Why is investing in performance enablement important? What business value does it provide?

Drive business outcomes – At its core, performance enablement is about driving tangible business outcomes. Having the right people in the right roles, and delivering exceptional work, is fundamental to achieving organizational objectives. Especially in lean and early-stage companies, optimizing performance is essential for survival and growth.

Enhance employee engagement – high employee turnover can harm a business, losing valuable intellectual property and brand loyalty. Investing in performance enablement not only helps retain talent but also boosts engagement. When employees feel recognized and valued for their contributions, they are more motivated to actively participate in the company’s success.

Foster talent development – as companies mature, performance reviews become invaluable tools for identifying strengths and areas for improvement in employees. Tailoring development plans and providing growth opportunities not only benefit individual employees but also contribute to the organization’s overall success. Stretch assignments and diverse experiences enable employees to expand their skill sets and contribute to business outcomes in meaningful ways.

Promote accountability and ownership – performance enablement instills a culture of accountability within the organization. By holding individuals responsible for their performance and outcomes, organizations create a framework for recognizing results and promoting ownership. This accountability fosters a culture of responsibility where every member of the organization is committed to achieving shared goals.

Giving Feedback

What are the benefits of giving effective feedback?

Operational benefits:

• Establishes clear expectations – feedback sets clear expectations for both individuals and the organization. In today’s complex hiring landscape, where job roles and expectations may be ambiguous or constantly evolving, feedback serves as a crucial mechanism for aligning perceptions and understanding what success looks like in a given role. 
• Recognize strengths and opportunities – feedback offers an opportunity to recognize and reinforce an individual’s strengths while also identifying areas where they can enhance their performance. By acknowledging achievements and offering constructive criticism, managers can help employees grow professionally and contribute more effectively to the organization’s success.

Relational:

• Builds trust and communication – effective feedback fosters trust and open communication within the organization. It provides a platform for meaningful conversations about an individual’s contributions, strengths, and areas for improvement. By creating a culture where feedback is valued and encouraged, organizations can strengthen relationships between employees and managers, leading to greater engagement and collaboration.

Employee development:

• Promoting continuous improvement – feedback isn’t just about pointing out what went wrong; it’s about fostering a mindset of continuous improvement. By providing timely and specific feedback, managers can guide employees in refining their skills, overcoming challenges, and striving for excellence. This iterative process of feedback and adaptation is essential for driving individual and organizational growth.
• Empower performance ownership – feedback empowers individuals to take ownership of their performance and development. By understanding how their actions impact the organization and receiving guidance on how to improve, employees become more proactive in driving their own success. This sense of ownership not only enhances individual performance but also contributes to a culture of accountability and shared responsibility within the organization.

What does good feedback look like?

Address specific actions and behaviors –  well-delivered feedback provides clear examples and observable evidence. Vague comments like “good job” lack meaning and fail to guide improvement. Instead, effective feedback highlights precisely what was done well or requires adjustment. How you deliver feedback is more important than what you are addressing.

Constructive intent to help the recipient grow and improve – avoid criticism for criticism’s sake (which can be hurtful or disrespectful) and instead focus on actionable steps for enhancement. Feedback delivered with genuine care and the desire to see positive change fosters trust and mutual respect.

Timely feedback is crucial for maximizing its impact – delayed feedback diminishes its relevance and effectiveness, leaving employees feeling blindsided or frustrated. By providing feedback promptly, managers empower employees to address issues promptly and prevent recurring issues. It can be helpful to deliver verbal feedback first. 

Create an environment conducive to receptivity– seeking permission before offering feedback respects the recipient’s autonomy and readiness to receive input. Moreover, delivering feedback in a distraction-free setting, whether face-to-face or virtually, enhances communication and understanding.

Create a two-way dialogue – effective feedback promotes a two-way dialogue rather than a one-sided conversation. Employees should feel empowered to seek clarification, ask questions, and provide their perspective. This fosters a culture of open communication and continuous improvement.

On what cadence should managers give feedback?

Aligning with organizational cycles – feedback cadence should align with the natural cycles of your organization and industry. For example, engineering teams might operate in sprint cycles, while finance companies may follow quarterly rhythms. Understanding these cycles helps determine the most opportune times for giving feedback.

There are several overlapping cycles on which to deliver feedback:

On a daily basis: Avoid day-to-day feedback overload – while day-to-day feedback has its place, overwhelming employees with constant feedback can be counterproductive. Instead, focus on creating a cadence that balances regular check-ins with opportunities for deeper reflection and goal setting.

