1. Driving Employee Engagement Through Performance Reviews
CEB HR Leadership Council TM For Midsized Companies
Driving Employee Engagement Through Performance Reviews
Delivering Performance Reviews
Speaker’s Notes
Welcome to Driving Employee Engagement through Performance Reviews, Delivering Performance Reviews.

2. CEB HR Leadership Council TM For Midsized Companies
Review
25%
Performance
Retention
35%
Speaker’s Notes
In past presentations, we learned that high-quality performance reviews can produce substantial rewards: up to a 25% in increase in performance and a 35% increase in retention. Given this significant impact, performance reviews are one of the key ways managers can drive their employees’ engagement.

3. CEB HR Leadership Council TM For Midsized Companies
Review: Continued
Speaker’s Notes
We also learned that only 37% of managers are actually considered effective at evaluating performance through formal reviews, but that all managers can increase their effectiveness by focusing on two key areas: performance review preparation and performance review delivery.
In this presentation, we’ll focus on the second key area for improving performance review effectiveness: delivering the review.

4. CEB HR Leadership Council TM For Midsized Companies
Presentation Review
Use Effective Language
Encourage Employee Input
Communicate Performance and Pay Differentiation
Speaker’s Notes
During today’s training, we’ll address the key do’s and don’ts of performance reviews to help you master the three imperatives of high-quality review delivery: using effective language, encouraging employee input, and communicating differentiation.
We’ll start first with a conversation about effective language.

5. CEB HR Leadership Council TM For Midsized Companies
Use Effective Language
Uses Overly Negative Words
Common Pitfalls
Makes Value Judgments
Makes Generalizations
Example:
“The main weakness that I’d like for you to focus on is attention to is your lack of administrative details. You never submit paperwork on time and did a really bad job managing the Bouchard account as a result.”
“The main weakness that I’d like for you to focus on is attention to is your lack of administrative details. You submit paperwork on time and did a really bad job managing the Bouchard account as a result.”
never
“The main that I’d like for you to focus on is attention to is your lack of administrative details. You never submit paperwork on time and did a really bad job managing the Bouchard account as a result.”
weakness
“The main weakness that I’d like for you to focus on is attention to is your lack of administrative details. You never submit paperwork on time and did a really job managing the Bouchard account as a result.”
bad
Speaker’s Notes
We start with an example of how less effective reviews are communicated by highlighting a few of the most common mistakes managers make when delivering formal reviews. As you’ll see within the rehearsed delivery on the right hand part of the slide, this manager has run into some of the more common pitfalls around communicating during performance reviews.
First, she uses an overly negative word, “weakness”, to describe the performance issue. This phrasing frames the feedback as something inherent to the direct report or as an irreversible problem.
Second, this manager makes a generalization. Generalizations like as “always” and “never” can hurt the credibility of your feedback.
Finally, this manager makes a value judgment of her direct report, rather than describing how a particular behavior did or did not meet the performance expectations that were set.
As we transition to the next slide, you’ll see how best to improve upon this ineffective review delivery.

6. CEB HR Leadership Council TM For Midsized Companies
Use Effective Language
Do…
Emphasize words of encouragement
Be descriptive when giving examples
Frame problems as development opportunities
Speaker’s Notes
How could the review we just discussed be improved? We note a few changes here that should be incorporated by the manager to more effectively share feedback.
First, the manager should frame problems as opportunities for improvement, rather than inherent weaknesses. Using terms such as “development area” rather than “weakness” more accurately positions the behavior or action as something that can be changed or improved moving forward.
Second, the manager should be descriptive when giving examples of behavior and explaining particular improvements to make. Unlike generalizations and value judgments, detailed, descriptive feedback helps the employee understand exactly what behaviors or activities the manager is referring to. This not only supports the validity of your feedback, but it also ensures that the employee leaves the conversation with an action plan moving forward. In practice, for example, the manager could note, “I thought the way you managed the client’s problem was innovative and professional. I particularly liked the way you (share specific behavioral anecdote).”
Finally, the manager should emphasize words of encouragement—this reinforces the message that development areas are opportunities to improve performance, while assuring employees of your confidence in their ability to improve. This type of feedback could look like, “Overall, your analytical skills are improving steadily; moving forward, I will continue to provide you with support to get your abilities to the next level”.

7. CEB HR Leadership Council TM For Midsized Companies
Use Effective Language – Summary
Do…
Emphasize words of encouragement
Be descriptive
Frame problems as development opportunities
Use overly negative words
Don’t…
Make value judgments
Make generalizations
Speaker’s Notes
In summary, to maximize the effectiveness of the language used during performance reviews, avoid overly negative words, generalizations, and value judgments.
Instead, frame problems as areas for improvement, be descriptive when giving examples of behaviors and suggestions for improvement, and emphasize words of encouragement.

