Performance reviews are a fundamental leadership activity and a powerful instrument in the leader’s toolbox if used appropriately. Performance reviews provide leaders exceptional opportunities to connect with employees. However, as Goleman points out in his book ‘The New Leaders’ trust is a critical element that must exist to foster learning and resonance. Performance reviews provide an opportunity for leaders to build trust and a strong and enduring connection with their subordinates.
Performance reviews have a profound impact on employee motivation.
Gary Vikesland explains, in his article ‘Use the Performance Review to Motivate Employees’, that inaccurate performance reviews, and indeed whether performance reviews are performed at all, have a profound impact on employee motivation.
how accompanying pay increases can drive unproductive behaviours, and can serve to demotivate employees in certain combinations with performance reviews.
- that one of the key determinants of employee motivation is the accuracy of the performance review and not pay increases.
- that inaccurate reviews demotivate employees even if a pay increase is offered.
- that inaccurate performance reviews combined with no pay increases, not only demotivates, but may also lead to high employee turnover rates.
- that reviews should be ‘an ongoing yearlong process’ where feedback, support and coaching is provided to enhance performance as opposed to a once a year exercise with no support for development.
Inaccurate reviews have the potential to create the very ‘toxic’ environments that Goleman warns us to avoid in the quest for resonance, connection and motivation. Inaccurate reviews, in a sense, violate trust and have the potential to sabotage employee relationships and are therefore demotivating.
In conclusion, there is strong case for leaders to adopt a coaching leadership style and in so doing ensure that they are open, straightforward, honest and sincere when providing feedback to employees through performance reviews where this is an ongoing yearlong process to nurture and foster employee motivation.
Comment below with your performance review mantras or faux pas…