On a weekly basis: Team reviews – these meetings provide opportunities for team members to reflect on their performance, share successes, and discuss areas for improvement. Encourage open dialogue and empower individuals to voice their needs and concerns.

On a quarterly basis: Formal quarterly check-ins – implement structured meetings, where employees and managers discuss achievements, goals, and support needs. This approach promotes accountability and empowers employees to drive their own development. Be sure to cover:

• What did you do well?
• What have been your major achievements?
• What do you want to accomplish going forward?
• What do you need to do to make that happen?

How should you document your feedback during and outside of 1:1?

Creating a living document – to track progress and goals over time. The employee should be responsible for this document. This document serves as a reference point for ongoing discussions and ensures that feedback is grounded in tangible achievements and aspirations.

Encourage employees to take ownership of their feedback by having them fill out a template – outlining their achievements and goals before one-on-one meetings. This empowers employees to reflect on their performance and articulate their needs, fostering a collaborative dialogue with their manager.

Performance Reviews and Performance Comp

What is the purpose of formal employee reviews?

Opportunity to gather summative feedback – these sessions provide an opportunity for managers to assess an employee’s performance, provide constructive criticism, and recognize achievements. Feedback helps employees understand their strengths and areas for improvement, fostering professional growth and development.

Identify training needs and facilitate improvement – by discussing performance goals and objectives, managers can identify areas where additional training or support may be beneficial. This ensures that employees have the resources and skills necessary to excel in their roles and contribute effectively to the organization.

Align objectives with company goals – employee reviews serve as a mechanism for aligning individual objectives with the overall goals of the company. Managers and employees can discuss how individual contributions contribute to broader organizational objectives, ensuring alignment and focus on strategic priorities.

May help inform compensation, promotion, and business decisions – reviews provide valuable input for managers and business leaders to make informed decisions about employee compensation, promotions, and career advancement opportunities. While these factors are important, they should not overshadow the broader purpose of employee reviews in fostering growth, development, and alignment with organizational goals.

Who should own formal reviews with employees? Who else is involved and what are their roles?

Proximity to the day-to-day work determines who should be involved – the individual or individuals most familiar with an employee’s contributions, challenges, and achievements should take the lead in conducting reviews.

Likely participants in formal reviews
Position	Role in reviews
CEO and Senior Leadership	May be directly involved in performance reviews, especially in smaller startups. They hold ultimate responsibility for overseeing the process and ensuring alignment with organizational objectives.
Human Resources	Facilitators of the performance review process. They may provide training and guidance to managers, coordinate scheduling, and ensure compliance with company policies and procedures. HR professionals also serve as a resource for employees and managers seeking guidance on performance-related matters.
Direct Managers	The primary responsibility for conducting performance reviews lies with employees’ direct managers. They are closest to the day-to-day work and are best positioned to evaluate performance, provide feedback, and set goals. Managers play a pivotal role in fostering employee development, addressing performance issues, and aligning individual goals with organizational objectives.
Employees	Don’t forget that employees are active participants in the performance review process. They have a responsibility to prepare for reviews by reflecting on their performance, gathering feedback, and setting goals for future growth and development. Employees should actively engage in discussions with their managers, seek clarification when needed, and take ownership of their professional development.
Peers and Stakeholders	In some cases, feedback from peers and stakeholders may also be incorporated into performance reviews, particularly in professional services firms or through 360-degree feedback processes. Peers and stakeholders provide valuable insights into an employee’s collaborative skills, communication abilities, and impact on team dynamics.

When during the year should you hold formal performance reviews?

Quarterly reviews facilitate frequent and holistic reflection on performance – structured quarterly sessions allow for in-depth discussions about achievements, goals, and support needs. They mitigate recency bias by offering more opportunities throughout the year to reflect on their performance and receive feedback, and reduce the influence of recent events on evaluations.

Quarterly reviews can create the backbone for an annual performance review cycle – at the end of the year, the company should conduct a comprehensive performance review cycle involving all employees. This cycle typically includes discussions about ratings, compensation, and promotion opportunities. However, the annual review should not be the only time feedback is given, as relying solely on yearly reviews can lead to recency bias. Larger companies may consider biannual performance reviews.

Note: If you do reviews annually, consider multiple promotion cycles – providing multiple promotion cycles throughout the year, rather than solely at year-end, can positively impact employee retention and productivity. Employees feel motivated and supported when they know there are opportunities for recognition and advancement within a shorter timeframe. This approach fosters a culture of continuous improvement and empowers employees to strive for excellence throughout the year.

