The performance review is sometimes met with mixed emotions from managers and employees. And if they’re conducted without a clear focus and goals, reviews can be time-consuming and stressful, leaving everyone involved feeling like little was gained from the process. According to HBR, most CEOs don’t find reviews helpful in identifying top performers, and half of employees don’t think their managers reviewed them fairly.
Table Of Contents
- Why Are Some Companies Walking Away From Traditional Performance Reviews?
- What is the Cost of Not Running Performance Reviews?
- What Is a Performance Review?
- How to Prepare for Performance Reviews with Remote Developers
- How We Conduct Performance Reviews at Scalable Path
- Delivering Tough Feedback
- Tips for Conducting Remote Reviews
- Closing the Meeting and Reward Systems
- Summary: Improving Performance Reviews
But with thoughtful planning and an outcome-oriented approach, performance reviews can be extremely useful. This is especially true for remote teams, who often have less frequent interactions with management. Remote staff can lack clarity into how they’re performing – and how that performance is being perceived.
In this article, we will review the state of performance reviews in 2022, why they’re still an invaluable tool for managers, and how to plan and run them successfully. Then, we’ll look at what leaders of remote teams might be missing out on by not conducting reviews. Finally, we’ll share an in-depth guide on how to plan, prepare, and run employee reviews, with insights from our own performance review process.
Why Are Some Companies Walking Away From Traditional Performance Reviews?
One of the main reasons some companies are pressing pause on performance reviews is that they’re expensive to implement. They are also heavily weighted toward financial rewards, which some companies feel should be given when they feel they’ve been earned, rather than at a set time each year. What’s more, there’s also a question of relevance: reviews may hold people accountable for performance based on a role or responsibilities that hasn’t been revised recently enough to reflect the employee’s actual work, leaving them feeling disillusioned or confused about how they can improve.
Some companies have replaced the traditional performance review with regular, informal conversations with their team, which gives them the opportunity to provide ongoing feedback. But some argue that informal touchpoints may not achieve the desired outcome, and employees sometimes find this approach to feel like micromanagement. At the same time, the lack of structure can fail to capture the employee’s performance in the broader picture of their role, missing critical components and providing feedback only on daily, in-the-moment tasks.
If you’re managing a remote team, there’s more to consider before deciding on the best method for evaluating staff. For one, remote employees often have less frequent interactions with management, who therefore lack visibility into how individual team members are doing. In this setting, performance reviews can provide meaningful insight into individual contributions to the team.
We’ve found that a combination of informal touchpoints with scheduled check-ins, including a thorough review towards the end of the year, has provided the most benefit.
What is the Cost of Not Running Performance Reviews?
Though it might seem on the surface that performance reviews are largely for the team member being evaluated, they’re equally valuable for leaders. Performance reviews are a good way for leaders to reflect on their company’s vision, values, and goals. They’re also a forum to improve dialogue between staff and their managers, strengthen relationships, and understand their team members’ motivation.
While some remote leaders might think reviews aren’t necessary for their company, this belief can be harmful for employee morale and productivity. There’s a saying we like at Scalable Path: “everyone should feel like a first-class citizen, whether they’re in the office or not.” Largely, this comes down to inclusion; whether someone is in the office or not, they should be treated similarly. At the same time, as a manager, you have the ability to support the people who work for you and empower them to perform at his or her best while they work for you.
Let’s explore further the benefits of holding performance reviews for remote staff:
- Employees get insight into how they are doing: While senior employees might have a pulse, junior or new staff often crave a better understanding of how their work is being perceived. This feedback can act as a north star that provides guidance and direction for the employee.
- Identify areas for improvement: performance reviews provide an opportunity for managers to help their direct reports identify strengths as well as gap areas, where they can focus attention for the future. It can also help you share methods they can improve and give them a clear path forward.
- Improve motivation: revisiting the company’s broader purpose, values, and goals can remind staff why they’re passionate about working for and with you. It can also establish more trust, and these feelings of safety can improve sentiment about the company.
- Clarify their role and expectations: particularly for remote workers, reviews can be an opportunity to revisit and even revise their job description to better suit your evolving business. It offers leaders the chance to add or remove responsibilities as it makes sense.
