Category All, Best Practices How to Use Performance Management to Foster Inclusivity Inclusivity is essential for workplaces that deliver astonishing results. A collateral outcome of conducting performance management skillfully is an increased feeling of employee belonging and inclusion. Learn how to perform performance management to help departments become more diverse. May 23, 2022 By Ravijojla Novakovic Performance appraisals – what is it? Traditionally, companies have relied on performance appraisals to account for an employee’s impact on the company. Performance appraisal, also referred to as performance review or performance evaluation, is used to measure employees’ contribution to the company. Appraisals are also a chance for managers to identify training needs, provide paths for growth and improvement, and give feedback to employees, recognizing their hard work and/or providing guidance for further development. This practice has been assessed annually in most cases. The performance appraisals make grounds for employee promotions, role changes and salary raises. Sometimes, the reviews are used to justify laying off an employee who doesn’t perform. Performance management – how is it different from performance appraisals? Nowadays, more and more companies are scrapping the outdated system of annual performance reviews, to favor a newer approach – performance management. What’s the difference between performance appraisals and performance management? For starters, performance management is a continuous process, comprising more frequent instances of communication interactions between a manager and an employee. Assessing employees’ accomplishments is done more regularly, and managers check in with employees quarterly, monthly or even weekly. A major difference is that performance appraisals look to the past, while performance management is oriented towards the future. Performance management focuses on skills planning and emphasizes development and improvement. Even though many companies still do not make use of performance management, the concept itself is not new. It originated in the 1960s – and we are currently in the 5th phase of the development of this concept. Arrested development: innovation takes time According to a survey report by XpertHR, 63% of employers still conduct performance reviews once annually. A staggering 66% of surveyed employees of Fortune 1000 companies were strongly dissatisfied with the performance evaluations they received in their organizations. These statistics are surprising, considering that we’ve known for more than 60 years that yearly appraisals are ineffective and often demotivating for everyone involved. The delayed innovation is probably due to the complexity of applying it to companies’ processes. Despite seeming to take more effort, time and money, when done right, the practice of performance management better serves the companies’ bottom line. Upgrade your annual performance reviews: welcome performance management Regardless of research that shows us differently, lots of companies continue to rely solely on annual appraisals. Here are just a few reasons why these should be signed off to the long list of ‘things we did in the past, but we know much better nowadays’, and complement them with inclusive review practices. Obstructed View For one – yearly appraisals look to the past instead of the future. Twelve months is a long time. With all the workload these days, it is impossible to keep track of everything an employee contributed to a company’s success. One performance review will simply not be able to cover all that’s happened in a year. The result is unclear and dimmed overall, often missing out on the subtleties of an employee’s real impact. Delayed Feedback When too much time has passed since the last appraisal, the learning opportunities are lost. Hence, the assessment – whether it’s a praise or talking about space for improvement – isn’t happening in a moment when it could become a learning opportunity. Too Subjective Depending on the company’s internal review processes, performance reviews rely on a mix of subjective and objective data in varying degrees. Even when the performance reviews include referring to objective goals set at some point in the past, they are still partly subjective. This opens up opportunities for unconscious bias. Bias takes many forms and shapes, but what is certain is that it negatively impacts feelings of inclusion in your workforce. And the moment inclusion is threatened – companies risk employee disengagement – which is costly, and eventually, employee turnover just adds to the score. Despite how managers think their judgment is objective, data tells us differently. Even with the 360-degrees performance review system, which is more democratic in approach than the 180-degree performances, subjectivity creeps in. Research shows that in 360-degree reviews, “an average of 62 percent of a rater’s score on a performance review was formed based on personal idiosyncrasies rather than the subject’s actual performance.” One would suppose that a 360-degree system, which supports feedback from not only direct superiors, but also from peers from the same or different teams, and sometimes even feedback from external entities – allows for more objectivity, since an employee is perceived from a more wholesome perspective. Still, there are issues even with this process. No one seems to be immune to bias. → Not enough reasons to conduct reviews more often? Here are a few more. That wretched gender bias The analysis of a global survey of 21,980 firms from 91 countries suggests that the presence of women in corporate leadership positions may improve firm performance. So why are there no more women in C-suite positions? There is a lot of research supporting the finding that gender bias in performance reviews jeopardizes women’s careers. Women are more likely to receive feedback tied to their personalities, the subjective and biased view of their personalities than men. Research shows “that women were 1.4 times more likely to receive critical subjective feedback as opposed to either positive feedback or critical objective feedback”. The reason for this discrepancy lies in the traditional practice of describing men as agentic – masculine, and women as communal – feminine. That makes grounds for women being seen as less adept at being leaders. According to Shelley J. Correll: “Where we find the bigger biases are in evaluations of people’s personalities, their future potential, and on the mentions of exceptionalism. So if we want to get rid of biases, we need to look at the areas where biases are more likely — personality, potential, and who’s truly exceptional.” The gender bias increases in men-dominated careers. That’s when women are expected to act within the confines of their gender, as certain behaviors carry different weight for men and women. This is also known as ‘gender policing’. Correll further states that: “Even when women are viewed as visionaries, they don’t earn higher ratings on evaluations, suggesting that managers don’t weigh female brilliance as heavily as they do that of males.” Even when rating themselves, women tend to be more self-critical than men