The new year is just around the corner and for HR departments that means it’s time for annual performance reviews. But before you start your 2024 performance plan, consider revamping your entire performance management process to include multiple ways to measure performance.
Why Your Annual Performance Reviews Need to be Overhauled
If you haven’t overhauled your annual performance plan in the last decade, it’s probably not working as well as you think it is. According to Gallup, only 14% of employees strongly agree that their performance reviews motivate them to do better work and 95% of managers are also dissatisfied with their review process.
It could be because employers who only review performance annually are missing out on receiving imperative employee feedback during the remainder of the year. Employee feedback is essential for building a strong company culture and measuring the impact of strategic goals. Continually asking your employees what they think about projects, goals and the company overall can help employers redirect their efforts if something isn’t working before it’s too late.
But what’s more, with annual reviews employees could be left in the dark about their performance, leaving them no time to adjust or improve by review time. And a lack of regular feedback could frustrate your younger employees, pushing them to seek other opportunities. According to Inc., 66% of Gen Z say they need feedback from their supervisor at least every few weeks to stay at their job while less than half of Millennials require the same level.
Why Regular Feedback is Important
Offering your employees regular feedback, instead of once a year can increase motivation, engagement and retention rates. According to Gallup, employees are 3.2 times more likely to strongly agree that they are motivated to do outstanding work when they receive weekly feedback and are 2.7 times more likely to be engaged at work.
Employee feedback is so important that when workers don’t get it, they start looking elsewhere for employment. That’s a problem, especially for the construction industry which is seriously impacted by the labor shortages. Retaining the employees you already have is less expensive than hiring and training new workers.
Ways to Review Employee Performance
Employee performance reviews can be conducted formally with annual or semi-annual reviews but also much more informally, like quick weekly one-on-one meetings between managers and employees.
Measuring Goal Achievement
Setting and measuring goal achievement is a great way to review performance as it provides both managers and employees with analytical data. The key is to set SMART goals, which are Specific, Measurable, Achievable, Results-based and Time-bound.
- Specific: Include dates, resources and/or dollar amounts you’ll need to accomplish them.
- Measurable: Identify appropriate metrics so employees can track progress and measure success.
- Achievable: Make them a stretch, but doable.
- Results-based: Align with company strategy by relating to something that is necessary, of value and supports the company’s vision.
- Time-bound: Determine a date, timeframe or scheduled completion of the goal.
Project-Based Performance Management
Performance management by project is like an annual or bi-annual performance review, except it is done on a more micro-level. Instead of evaluating a year’s worth of work, performance management by project focuses on performance on a project-to-project basis. Managers gather feedback from site supervisors and other employees, which can be evaluated by individuals or groups, about the performance on a project.
360 Degree Feedback
360-degree feedback is a performance appraisal method that uses feedback from everyone who works with or around an employee. Managers, co-workers, direct reports, customers, CEOs, anyone who is in the employee’s circle anonymously gives their input, giving employees an idea of how their performance is viewed by others. The benefit of using 360-degree feedback is it gives a well-rounded view of how an employee works with others. It can encourage team development as employees know who is and isn’t pulling their weight. It also helps teams hold each other accountable and improve communication between them. It also helps to eliminate biased judgment, especially if the employee doesn’t have a great relationship with their direct manager.
How Arcoro’s Performance Management System Can Help
Arcoro® Performance Management is a cloud-based solution that empowers team members to direct their own career development toward mutually agreed upon goals and competencies, while enabling managers to better understand the strengths and weaknesses of the overall team and keep them focused on achieving their goals. By benchmarking, tracking and evaluating employee performance over time, HR teams gain all the insight needed to make informed personnel decisions.
Arcoro Performance Management centralizes goals, competencies and 360-degree feedback to create a career roadmap for employee and organizational success. Employees can create personal goals and then both managers and employees can track their progress, updating them by adding comments and/or supporting documents.
The Arcoro performance management module allows you to create and manage all types of on-demand reviews like project-based, skills assessment, discipline action form, employee recognition form and so on. You can review employee performance on a project-to-project basis and provide managers with feedback from a project leader’s perspective by an individual, group or both.
Get ready for 2024 by upgrading your performance management process with Arcoro.
Schedule a demo to see our software in action. 