- Give them an opportunity to provide feedback: the annual review is a chance for team members to share their thoughts, too. For instance, they can be candid about what they like, what could be improved, and where they hope to grow. This can help them feel empowered and heard, cultivating a workplace of which they want to be a part.
Benefits for employers:
- Transparency into performance and employee motivation: managers gain insight into how employees are doing, as well as the employee’s perception of their performance: their goals, accomplishments, strengths, and areas for growth.
- Improve ongoing communication: reviews can be a safe channel for sharing bidirectional feedback. This open dialogue can encourage the team member to be more communicative in daily work.
- Increase engagement: when staff have clear, measurable KPIs, they’re more likely to feel engaged in their work. It can help keep them on track and improve clarity around their daily responsibilities.
- Learn what motivates individual employees and improve retention: everyone is driven by different goals and desires. Performance reviews allow you to better understand what uniquely motivates each team member, helping you to structure goals, KPIs, and projects around this and improve retention.
- Build empathy and high-quality relationships: these instances offer a rare opportunity to gain insight into your employee’s perception of their work, what they like, and what they find challenging. This can help to build your empathy as a leader, and analyze their performance in a more nuanced, holistic way.
What Is a Performance Review?
Performance reviews are an evaluation of an employee’s job performance. They typically are used to assess progress, give feedback and identify opportunities for professional development. To be effective, performance review processes should be structured around your business goals, needs, and evolving working models. It’s not about completing formal paperwork; the goal should be to create a meaningful interaction between an employee and their direct manager, where an exchange of expectations, honest reflection, and mutual feedback takes place.
When Performance Reviews Should Happen
Based on our experience, the best recommendation we can give is to hold performance reviews once per quarter or twice per year, depending on the size of your team. We advise against the single, annual model for a few reasons:
- It may inhibit an employee’s growth. In the annual model, employees are hearing their evaluation for the first time in that single instance, and won’t check in until the following year. By that point, the areas of improvement may have long been addressed, and other areas more suited to the discussion. Conversely, if they haven’t made progress in certain improvement areas, 12 months is a long time to wait to address that.
- Their role might have evolved. Especially in a startup, a team member’s role can grow and change quickly as they adapt to shifting priorities. Holding reviews only once per year can be counterproductive, since the employee may feel they’re being reviewed on projects or tasks that are no longer relevant.
- The time gap might harm the employee’s ongoing motivation. If the performance review is the only opportunity an employee has to realign with values and share with you what they’re most excited about, a year can feel incredibly long before having that forum again. This can lead to them feeling bored or unengaged.
- It limits the feedback leaders get. Getting feedback from your team is a key way of improving company culture. Without regular feedback from team members – who may be hesitant to share their feedback unprompted – you miss out on the opportunity to improve the company.
Formal Performance Reviews vs Informal Check-Ins
Not every instance you hold with your team members has to be formal. Mixing casual check-ins and informal follow-ups provides continuity, relevant feedback, and interest in improvement. There are pros and cons to each, which is why we recommend combining them.
In casual check-ins, you as a manager have an opportunity to give in-the-moment, relevant feedback. It also gives you consistent insight into what the employee is working on, how they’re doing, and their approach – building empathy and a more holistic understanding of true performance.
Performance reviews, though, can be more strategic and reflective. They typically involve a review on the part of both the employee and manager, encouraging each to zoom out and align the employee’s performance to broader, long-term goals and vision.
Should You Run Reviews for Contractors as Well as Permanent or Full-Time Staff?
In reality, performance reviews are beneficial whether you are engaging with someone for a short or long period of time. We recommend holding performance reviews for all team members, regardless of their relationship with the company. This includes permanent full-time or part-time staff, as well as contractors.
Not only does giving someone feedback allow them to improve in future engagements (with your company or another), but also encourages you as a leader to reflect on the working relationship. By reviewing what went well and what didn’t, you are better equipped to hire in the future.
How to Prepare for Performance Reviews with Remote Developers
Now that we have established the importance of this process, its benefits, and basic schema, it’s time to address how you should prepare to run them. There are four key questions that we recommend you ask yourself before getting started that will help build the foundation of your performance reviews:
#1 What Elements Will Define the Way You Will Evaluate Your Team?
