While 2020 annihilated business as usual at work, it didn’t quite manage to kill off the annual performance review.
But it has brought about changes to the process.
Given the extraordinary circumstances under which most people have been working, many employers are taming the review process, adjusting how they discuss performance, and modifying how they distribute raises and bonuses.
A more compassionate take
Over the course of the year, employees were slammed with emotional and mental distractions thanks to the pandemic, the economic crisis, rabid political divisions and the growing movement to counter systemic racism. Those with school-age children also had to rearrange their work and family lives to accommodate the demands of remote learning.
As a result, “many employers have either encouraged managers to be more lenient in performance evaluations or have formally changed performance expectations and rating scales for their 2020 review cycle,” said Ben Wigert, the research director of workplace management in the consulting division of Gallup, an analytics and advice firm.
While your work will still be assessed, it will be done with an eye toward the “freakish experience” that 2020 has been, said Eric Mosley, CEO of HR technology platform Workhuman. “[This crisis] is transitory. It will end. So making snap judgments in the middle of it is not good for the company or the employees.”
Google, for instance, effectively canceled its mid-year reviews and performance ratings and now is basing its year-end reviews and ratings on revised performance expectations, which take into account individual employees’ personal circumstances during the year, according to a company spokesperson.
Twitter, meanwhile, suspended its performance ratings for the whole year. “Managers still expect employees to deliver against priorities and we will continue to recognize contributions,” a Twitter spokesperson said. “But the overall focus of the year will be on development and feedback, supporting our employees through these difficult times.”
If your company still relies on a scoring system, your employer will likely try to give you a score similar to what you achieved in 2019, Mosley said.
More of a 360 view
Companies are starting to ask managers to take into account what employees’ peers are saying about their efforts as well.
Especially with so many people working remotely, “a lot of managers don’t see all the work their own subordinates do,” Mosley said. “So they try to have performance processes that take in the commentary from peers. If you can get more peer involvement you get a truer picture of performance.”
His company, Workhuman, counts some of the largest companies in the world among its clients and provides an online platform that lets employees offer feedback on their peers’ work and request feedback on their own performance.
But some companies are introducing the idea more informally. WarnerMedia (CNN’s parent company), for instance, is encouraging employees to seek feedback from others when reflecting on their own performance this year or give their manager a list of people they can tap for feedback if they choose. “Focus on what you were able to accomplish this year given the circumstances … using any feedback gathered as data points,” a company tip sheet recommends.
Less variation in bonuses and raises
For companies that did well enough this year to offer bonuses and raises, they still are likely to offer bigger payouts to star performers. But the differential between what the best employees get and what lower performing employees are awarded will be narrower than in the past.
In prior years, for example, a top performer might get a 5% raise while a low performer got a 1% raise. This year the range from high to low could be 3% to 1.5% instead, said Brian Kropp, chief of research in the HR practice of Gartner.
“Employers are concerned with punishing and disenfranchising those at the bottom end of the performance distribution who weren’t able to achieve their outcomes through no fault of their own.”
Facebook, for example, suspended its performance ratings for the first half of the year, paying everyone mid-year bonuses as if they’d earned the top rating.
Of course, this year’s superstar employees might be a little miffed if they feel they’re getting a smaller bonus or raise than they would otherwise.
But they will have leverage to ask for more next year as their current employers become more concerned about turnover, Kropp said. Companies that imposed hiring freezes this year are likely to lift them in 2021. And professional opportunities for top performers will expand beyond their geographic area as more companies continue letting some employees work remotely.
So companies may start offering retention bonuses by the middle of next year if they fear their best players will leave, Kropp said. “Companies are willing to throw money at the problem when it arises.”
More looking ahead than looking back
If 2020 has taught employers anything, it’s that business conditions can change overnight, nullifying the normal objectives and key metrics of anyone’s job.
So reviews this year will be more forward-looking than usual.
“Pre-existing goals may no longer be applicable,” said Melanie Langsett, a principal at Deloitte Consulting. Instead, she noted, this year’s performance reviews are more likely to focus on current priorities and redefine the performance criteria needed to meet them.
And there will be an opportunity to make employees feel better about the future.
“Most employers are focused on having an encouraging, forward-looking discussion about performance, and ensuring metrics or pay decisions are not unfair given the chaos and exhaustion caused by the pandemic,” Wigert said.