8. CEB HR Leadership Council TM For Midsized Companies
Presentation Review
Use Effective Language
Encourage Employee Input
Communicate Performance and Pay Differentiation
Speaker’s Notes
Next, we’ll move to addressing the steps you as a manager can take to encourage employee input during performance review meetings.

9. CEB HR Leadership Council TM For Midsized Companies
Encourage Employee Input
Avoid difficult questions
Common Pitfalls
Express dissatisfaction with performance management systems/decisions
Become defensive or apologetic
Example:
Situation: The employee asks a question I’m not sure how to answer
Response: “I have no idea what the answer is. Maybe someone in HR can tell you.”
Situation: The employee is angry
Response: “I’m sorry if this is coming across as harsh”
Response: “You’re the one with a performance issue--attacking my ability as a manager won’t change your rating”
Situation: The employee thinks they should have gotten a different rating
Response: “I didn’t want to give you this rating, but I had no choice given how our system works.”
Speaker’s Notes
In addition to rehearsing the language she’ll use to share her feedback, this manager also rehearses how she will respond to certain questions or reactions from her direct report. This is an excellent way to prepare, but she’s run into another set of pitfalls that will prevent her from effectively encouraging employee input during the review.
First, she avoids addressing difficult questions and defers them to someone else. This can suggest that she doesn’t value the employee’s questions and concerns and make him or her less likely to speak up in the future.
Also, her responses to negative employee reactions are either apologetic and/or defensive. These responses don’t prompt an overly emotional negative response from your direct report, but instead they can undermine your feedback and discourage candor in the future.
Finally, this manager expresses dissatisfaction with the performance management system in order to distance herself from the process. This undermines her feedback and prevents her from having a meaningful two-way discussion with her employee about his or her performance.

10. CEB HR Leadership Council TM For Midsized Companies
Encourage Employee Input
Respond calmly to negative reactions
Do…
Own the feedback
Schedule plenty of time
Be candid, thoughtful, professional
Restate employee comments
Follow-up if necessary
Speaker’s Notes
On this slide, we note the improvements this manager could make to ensure that she’s proactively encouraging employee input and feedback.
First, both scheduling plenty of time for employee questions and proactively preparing responses to those questions is the first step to ensuring that the conversation is a productive one. While the manager should also recognize that follow up may be necessary for those questions that can’t be answered during the initial conversation, effective preparation can head off a lot of that additional time after the review itself. For example, the manager may state, “let’s use the time we have left to discuss any questions you have. If I don’t know the answer to any of your questions, I will look into it and follow-up with you.”
Second, the manager should prepare calm, neutral responses to any anticipated negative employee reactions. Here, reflective listening is most helpful -- calmly restating employee comments back to them allows for the clarification of any misunderstandings and the rephrasing of any highly emotional responses in a professional tone. This both encourages employee candor and helps refocus the conversation in the case of an overly emotional reaction. These responses can be simple – “I can see that you are unhappy with these results. Let’s discuss strategies for improvement going forward” – but ultimately persuade the employee to mirror your calm response.
Finally, the manager should take ownership of her feedback and provide thoughtful responses to employee questions and concerns. Regardless of the content of the feedback itself, employees appreciate candid, thoughtful, and professional responses from their managers, as opposed to their managers evading personal responsibility, which ultimately results in a more productive conversation for both sides. In practice, this ownership could consist of, “ understand that you were anticipating a different rating. Let me explain the specific reasons I chose this rating for you…”

11. CEB HR Leadership Council TM For Midsized Companies
Encourage Employee Input – Summary
Do…
Own the feedback
Respond calmly to negative reactions
Schedule plenty of time
Avoid addressing difficult questions
Express dissatisfaction with performance management systems/decisions
Become defensive or apologetic
Don’t…
Speaker’s Notes
In summary, refrain from avoiding difficult questions from your employees, become defensive or apologetic during reviews, and distancing yourself from the review process.
Instead, allow for plenty of time and preparation before the conversation, respond calmly to negative reactions, and own the feedback you provide to your employees.

12. CEB HR Leadership Council TM For Midsized Companies
Presentation Review
Use Effective Language
Encourage Employee Input
Communicate Performance and Pay Differentiation
Speaker’s Notes
Next, we’ll move to addressing the steps you as a manager can take to encourage employee input during performance review meetings.

