Revisiting goals and rewards during crisis
In recent months amid the COVID-19 lockdown, performance reviews and reward systems have been thrown into limbo.
During this time of disruption, and as we ease back into office life, operating as close to ‘business as usual’ is important. As SHRM suggests, it is critical for organizations to manage operations with minimal loss and disruption to the normal business flow. This offers some of the psychological safety, normality, and comfort that people often find in the routine of daily life at work. Performance reviews and reward systems help foster this normality by providing individuals direction and the opportunity to make progress in their careers despite everything changing in the world of work. Performance reviews also serve as a process that contributes to the effective management of individuals and teams in pursuit of organizational success.
However, ‘business as usual’ is not possible for many companies right now. We are all facing unchartered territory; learning and adapting as we go.
Yet, discontinuing performance evaluations could result in lost performance data at a time when leaders are expected to make tough decisions.
At the same time, pausing on a formal process of sharing feedback and recognition, could lead to plummeting engagement when companies most need employees to be aligned with the organization’s mission, and feel fairly treated and productive.
Consider the following tips to ensure a strong performance framework that enables your people to grow and strive through these tumultuous times and beyond.
Adjust goals individually and as a team
Right now, employee productivity may be compromised due to crisis-induced circumstances including fully remote work, caregiving responsibilities, and all the other frustrations that 2020 has brought. The emotional strain of what people have been and are still going through cannot be underestimated and must be met with empathy.
For many organizations, this means to revisit expectations around work hours, communication and responsiveness during the day, and prioritization of tasks as well as goals. Goal setting helps employees understand what is expected of them, and when done right, it creates alignment to the organization and improves motivation, satisfaction, determination, and employee persistence.
As a critical component of performance management, goals should be adjusted to reflect the changes in the day-to-day work of employees as well as the changes in strategy that might have been made due to the pandemic.
Managers and employees should adjust individual goals in a collaborative fashion, i.e. agree on what must be accomplished while considering what is realistic for an employee to achieve depending on their current circumstances. When employees have a voice in setting their own goals and aligning them to company initiatives, they tend to set higher goals and have higher performance than those whose goals were assigned by their manager. Given the changing nature of what we are experiencing, we recommend revisiting set goals often - ideally each month, or every other month.
Include peer feedback
Performance review conversations can be a daunting experience for managers and employees when they are not carried out properly. During a pandemic where there is a lot of uncertainty and economic downturn, employees’ worries are likely to be amplified. Best in class performance evaluation processes include input from people who work with the employee and the employee themselves. Solely relying on managers’ judgment in reviews could invite tons of bias in your process.
Cognitive biases (e.g. gender bias, confirmation bias, recency bias, etc) are systematic errors in thinking that affect decision and judgment and some of these biases are amplified during this pandemic.
For instance, proximity bias - the notion that people place higher value and impact on work that they actually see or are directly aware of. In a virtual working environment, we might be inclined to discount work that we are not seeing ourselves. Considering other peoples’ perspectives on an employee’s work is therefore crucial to be able to evaluate their work fairly. Managers and employees may find giving and receiving constructive feedback more difficult when it is only based on the manager’s perspective. This can lead to frustration, disengagement, higher turnover in both parties, and less accurate performance information available to the organization on which long-term planning, decisions, and forecasting are often based on. Thus, it is crucial to include peer feedback, while ensuring that your review questions are objectively asking about an employee’s behaviours, growth, and performance against goals and expectations while considering the impact of COVID-19.
Be kind but clear with incentives and bonuses
One final consideration that should be part of any discussion around performance evaluations is the topic of incentives. During a pandemic, bonuses can be a lever to pull, either to support your employees by giving out bonuses, or to save money through tough times by cancelling bonuses.
Some organizations have given or intended to give everyone the same performance rating and thus the same bonus amid the pandemic. This can have negative consequences on your organizational performance in the short and long-term. High-performing employees could lose motivation after working extra hard and not receiving sufficient recognition compared to others, which could lead to a potential drop in productivity or become a retention risk. Low-performing employees could view this as a sign that a mediocre performance might be ignored or accepted and will have little motivation to improve. Finally, motivated employees who were working hard but were just not there yet might miss out on key conversations and learning and development opportunities to improve their performance. These employees might lose motivation and you might lose a future high-performing employee.
If you’re considering providing financial support for employees during times of uncertainty, we recommend to clearly communicate that any monetary aid is not tied to performance or considered a bonus.
If performance-based bonuses are a normal and expected part of your compensation system and you can still afford to honour them, maintaining this will be important during COVID-19. In fact, research (conducted by BCG) following the 2008 financial crisis suggests that not paying out bonuses had a negative impact on individual and company performance.
However, during a pandemic, some organizations might simply not have the option of giving out bonuses as it might threaten their ability to remain in business. If this is the case at your organization, be transparent in communicating why that decision was made and what employees can expect in the future.
Promotions and recognition
The same principles apply for promotions following performance reviews. If an employee deserves a promotion and a raise, they should receive it. If an organization is not able to give out pay raises, clear communication, and a commitment to a later raise as well as considerations of other benefits, are appropriate. Finally, no matter your circumstances, foster feedback exchange and recognitions. This can be as simple as calling out exceptional efforts over a public Slack channel or all-hands calls, virtual ‘badges’ for tasks or learning completed, sending thank you cards in the mail, or rewarding the whole team with additional time off to thank them for their hard work.
The small things that show consideration will go a long way to making a person feel appreciated, despite financial and job-related compromises.