Don’t Miss the Social Context of Performance Review

Performance review is the formal process of evaluating employees by using a set of pre-developed criteria. To be effective, performance review must provide an honest, accurate, complete, and fair evaluation of each employee’s performance, benefitting both the individual and the organization. To accomplish this goal, organizations have heavily focused on the technical aspects of review (the process and measurement) while paying little attention to the social context of the performance appraisal (workplace relationships).

That needs to change, but before we try to understand the impact of social context, let me share a few findings from my research:

• Performance review systems have not been developed and implemented in a way to achieve their desired effectiveness despite the widely recognized need for reviews.
• Even when a performance review system was acceptable by design, it was often resisted or rejected by many users due to poor implementation.
• When employees perceived that performance ratings did not accurately reflect their actual work performance, they often reacted to performance reviews negatively.
• The degree of satisfaction with performance review proportionally affected employee’s motivation, job attitude, and work productivity.
• When employees perceived the performance review process as fair, even when review outcomes were unfavorable, they reacted to them positively.
• The quality of supervisor-subordinate relationships influenced the outcomes of performance review. Specifically, subordinates in high quality exchange relationships interacted more often with their supervisors and received more developmental opportunities and positive reinforcement. As a result, they demonstrated more loyalty to their organization, produced higher job performance and felt more satisfied with performance review than employees experiencing low connections with supervisors.
• The way in which a supervisor delivered review results affected subordinates’ perceptions of the entire performance review system. If the supervisor shared performance ratings and feedback in a timely, candid, respectful, and unbiased manner, supported by detailed explanations, then the employee perceived the process as fair and accepted the outcomes in a positive manner.

These evidence-based findings call for a more holistic approach to performance review.

In addition to focusing on the technical aspects, we also need to pay more attention to the human side (the social context) of the review. To do that, employers must invest time to determine how the system users (the supervisors and subordinates) perceive the review system, and the quality of relationships between them.

As a dynamic component of the organization, the social context affects individuals’ satisfaction levels with the organization, their job, and the appraisal process. In the case of performance review, dissatisfaction indicates that the employees’ goals have not been fulfilled as reflected in the feedback they receive. So, pay close attention to employees’ reactions to the performance review, and the way supervisors handle the review process and deliver the review outcomes.

There is a lot supervisors can do to gain their subordinates’ fair perception of the review process. For example, during the review, a substantial amount of interaction and communication takes place between the supervisor (the rater) and the subordinate (the ratee). To ensure these exchanges are perceived as ‘fair’ by the subordinate, the supervisor must demonstrate authentic and helpful behaviors, including to:

• Show respect and courtesy when having a review feedback conversation with the subordinate.
• Tell the truth when sharing performance ratings and feedback and refrain from making inappropriate or prejudiced remarks.
• Provide adequate explanations to justify the review decisions and outcomes.
• Deliver review outcomes in a timely manner.
• Suggest areas of improvement and develop an action plan.
• Focus on future development instead of past performance.

A well designed and implemented performance review system acts as a guardian within an organization and sends signals to the outside world that the company is well-managed and doing things correctly. Properly conducted performance reviews will motivate employees at all levels to assume responsibility for producing optimal results.

As part of the management team, supervisors and managers play a key role in influencing employees’ perception and overall effectiveness of the performance review process. Not only does their relationship with their subordinates matter, but their ability to make sound performance judgment matters as well. If you are in a position to review others’ performance, make sure you exert your influence wisely and sensitively, and invest time to make authentic connections with the people you are evaluating.

To learn more about the social context of performance reviews, please join me at 10 a.m. CT on September 28, 2023 for the third of MSCI’s four-part Talent Management Webinar Series. In this webinar, you will hear a panel of supervisors and managers in the metals industry to share their first-hand experience about conducting and delivering performance reviews. Stay tuned to the webinar calendar here for more information.

Jia Wang is a professor in the Department of Educational Administration and Human Resource Development at Texas A&M University. Her research focuses on international and national human resource development, organization crisis management, and learning within organizations.