13. CEB HR Leadership Council TM For Midsized Companies
Communicate Performance and Pay Differentiation
Discuss other employees’ ratings
Common Pitfalls
Make promises
Use jargon
Example:
Here’s how that will impact your compensation…
Overall, you received a rating of 4— that’s the highest of everyone on your team!
… As a reminder:
The profit-sharing component of your variable pay is calculated using a graduated, first dollar formula.
I know the merit increase is less than you were hoping for, but
if you can improve your presentation skills like we discussed, you’ll get a bigger increase next time.”
Speaker’s Notes
In addition to rehearsing the language she’ll use to share her feedback and ways in which she’ll proactively encourage feedback, this manager also rehearses how she will communicate differentiation during the review. Above, you’ll see the most common pitfalls encountered when preparing for this aspect of a review.
First, the manager reveals other employees’ pay or performance ratings. While clarity and visibility into personal performance ratings is desirable for employees, comparing those scores to those of your other direct reports immediately alters the course of the conversation, moving the focus away from the personal development of this particular employee.
This manager also uses complicated compensation or performance management jargon, which most employees haven’t been exposed to, can make it very difficult for the employee to understand her message.
Finally, she promises that doing certain things will lead to different pay outcomes for this employee. While describing describe the types of behaviors and skills associated with different ratings helps direct employee growth, you should not implicitly or explicitly promise your employee that a particular behavior will lead to a certain rating or pay outcome in the future. These promises can lead to misaligned expectations when internal advancements are being considered for all of your employees.

14. CEB HR Leadership Council TM For Midsized Companies
Communicate Performance and Pay Differentiation
Do…
Explain the pay and performance decision processes
Ensure the employee understands the terms
Inform the employee of where his/her pay places them in their pay range
Explain what types of behaviors are necessary to achieve different ratings (e.g., meets, exceeds)
Speaker’s Notes
There are several things managers can do to help communicate performance and pay differentiation effectively.
First, inform employees of where their pay places them in their pay range. Being transparent about pay ranges can have a significant positive impact on employee pay perceptions. For example, mention that, ““This year’s increase brings your annual compensation to $45,000, which puts you at 80% of the maximum amount for your current job grade.”
Second, ensure that your direct report understands the performance-related terms used throughout the conversation — clarifying these terms allows for the employee to leave the conversation with a clear understanding of overall improvements to make and next steps to take. For example, articulate the general use of the phrase “job grade”, “By job grade, I mean the range of potential compensation amounts associated with your current role.”
Third, explain the pay and performance decision process to clearly communicate how those rating decisions are made – “First I’ll explain the process for the merit increase decisions and how they are calculated. Let me know if you have any questions or if anything isn’t clear.”
Finally, explain what types of behaviors are necessary to achieve different performance ratings, giving employees a clear sense of what skills and behaviors correspond to particular rating outcomes. In practice, this connection could look like, “You are really good at explaining information clearly to clients during meetings, but to get to an ‘exceeds’ level we’re really going to have to focus on improving your ability to manage discussion among clients at the end of the presentations.”

15. CEB HR Leadership Council TM For Midsized Companies
Communicate Performance and Pay Differentiation – Summary
Do…
Ensure the employee understands the terms you use
Inform the employee of where his/her pay places them in their pay range
Explain what types of behaviors are necessary to achieve different ratings
Reveal other employees’ pay or performance ratings
Don’t…
Promise that doing certain things will lead to different pay outcomes
Use complicated compensation or performance management jargon
Explain pay and performance decision processes
Speaker’s Notes
To summarize, when communicating performance and pay differentiation, avoid revealing other employee’s pay or performance ratings, using HR jargon, or promising that certain behaviors will lead to specific outcomes in the future.
Instead, you should inform the employee of where their pay places them in the range for their job, ensure they understand the terms you use, explain decision processes, and describe the types of behaviors typically associated with different ratings.

16. Presentation Review Delivering Performance Review Feedback:
Use effective language
Encourage employee input
Communicate differentiation
Speaker’s Notes
This brings us to the end of the presentation, let’s review what we’ve covered today:
First, we learned to use effective language to ensure your feedback is easy to understand.
Second, we learned to encourage employee input so that employees feel heard and understood.
Finally, we learned how to effectively communicate performance and pay differentiation, a highly valued and appreciated skill as part of the performance review meeting.
These delivery skills, coupled with well-prepared feedback, will allow you to maximize the impact of your performance reviews on the performance and engagement of your direct reports.
Additional Resources
Manager Guide: 10 Keys to Improve Employee Performance through Formal Performance Reviews
Manager Guide: Improve Employee Performance by Managing Reactions to Formal Feedback