The 2 biggest MISTAKES leaders make with performance reviews

When it comes to performance reviews, there are two big mistakes that I see organizations make time and time again.

Mistake #1 - Discussing performance and compensation at the same time.

It looks a little something like this:

I'm sitting down with you, and it's time to do your performance review. You know that at the end of the review, I'm going to tell you how much money you'll be making next year.

In that same session, I'm giving you constructive feedback. 

In this scenario, will you be more focused on ideas for improvement or how each piece of constructive feedback impacts your compensation? If you’re like most people, it’s the compensation that weighs heavier. That automatically makes you more defensive, and less open-minded.

It’s difficult to summon intellectual curiosity, openness and vulnerability that are crucial to improving performance, when we’re thinking about money. 

Which is exactly why performance and compensation need to be separate conversations. 

Mistake #2 - Using a performance rating scale. 

As part of the performance review process, many organizations rate their team members on a scale of 1 (get your resume ready) to 5 (you're a superstar).

Now your conversation is focused on why you gave her a 3 instead of a 4, or a 4 instead of a 5.  Wouldn’t you rather be talking about how she can…

…do a better job motivating her team.

…build stronger client relationships.

…plan projects more effectively. 

If you need a rating scale behind the scenes to help make compensation or promotion decisions, that’s fine. Just keep it behind the scenes…no need to include it in the performance review. 

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