If your organization's leadership isn't using performance evaluations correctly, it's time to make some changes. For starters, leaders should be evaluated primarily on how well they lead.
Dreaded by employees and managers alike, yearly reviews can be a contentious topic even among HR professionals. The Harvard Business Review reported in 2012 that 45% of HR leaders don’t think annual performance reviews are an accurate appraisal for employees' work. Indeed, there are many organizations across all industries for which yearly performance evaluations are simply a meaningless bureaucratic exercise.
But in healthcare, being focused on goals and aware of responsibilities means the difference between receiving strong HCAHPS scores and weak ones; full Medicare reimbursement or not; and, frequently, the difference between life and death for patients.
HR is in the perfect position to ensure yearly reviews are used as a tool that will propel organizations in the right direction.
"It is within HR leadership's toolkit to redesign performance evaluations to become a meaningful process to help the organization meet its objectives," says Carol Boston-Fleischhauer, managing director of educational services at The Advisory Board Company, a consultancy which specializes in healthcare improvement headquartered in Washington, DC. "Performance evaluations are an opportunity to get employees aligned with where the organization is moving, and excited to be a part of that journey."
1. Understand What a Performance Evaluation is Not
It is vital to keep the purpose of performance evaluations clear: They are a check-in to gauge an employee's contribution in helping the organization to meet its goals. That means it's not a good forum to discuss personal goals, such as taking a public speaking class or going back to school.
"I suppose managers do that more out of convenience than anything else," says Boston-Fleischhauer, "If you track individual goals and professional development goals as part of the cycle of performance evaluation, there's a convenience there, but frankly, I can't identify why some organizations bundle them," she says.
Additionally, performance evaluations are not just an end-of-the-year exercise—they are something that should be worked on throughout the year. It's much easier for a manager to write a fair, accurate evaluation of an employee if they have been taking notes and documenting incidents—both positive and negative—throughout the year.
2. Different Ranks, Different Reviews
Most sample review sheets you would find on popular HR websites or other one-size-fits-all sources typically evaluate the employee on their responsibilities and behaviors. Boston-Fleischhauer doesn't think this is necessary for employees in leadership roles.
"What we suggest people think about when building a performance evaluation strategy is: What is the focus of a performance evaluation at each level? We find frontline staff needs clarity. Frontline employees are focused on primary responsibilities. We find you don't need that as you go higher and higher up in the organization.
"Create performance evaluations with the assumption that those in leadership roles know what their duties are. Are they using their duties to advance the organizational goals? They should demonstrate behaviors from the leadership standpoint to mobilize those who work under them," suggests Boston-Fleischhauer.
In short, low-level employees' duties need to be spelled out in evaluations. Leaders, however, should be evaluated primarily on how well they lead.
3. Keep Goals Focused
Yearly, the organization's leadership and HR team should look at areas where improvement is needed and set goals around these findings. Performance goals for employees should be designed to move the organization in the direction of accomplishing those goals.
"Keep the performance goal setting process as focused as possible, in alignment with the strategic plan of the organization," suggests Boston-Fleischhauer. Start with goals for the CEO, then the other C-suite executives. Then, have the execs draw up goals for their reports based on those goals, who will draw up goals for their reports, and so on. "Goals should be cascaded from the CEO down to frontline employees," she added.
Treat performance evaluation as a tool, not a task. Their purpose is to make sure all employees across the organization are on the same page and are clear regarding what actions they should take to contribute toward the organization's success.
4. Fight Grade Inflation
Remember how some teachers in high school gave every student in their class a C or above, even if they never did their homework and slept through tests? Some managers use the same strategy when doing performance evaluations—everyone gets an automatic "commendable performance."
This is a problem because it doesn't allow that department to accurately describe their progress in helping the organization to meet its goals. It also allows lackluster employees—not to mention lackluster managers—to hide within your organization.
The fix for this is to hold managers accountable for defending their evaluations. Do a comparison of ratings at the end of the year in each department and compare ratings to overall unit performance. "The ratings should be a direct reflection as to whether or not [the department] met its goals. If all employees were rated as "commendable" or above but the department is mediocre or below in performance, there's a flaw," says Boston-Fleischhauer.
If your organization makes a concentrated effort to view performance evaluations as a tool to ensure everyone understands their goals and responsibilities, your evaluations can be transformed from an intimidating exercise in checking off boxes to a genuine driver to help the organization become successful.
"We're in an A for outcomes world," says Boston-Fleischhauer. "We're not paid for process or effort, we’re paid for results. If the system is not focused on targets set in terms of results, the organization will suffer."
And there's never a better time to make sure everyone is focused than when creating goals for the year ahead.
Lena J. Weiner is an associate editor at HealthLeaders Media.