The first step is for your leadership team to establish a set of criteria and goals for evaluating your team members. You must set the ground rules and collect information prior to conducting reviews to ensure you provide fair feedback. Some questions you can ask yourself at this first stage include:
- Will you measure performance based on concrete goals and accomplishments, progress towards company KPIs/metrics, or both?
- What elements (e.g. technical abilities, domain knowledge) will you use to evaluate staff in various departments, roles, and seniorities?
- Will soft skills (e.g. collaboration, team communication, etc) be part of the overall evaluation?
Related to the prior questions, it matters whether you are going to measure performance based on achieved goals or single metrics. The approach you choose will influence the data you need to collect and review in advance of the meeting. If you are using metrics to evaluate staff, these should be communicated long before the performance review so the employee has a clear understanding of how their performance is to be evaluated.
If, for some reason, they don’t have this information, these goals or KPIs should be left out of the performance review until you properly introduce it to keep your reviews fair.
#2 What Manager is Most Appropriate to Conduct Each Review?
For this stage, take a close look at the involvement you, and other members of your leadership team, have with each team member. The person who will provide the best evaluation and feedback to an employee is the one who is involved in their regular projects. They will have the insight, credibility, and authority to speak about someone else’s performance. If you are not that involved, consider delegating the performance review to someone closer to the daily routine and can make a proper assessment of team performance.
#3 What Metrics Have You Been Able to Measure at This Point?
If you are measuring and collecting metrics, this is the time to use them to help you assess your people. Make sure you take some time to understand your metrics and review them for each team member in advance of the review so you have a clear idea of their performance.
We’ll be the first to say that deciding what metrics should be, and using them to measure a software developer’s performance, isn’t easy. But it’s a good idea to have something to work with, as you can iterate over time.
Below are three of the metrics we’ve found most useful at Scalable Path:
- Story points released per month: in the context of Scrum, “story points” represent how complex a task is compared to another in the backlog. Calculating a developer’s story points for a given timeframe can help you assess their performance and efficiency.
- Number of QA cycles before approval: quality assurance is an expensive process, so minimizing the number of QA loops required during development is important. This can give you insight into a developer’s attention to detail, commitment to code quality, and how thorough they are.
- Number of bugs in production: Bugs or defects in production environments can indicate that logic behind the code isn’t sound or insufficient testing in various scenarios. While this can be a hard metric to track, it is arguably the most relevant.
Your team should also review each developer’s metrics and comment on them in advance of the review. We recommend having everyone complete a self evaluation that includes spaces for them to reflect on the metrics relevant to them.
#4 How Have You Been Assigning Tasks to Your Team Members?
Tasks assigned to your team members will be an important part of their evaluation. It’s important to understand what they have been working on lately and what company goals have kept them busy. Getting into the details of their role and tasks will help you provide meaningful and relevant feedback and, moreover, will give you the tools to design an action plan in case there are recommendations to improve.
How We Conduct Performance Reviews at Scalable Path
A) Preparation Phase
In our model, our leadership team uses the preparation phase to “set the tone.” During this time, we focus on defining the following aspects:
- The desired outcome of the review and main takeaways.
- What will be discussed in this meeting: raises, promotions, lay-offs, bonuses, etc.
- Develop an action plan for each person evaluated.
- Set the agenda and communicate to the team members.
- Gather evidence and concrete examples that can help people to improve.
What Do We Mean When We Talk About Having an Action Plan?
To prepare for evaluating team members, we find it useful to design a plan for each person. It takes time, but running these reviews pays off because it’s the opportunity to commit to improving someone else’s performance to benefit your team and company. It’s also usable for reviews in the future – so you can iterate on it year after year.
Here’s how we develop an action plan for each team member:
- Start by listing their strengths and key accomplishments. This list immediately provides context and allows us to visualize the bigger picture by understanding how this person has contributed to the organization and can continue to do so.
- List areas that need improvement. Here, we’re able to advise and communicate our expectations, as well as establish a forum to understand how individual team members feel about their role, goals, and the feedback given. This includes whether this person feels they can commit to accomplishing them and what this person needs to get there.
