When performance evaluations are done right, they give managers a data-driven way to accurately measure every employee’s impact. A good performance review gives decision makers the ability to then set team goals, define individual expectations and support colleagues who may need some extra coaching.


How long have you been using the same performance review format? In this rapidly evolving working world, changing attitudes and emerging technologies mean that what worked for your organization five years ago is probably out of date today.


Whether your organization needs to completely overhaul its performance management system or just make a few adjustments, a successful company depends on how effective your appraisal process is.


Here are seven clear as crystal signs that your performance review may at least need a touch-up, if not a complete facelift.


1. Stress Test: Does the vibe around the office become super stressful as performance review season approaches? A company full of anxious people doesn’t exactly contribute to a happy, healthy working environment.


2. Surprise! Are your people stunned by the feedback they receive at the performance review? If so, this is probably because their supervisors aren’t giving them regular feedback throughout the year.


3. You’re all winners…Evaluators who give even sub-par performers a ‘satisfactory’ rating aren’t being fair to anyone, those people who need to improve or outstanding employees who are being overlooked. It may not be pleasant, but a future-focused review process depends on honesty and calling out poor performances.


4. Not leading by example: If the top people in your organization think they’re immune from performance evaluations, why should anyone else take the appraisal process seriously? Your executives set the pace. They need to model the behaviors they expect of others.


5. Who’s running this thing? Your people will lose faith in the process if they don’t know who’s managing their performance reviews. Is it HR, managers, colleagues or themselves? If every department and manager has one finger in the review process, then no one really ‘owns’ it.


6. Biased feedback? Is your performance review setting goals for your people that can’t actually be measured? If performance expectations can’t be gauged by facts and figures, managers tend to wind up giving subjective or biased feedback to fill the void.


7. They’re not getting better: Does the data show that your people aren’t developing from one review to the next? If so, this is probably because they keep getting the same evaluations from their managers. This lack of deep, thoughtful feedback fails to set a clear path for professional development. And lack of growth is a serious problem since it usually translates into low company morale.


Conclusion: Open the lines of communication, boost the bottom line: Old-school performance evaluations are expensive and deliver very little value. As a result, they can reduce employee engagement and be an obstacle to business growth. But making these nips and tucks to your evaluation process will have an immense long-term impact. Focusing on ongoing feedback and employee development will boost your organization’s bottom line and stop your best and brightest people from walking out the door.

from Gilad Bonjack

Gilad has over 15 years of experience in product and strategy roles and is passionate about creating world-class web and mobile products that customers love. He is currently the VP of Product at Hibob.