Building Better Businesses with Strategic Employee Reviews

After years of working with hospitality companies on employee review programs, three scenarios seem to characterize the approaches found in today’s workplaces. None are effective because they do not derive from or support an overall HR strategy. Put bluntly, each approach takes away from the potential for your HR department to act as a strategy and profit center. Ask yourself if any of these scenarios are familiar:

  • Employees do not participate in a review or appraisal process consistently.
  • Employees are “given” a review – often very brief – by a supervisor and asked to sign off on it without much explanation or discussion.
  • Employees have the opportunity to participate in a potentially meaningful review process, but the value is diminished or lost because the process is not properly messaged, facilitated or followed through.
  • When reviews are regarded as a necessary evil or merely a piece of administrative housekeeping, they are not given priority or executed well. However, when valued as a strategic tool for professional and business development employee reviews can substantially bolster the two ingredients that define high-performance company cultures – effective Operations (business practices) and Social Maintenance (people practices).

Best practice organizations have long relied on “360 degree” review formats to overhaul the three scenarios noted above. This format uses several raters – each with a different working relationship and hence perspective – to assess the strengths and weaknesses of the employee being evaluated. Unlike the ratings from a single evaluator such as a supervisor (who may not be well informed or engaged in the process), the 360 degree format tends to be more balanced, fair and credible. The secret of success is to implement the right type of 360 for a particular audience or situation. Unfortunately, the choice is not always obvious.

“Hard” vs. “Soft” 360s

360s can be tailored to be either “soft” (skewed qualitative) or “hard” (skewed quantitative). The basic outcomes are the same, but these two approaches are effective for different situations. They also have their own costs and benefits:

Hard 360

This is the most popular method. It uses a pencil-and-paper or online survey format with a series of rating scales for evaluators to appraise an employee’s performance. While there is typically a section to provide open-ended comments as well, the “hard” approach is almost entirely quantitative. The 360 software or instruction guide easily allow the results to be tabulated into simple reports that serve as “report cards.” This method is most often used for line level staff or mid-management. For example, 20|20 Skills™ assisted Millennium and Copthorne in rolling out a “hard” 360 program that uses convenient automated reporting with built-in “Action Plans” to foster professional development. This approach has served their needs very well thus far.

Benefits: This approach is extremely useful when large groups of employees need to be evaluated in an automated, systematic and standardized way. It is an efficient and manageable system for global companies who use common benchmarks for performance quality on roles and responsibilities that are well-defined and lend themselves well to a set of straightforward rating scales concerning skills, attitudes and knowledge areas. It is also important to note that “hard” 360s allow participants to contribute feedback in an anonymous way. This is critical if employees have concerns about privacy or the possibility of retribution for providing negative commentary about a co-worker.

Cost issues: Online 360s are arguably the most cost effective, manageable and accurate with scoring. Therefore, there is the cost of licensing or designing your own 360 software. There can also be a significant time cost in training people in its technical use, as well as how a manager debriefs an employee on the 360 feedback report.

Soft 360

This is a more qualitative or personalized process, although it can (and should) produce a quantitative outcome. Here a trained, impartial facilitator conducts a series of confidential, structured interviews with the reviewers, as opposed to asking the reviewers to participate in a rigid survey. The facilitator compiles the data and prepares a report based on the outcomes. This method is popular with senior level executives and board members. To be sure, 20|20 Skills™ has conducted “soft” 360s for top leadership at Royal Caribbean Cruise Lines and the historic Chase Park Plaza in St. Louis. This approach was helpful as these projects required intimate knowledge of situational issues that needed to be taken into account when analyzing and interpreting the data.

Benefits: This approach is helpful when in-depth, nuanced analysis is needed for an employee or team. It is most suitable for employees who work in smaller groups that routinely interact and keep each other accountable – that is, team members who will not hesitate to provide detailed feedback about a co-worker. Of course, “soft” 360s can also involve anonymity for the reviewers if absolutely required. This personalized approach to data gathering also has the advantage of the facilitator being able to probe for additional clarification and insights from reviewers on the spot. This permits a deeper understanding when complex situations and ever changing roles and responsibilities are involved that are best defined as “moving targets”.

Cost issues: Soft 360s require detailed preparation and involve greater training in their implementation. As a result, the per-employee cost can be higher than with the “hard” approach since experts in behavioral interviewing or performance management are needed to set up or facilitate the process. The process is more involved as well, as data must be captured, assimilated, analyzed, articulated and presented in a custom report. Each component can have a separate cost factor.

The Hidden Costs and Benefits of 360 Reviews

Whether a “soft” or “hard” 360 is used, one shared benefit is that asking employees to participate in appraisals helps them feel involved and valued by the organization. Feeding a sense of ownership and collaboration builds employee morale and engagement, which in turn, directly correlate with employee productivity, loyalty and service quality. Further, a strategic 360 review process enhances the sense of accountability in an organization. Traditionally, employees feel accountable to “bosses” but not necessarily to peers and direct reports. Expanding accountability to involve others, parallel and below, reinforces a collaborative team environment and sense of responsibility.

That said, there is also a shared pitfall with all employee review procedures. Arguably the most critical step is the follow-through… in other words, the question of “what now?” that comes after the feedback is given to the employee. Reviews often fail because they do not generate Action Plans for applying the learnings from the appraisal in tangible and beneficial ways. Developing action or performance plans is part art and part science, but the fundamentals can be learned by most anyone. Remember some key points:

  • Action-development plans ideally should be driven by the employee under review so the goals are realistic and speak to personal development as well as organizational needs.
  • Action-development plans ideally should focus on a small set of goals with clear behaviors and target dates for progress or completion.
  • Action-development plans are not the sole responsibility of the employee under review. Plans should also involve ways in which managers and peers can support the employee in his/her role.
  • Action-developmental plans are not static pieces of documentation but rather should be seen as dynamic, “living” outlines that can be adapted as needed.
  • Action-development plans are not topics of conversation that only occur between employees and supervisors on anniversary dates. Supervisors and peers ideally should talk about their goals on a daily basis. For example, supervisors can ask simple probing questions of employees during walkarounds such as, “What have you done today to further your development plan?” Employees can take the initiative and ask others (supervisors, peers, direct reports) for simple feedback such as, “I’m trying to improve my responsiveness to requests from others. How do you think I’ve done this week with that goal?” Finally, everyone can start providing unsolicited praise and constructive criticism to each other when the opportunity arises. For instance, “Rosalina, I just wanted to tell you that I’ve noticed that you participate more in meetings now. I hope you keep that up, since your opinions and views add so greatly to the discussions.

To assess the impact of employee performance on organizational performance, organizations need a balanced, strategic, and focused employee review. The typical single-rater measurement systems are often insufficient in providing a true picture of individual performance or to show causal linkages between individual and team dynamics.

In addition, the multi-rater review’s approach to the developmental process should be regarded as a specific and targeted approach for improving employee behavior. A well designed employee review connects multi-rater feedback to a clearly defined action plan for the individual being reviewed. This type of comprehensive process will more likely lead to successful implementation and achievement of the desired results for both the individual and the organization.


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