What kinds of expectations should you set for managers during the meeting?

Establishing a culture of feedback requires commitment from top leadership – CEOs and COOs must lead by example, demonstrating active engagement in feedback sessions and embodying the values of people management as integral to their roles.

Incorporation into job descriptions – people management expectations should be explicitly outlined in job descriptions for managers. This includes understanding and investing in the work of direct reports, as well as being prepared and mentally present during feedback sessions.

Preparation and mindset – both managers and employees should approach feedback sessions with thorough preparation and the right mindset. Preparation goes beyond reviewing documents—it involves mental readiness and emotional intelligence to engage in meaningful dialogue. Managers should allocate time beforehand to review performance documents and reflect on feedback, while employees should take the initiative to assess their own performance and goals.

Active participation from both parties – managers should actively listen to employees, provide constructive feedback, and ensure clarity and understanding. Employees should engage in reflective discussion, seek clarification when needed, and take ownership of their development goals.

Cultural belief in feedback – cultivating a culture of feedback requires collective buy-in from all employees. Organizations should articulate clear expectations for feedback activities, such as Quarterly Connects meetings and weekly team discussions, and reinforce these behaviors as integral to the company culture. Non-compliance with feedback practices may be reflected in performance reviews, underscoring the importance of active participation at all levels.

What tools can help with capturing feedback and facilitating formal reviews?

Performance management tools streamline the review process – and facilitate data collection and analysis. HR and managers may leverage technology platforms like Lattice or BambooHR to document feedback, track performance metrics, and generate insights to inform decision-making.

Look for vendors tailored to your company size – startups should avoid overinvesting and look for smaller, agile startups developing performance management tools tailored to the needs of growing companies. These solutions may offer basic features at a lower cost and provide opportunities for collaboration and feedback exchange. Larger organizations should consider established platforms that offer comprehensive performance management solutions suitable for larger companies with more complex requirements.

What are the steps to running performance reviews? What does the agenda look like?

The duration of the performance review should be agreed upon – by both the manager and the employee, typically around 45 minutes. The employee should feel ownership of the process by requesting the meeting and scheduling it themselves.

Sample Performance Review Agenda
Establishing the Right Environment	The first few minutes of the meeting should be dedicated to ensuring that both parties are in the right headspace to have a productive conversation. This involves setting aside any distractions and establishing a comfortable atmosphere.
Review of Achievements	The bulk of the meeting should focus on reviewing the employee’s accomplishments and strengths during the review period. This should be a collaborative discussion where the employee shares their proudest achievements and the manager provides feedback and validation.
Discussion of Goals and Development	The next portion of the agenda should involve discussing the employee’s goals and aspirations for the future, as well as the organization’s expectations. This conversation should be forward-looking and aim to align the employee’s development with the company’s objectives.
Action Planning	The meeting should conclude with a discussion of actionable steps and expectations for the upcoming period. This includes clarifying how success will be measured and documenting agreed-upon goals and objectives.
Upward Feedback	Encourage upward feedback by inviting employees to provide feedback to their managers as well. This can be included in the agenda and can help foster a culture of open communication and continuous improvement.
Anonymous 360 Feedback	Consider implementing anonymous 360-degree feedback mechanisms for a comprehensive understanding of performance from multiple. This can provide valuable insights for both managers and employees.

How can you increase the accuracy and decrease biases to ensure that reviews are fair and consistent across your organization?

Implement a structured review process –  implementing a structured review process ensures that all employees are held accountable and receive consistent feedback. This helps mitigate bias that may arise from informal or ad-hoc review methods. Conducting reviews on a scheduled basis helps to eliminate recency bias, where only recent achievements or shortcomings are remembered and evaluated. 

Gather multiple sources of feedback and maintain transparency – encourage feedback from multiple sources, including peers, subordinates, and other stakeholders, in addition to direct managers. This provides a well-rounded perspective on an employee’s performance and behavior. Implementing a 360-Degree feedback mechanism in particular can help identify blind spots and areas for improvement from different perspectives. Clearly communicate how decisions are made regarding performance evaluation, promotions, and compensation. 

Bias training is necessary for all companies – provide bias training to managers and employees to raise awareness of unconscious biases and their impact on the feedback process. Training should include recognition of biases and strategies to mitigate their influence on decision-making.

Should you have performance ratings? What types of rating scales are most effective?