- Develop a plan to get things on track. This is the last part of this preparation phase. At this point, we work on a plan to help each team member get exactly where we want them to go. This is a tacit agreement where you both commit to this growth path and plan ahead.
B) Get Employees to Complete a Self-Assessment
Before conducting the reviews, we have team members to evaluate themselves. The team members should prepare the same way as leadership does for this instance. Some example questions you can ask them to prepare include:
- What 2-3 items do you think were your biggest accomplishments since [last review period]?
- How could your manager/team better support you to reach your goals?
- Are there any skills you don’t feel like you’re using in your current role?
- What are your key strengths?
- What 2-3 areas could you improve? How will you do this?
C) Leadership Assessment
In our view, an important part of the review process is to change seats and let your team members evaluate you, too. Feedback is a two-way street, and you should pay attention to what people have to say about your management style. There are so many benefits to receiving feedback from the people you manage, so give them a chance to speak.
Ask them to describe your management style according to the following key aspects:
- Direction & Coaching
- Micromanagement level
- Ability to delegate
- Adaptability to change
- Conflict resolution
- Communication and clarity
D) Execution Phase: Time to Run the Meeting
Once it’s time for the review itself, there are key areas that should be covered. Below are some key considerations for running the performance reviews.
Delivering Tough Feedback
Rewarding and recognizing someone that has done a good job is equally positive as giving someone recommendations and advice on how to do better.
Sometimes, though, you’ll have to deliver tough feedback. In this case, make sure to plan ahead. Get your notes together, think through how to deliver the feedback, and be prepared for follow-up questions.
If you know the person you are evaluating doesn’t take feedback well based on past experience, or you notice in the moment that they’re not taking your feedback well enough, allow them to express their emotions and give them time to cool down. If this still doesn’t work and the person is in a difficult position, consider pausing the meeting, then schedule another time to talk to ensure effective communication.
Of course, as a manager, you can prepare in advance to optimize your feedback delivery. This article from Forbes provides some insight into how to deliver feedback in a way that feels safe and fair.
If it’s time to let someone go, be honest and direct. Make sure you clearly address where the mismatch lies and try to highlight still those strong aspects that you were able to identify during the engagement if any.
Tips for Conducting Remote Reviews
In truth, reviewing remote staff shouldn’t differ too much from in-person ones. That said, since remote staff may have less interaction with management (as we said before), we recommend dedicating additional focus to establishing trust.
For remote employees, start by initiating an engaging conversation. Remove distractions and ensure they do the same. Make sure you both have your cameras on. Start off with personal conversation (if you’re comfortable). This can help ensure active listening and effective communication.
Start with the things that you know they are doing well, and continue to the aspects that should be improved. Toward the end, you should come up with an action plan and make sure the person you’re reviewing understands and is on board.
Closing the Meeting and Reward Systems
At the end of the review, discuss any raises, bonuses, equity, and/or benefits. Given the planning you’ve done to understand the employee’s performance against goals, you should be able to define whether you are giving someone a raise, bonus, promotion, or other benefits of some sort. This is heavily related to your company’s broader reward system.
Reward systems should be part of your organization. Defining how to reward your top performers is important for retention and gives your people a meaningful path forward. Traditionally, employees expect there to be fair, standardized, and routine ways of being rewarded. Performance reviews are often the context in which these rewards are expected. Not everything has to be related to a salary increase. Rewards systems can include benefits of a different nature, like PTO or bonuses based on performance.
Summary: Improving Performance Reviews
In our view, performance reviews are a useful tool for evaluating remote staff, motivating your team, and receiving useful feedback. Of course, to be effective, they must be developed thoughtfully. Don’t simply adopt a traditional approach. Think deeply about your company goals and values, and what you want to achieve with performance reviews.
A combination between casual check-ins and an annual assessment process might be that sweet spot you are looking for. From personal experience, we can vouch for it, as this is the approach we have adopted internally. A proper time frame between these instances will allow people to pay attention and listen to feedback without feeling micromanaged. Then, it’s all about making these instances fair and meaningful by preparing them, making assessments based on data, and setting the right path forward without forgetting the human aspects and values that should come with this.