on average, leading to worse career outcomes for women. This produces a double whammy effect, as people who overestimate their abilities are more expected to attain senior positions. → Learn more about benefits of diversity in workspaces. Who Gets Ahead, and Who Does not Research tells us that feedback that is perceived as ‘unfair’ leads to lower motivation levels in employees. Disengaged employees will not be as productive as their engaged peers, which will influence teams’ and companies’ productivity. On the other hand, when employees perceive the performance-management system as fair, they also perceive it as effective. Gender, racial, and ethnic equity, disability and LGBTQ+ inclusion – are key to fostering workplace inclusion. Research shows that “people from under-represented groups are penalized for not looking like a leader”. The bias on the way people look goes in every direction. According to Impact Group, “less than 15% of U.S. men are over 6 feet tall. Yet, 60% of corporate CEOs are at least this height.” Those who can, resort to code-switching at workplaces, further diminishing a sense of belonging of the employees who feel obliged to ‘code-switch’. We know that the representation of women in leadership positions is still below acceptable levels. When diversity intersects, and that is how diversity works – it is intersectional, some groups are more in danger of being negatively impacted by unconscious prejudice. Black women have it even worse: McKinsey found that Black women lose ground to White Women and Black men. Main Takeaways to Drive Inclusivity with Skillful Performance Management 1. Practice Inclusive Language Inclusive language refers to language that is not disrespectful or alienating to groups of people based on gender, race, socioeconomic status, ethnicity, ability, or any other differentiating factor. Also, eliminate discriminatory language from self-evaluation sheets that can be triggering to people from historically excluded groups. Here are just a few examples provided by the Southwestern University: Instead of minorities, use ‘non-whites’ or ‘people/person of color’. Instead of ‘poor’, use ‘lower socioeconomic status’. Instead of ‘disabled’, use ‘person with disability’. Instead of ‘suffers from mental illness’, use ‘living with a mental illness’. Inclusive language is also degendered, so instead of ‘chairman’, use ‘chairperson’. Naturally, inclusive language should be used externally as well, as how you communicate externally should match the values you are communicating internally and vice versa. 2. Establish cadence We know yearly appraisals are ineffective, but what is the sweet spot exactly? And how do companies ensure that they do not expend more time than necessary on assessments? Connection is key to fostering inclusivity and a feeling of belonging for the employees who belong to the historically excluded groups. Your company needs to invest time to get to know your employees to connect to them genuinely. Additionally, feedback works best when it’s constructed like a dialogue. A general rule of thumb is that appraisal frequency depends on the seniority of the role. Less experienced newcomers will need more feedback than more senior roles. Best practice: give feedback when and as often as necessary, biweekly or monthly. That way, managers establish two-way communication, get to know employees better, and build stronger relationships, ultimately benefiting the company culture. → Give and receive feedback as often as you need it. Learn more about FeedBck. 3. Construct self-assessments around employee targets Make your feedback transparent and allow employees a great deal of independence regarding their personal goal setting. When employees have a say in how they develop in their role, they own their development and become more proactive. Engaged employees are top performers and become brand ambassadors. Remember that goals should be reasonable and relevant to the role and company’s goals. Provide guidance when and if necessary. → For more information on how to give feedback, read about the concrete feedback examples. → Need concrete examples of evaluation forms? Download our editable employee evaluation forms. 4. Never compare employees to one another Feedback requires the involved parties to anchor to a reference point so that conversation can be constructive. The reference point should never be the performance of another employee. Instead, the temporal comparison works much better. Temporal comparison compares an employee’s current performance and development to specific goals set in the past. That way, feedback becomes personalized, and employees develop a sense of trust. Further exploring the opportunities that the two-way communication with managers provides, employees’ entire identities are recognized, increasing their sense of belonging. 5. Keep tally While performance management, by definition, demands more time and resources than yearly appraisals, the outcome of establishing a culture of feedback on a more regular basis pays off in the end. Your feedback stats should be easy to reach, and processes should be flexible to fit the different requirements of different roles and departments of your company. To save time and scale feedback processes for large companies, companies should look into some of the many feedback software that exist on the market. Many companies’ attempts at performance management get stuck on outdated and cumbersome tech. The result is an inefficient and slow feedback process. Replace obsolete and inflexible tech that makes performance management slow and inefficient. Instead, find the software that integrates with the core human resources information systems and gives managers more control over feedback activities and access to feedback analytics reports within the company. You’ll never lose track of feedback that way. 6. Reward good performance Humans are only human and will always be more motivated to behave a certain way when that behavior is rewarded. Don’t lose a chance to supercharge employee experience when you infuse feedback with recognition for their efforts. When you tie feedback activities together with your company’s rewards and recognition practice, it produces a twofold beneficial effect on your company’s culture. → See how a Rewards and Recognition tool helps to build company culture around greatness. 7. Be clear on values you reward If you want to foster inclusivity, you need to establish collaboration as one of the golden rules for your company. When helping others and the communal efforts of your employees are rewarded, you are avoiding rewarding greedy employees who triumph at the expense of others. Also, that way, you avoid building a back-stabbing culture that always backfires in workplaces. Conclusion Bias in performance reviews hurts not only employees’ careers but also companies’ bottom lines. Companies must adjust their feedback practices to make the best out of their workforce. This article presented the benefits of performance management for workplaces that wish to become more inclusive. We’ve outlined specific ways to promote diversity and employee engagement by facilitating effective feedback that fosters connection and belonging.