Early-stage companies should focus on behaviors rather than formal ratings – the focus should be on getting the right people into the right role to help the business be successful. Ratings become more relevant as the company grows and the need for structured performance evaluation arises.

If you use ratings, make the scale an even number – when implementing a rating system, opt for an even number scale rather than odd numbers. This avoids ambiguity and provides clearer distinctions between performance levels. For example, a 4-point scale (e.g., 1-4) can be more effective than a 5-point scale (e.g., 1-5). The 5 point scale renders 3 ineffective – people need to understand if they are meeting expectations or exceeding them.

Apply a bell curve distribution – utilize a bell curve distribution to allocate ratings across the workforce. This ensures that a small percentage of employees are rated at the extremes (top performers and low performers), while the majority fall within the “meets expectations” category. This will also help you identify your top performers: this is most relevant to large companies, enabling targeted investment in development opportunities and recognition for exceptional performance.

• Does not meet expectations – 10%
• Meets expectations – 60% 
• Exceeds expectations – 20% 
• Highest Performers – 10%

Align ratings with reward structures – to recognize and incentivize desired behaviors and outcomes. Performance ratings should inform compensation decisions, promotions, and talent management strategies.

Should compensation be discussed in performance review meetings?

Separate performance and compensation discussions – avoid conflating performance evaluations with compensation discussions. Compensation decisions should consider various factors, including individual performance, the financial health of the company, market trends, and employee contributions beyond performance metrics. While performance should influence compensation decisions, they are distinct aspects of the employee experience.

Offering non-financial rewards can help retention – employees never believe that they are being paid enough, but remember that people are much more complicated than the number that goes into their pocket. Highlight the value of non-financial rewards such as learning opportunities, mentorship, autonomy, and a supportive work environment in fostering employee engagement and retention.

What types of collateral do you have to support performance reviews?

Quarterly Connect documentation – regular documentation of performance discussions and goals achieved during Quarterly Connect meetings. This includes highlighting accomplishments, areas for improvement, and action plans for future growth. The document is owned by the employee.

Performance Improvement Plan (PIP) – when an employee’s performance is below expectations, a PIP outlines specific goals and timelines for improvement. It serves as a formal agreement between the employee and the manager, documenting the steps required for performance enhancement. Name the specific things that you need someone to do. If they are not a good performer, they will not meet these expectations, and this will become important legal documentation.

Legal documentation – depending on local employment laws, ensure that all performance-related discussions and actions are documented appropriately to mitigate legal risks associated with performance management and termination. In Canada and the UK in particular, it can be very difficult to fire people. 

Potential model evaluation – implement a potential model to assess employees’ future growth and development prospects. This involves identifying employees’ potential and providing support to nurture their skills and capabilities. How do you identify and nurture potential? – you can have good performance, and have no more potential – you could be doing really crappy work and still have potential. 

Feedback and Evaluation Tools – implement feedback mechanisms, such as 360-degree feedback surveys, to gather insights from peers, subordinates, and other stakeholders, contributing to a comprehensive performance evaluation process.

How do managers need to be set up to properly handle performance reviews?

Offer training and development – provide comprehensive training for managers to equip them with the necessary skills for effective performance management, including giving feedback, delegation, time management, team development, and strategic decision-making.

Encourage managers to own development and performance management processes –  empowering them to drive continuous improvement and growth within their teams. Foster a culture of trust within the organization by ensuring transparency, open communication, and clarity around goals and expectations.

Overall

What are the most important things to get right?

Build Trust and Clarity – establish trust within the organization and ensure clarity around common goals and objectives to align efforts and drive performance effectively. Without trust and clarity, performance enablement can do very little. 

Establish a consistent feedback cadence – establish a consistent and meaningful feedback cadence that suits the organization’s needs and industry dynamics to facilitate continuous improvement and development. Remember that company size, revenue, and culture all impact what the correct cadence can look like. 

Integrate the right technology into your process – implement appropriate technology solutions tailored to the organization’s size and needs to streamline performance management processes and enhance efficiency. 

Emphasize individual accountability – encourage employees to take ownership of their career development and performance within the established framework. The responsibility of reviewing performance cannot be left to only the manager.

What are common pitfalls?

Lack of Consistency – inconsistency in practicing what is preached, leading to a disconnect between managerial expectations and actions.

Lack of Transparency – failure to maintain transparency in communication and decision-making processes, resulting in confusion and mistrust among employees.

Poor Communication – ineffective communication practices, including ambiguity, inconsistency, or lack of clarity, which can hinder employee engagement and performance.