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A whopping 86% of you are not happy with your current employee evaluation practices, says industry research firm CEB. And yet, only 3% of organizations are doing anything of substance about itThe rest are tinkering on the surface, tweaking things like goals, rating scale or criteria, and getting nowhere, writes David Rock for the Harvard Business Review.

It’s no secret that outdated performance review methods not only do NOT work in today’s marketplace, but can actually cripple organizations and employee engagement. It’s epidemic, really. Think we’re exaggerating? A simple Google search turns up study after study and gobs of expert analyses on the inefficiency of traditional, annual performance reviews.

As a first step to countering this problem, Rock suggests a simple idea: A 5-point rating scale for performance management itself. 

Your current employee evaluation system should fall into one of the following tiers:

Tier one: “Needs to go”

While your performance management system showed promise during recruitment, it’s turned out to be a dud. It hasn’t achieved any of your company goals. Worse still, no one wants to work with it anymore. It’s time to move this system on to new pastures.

Tier two: “Needs improvement”

Despite achieving a few goals and having good technical skills, [your employee evaluation system] often rubs people up the wrong way. People complain about its lack of authenticity, inflexibility, and glaring blind spots. In short, the system is underperforming and needs to have a breakthrough soon if it is going to stick around.

Tier three: “Good but inconsistent”

Your [employee evaluation] system is like the wind in summer. Things fly along, then there are long stretches of nothingness, people becalmed in a sea of unmotivated action, waiting for something better — feedback of any sort, a career discussion, any puff of positive wind in their sails. You wish your system raised performance more consistently throughout the year, yet you can’t quite bring yourself to let it go, because, sometimes, it works.

Tier four: “Strong performer”

Your system does a solid job most of the time. It gives employees the feedback they need to feel appreciated once in a while and helps them generally understand how they can develop. While not a stellar system, you’re happy with what you have and can’t see yourself firing this system any time soon. You’d love it to be a top performer, but hey, at least it’s consistent.

Tier five: “Top performer”

Your performance management system consistently motivates top talent, stretches mid-level performers, and helps your low performers self-select out. When times are tough and bonuses are tight, your performance management system helps folks stay engaged for better times. Everyone who works with your performance management system loves it, and wishes they could be it when they grow up.

Where does your employee evaluation system rank?

And what are the financial, compliance, productivity and human resources costs of letting it continue at the current level?

To start developing an effective employee evaluation program for your organization, you need the right software. Learn how our employee evaluation software has helped hundreds of organizations revolutionize their evaluation programs. Request a free demo and receive a free trial of our solution today.

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