reviews align with your business goals, you need to understand what data is most valuable. The data examples below can provide key insights:
Adopting a data-driven approach to performance reviews can seem daunting at first, but the benefits to your employees and business mean it should be a priority. Managers will have to switch how they approach performance reviews to ensure a fair, consistent, and standardized approach across your organization.
Here are some tips for managers and business leaders who want to adopt this approach:
For managers new to this approach, there are eLearning courses on managing performance that can develop and upskill managers so they’re confident using data in performance reviews.
Adopting a data-driven approach to performance reviews is just the first part of the process. Creating a culture centered on continuous improvement means using data to monitor employee progression.
Your HR department or learning and development specialist can grant managers admin access to monitor engagement with your LMS. They can then use this access to collate data, including training completion rate, time spent using the platform, and assessment scores. With this data, managers can further personalize employee training plans and offer additional support when needed.
You could also introduce a micro-credentialing system, which enables employees to learn in small chunks over time to master a new skill or topic. Using employee feedback is also crucial, as this feedback can help make improvements to employees’ learning and development strategies.
Now that you know how data-driven performance reviews benefit your employees and your ability to meet organizational goals, why not adopt this efficient and effective approach?
Download Go1’s Future Fits eBook to learn more about how to support your teams in building future skills. Or, you can speak to one of our experts to find out how Go1 can support your organization’s learning and development strategy.
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