1. Set your objectives
The first place to start is by setting your objectives. This means deciding which skills are most important for leaders, and which benchmarks they should be meeting. You can later use these benchmarks to develop the questions which will make up your performance review.
Try to build your objectives around the two dimensions of leadership success we mentioned before: business performance and relationships. A successful leader should be steering the business in the right direction. They should be able to tolerate stress and balance long-term strategy with quick thinking when needed. They should also be able to bring out the best in other people.
Brainstorm a list of qualities that are essential for leadership success, and make sure that they also communicate your company’s values.
2. Define the questions you will use
The qualities defined in step 1 will be the basis of your performance review.
We recommend using a five-point scoring scale for reviews. Instead of simply evaluating skill levels as “good” or “bad,” these can give a more nuanced indicator of company expectations. Here’s an example of what this type of scale might look like:
1 = Needs Strong Improvement
2 = Needs Improvement
3 = Meets Expectations
4 = Exceeds Expectations
5 = Superb
Quantitative data (like the above) can be very useful for understanding performance trends over time and across different departments. But qualitative data is also a must for leadership performance reviews. Qualitative data comes from open-ended questions and provides a deeper insight into performance.
We recommend using “what” questions to gather qualitative data during your performance reviews. For example: What should [employee] keep doing? What should they change?
3. Decide who will be involved in the review
To get the most valuable information from a review, you should ideally use a 360° review process. This means feedback will be coming from more than one person — it may come from board members, other managers, direct reports, and via self-assessment.
By using a 360° process, you’ll be able to get a more in-depth picture of leadership performance.
4. Determine how often reviews should take place
Today, companies have shifted towards offering feedback more than once a year. We recommend at least bi-annual formal reviews, while informal feedback can (and should) be offered even more frequently.
Continuous performance management is becoming more popular, and for good reason. According to Deloitte, 90% of companies that have redesigned performance management have seen direct improvements in engagement, 96% say processes became simpler, and 83% say that the quality of conversations between employees and managers went up.
Research has shown that employees appreciate frequent feedback. And although leadership roles offer a lot more autonomy, executives often want feedback as well.
Frequent performance reviews help reviewers avoid “digging up the past” or setting long-term goals that will inevitably be forgotten by the following year. Instead, employees and leaders can receive time-sensitive feedback and quickly act on it.
5. Gather relevant data
Once you’ve put together a plan for your review process, it’s time to kickstart these reviews. During each leadership performance review, you’ll need to gather feedback from employees, managers, peers, and via self-assessment.
You’ll want to make sure this information is kept in one place, clearly recorded, and that reviews are conducted regularly. Keeping performance reviews on record is very important for legal accountability and company culture.
A platform like Leapsome can help you organize your entire performance reviews process — from setting up the questions and respondents to analyzing performance changes in different areas over time. With visibility over the whole process in one digital tool, you’ll be able to keep tabs on what’s happening, increase peer participation, and quickly pinpoint any problems and areas for development.
6. Analyze the data
Performance reviews can help you understand an individual’s performance — but what about performance trends across your company?
That’s where people analytics comes in. People analytics is about using data to gain insights into your HR function. Companies are becoming increasingly interested in people analytics, with 71% seeing it as a high priority, according to Deloitte.
When looking for a performance management HR platform, make sure you find one that offers analytics insights to help you understand leadership potential (among other metrics), based on the feedback gathered during performance reviews.
7. Act on the results
At the individual level, leadership performance reviews can be used to guide leaders’ learning and development.
Once you’ve conducted a review, schedule a development talk between the person being reviewed and their manager to offer immediate feedback on leadership skills. This should be presented as a constructive talk, with both parties given the opportunity to offer their opinions.
Then, create development goals to build on strengths and solve any problems identified during the review. Like individual contributors, leaders can benefit from learning programs and development modules, especially if they’re new to managing people. With higher-level executives, feedback should be more generalized and designed to point them in the right direction; the executive will ultimately be responsible for changing course.
Additionally, if someone is performing well the results of their review can be used as an indicator of a performance bonus they deserve.
Follow-up best practices for leadership performance reviews
Integrate the performance review process with your other HR initiatives
Ideally, HR functions shouldn’t live in silos. The performance review process can be integrated into your other HR initiatives, like succession planning and training programs.
Although performance reviews can be linked to financial incentives or promotion, we recommend keeping salary talks separate from a performance review discussion. This will allow the performance review to stay focused on progress and development.
Ensure everyone understands what’s expected of them
It’s always good to set clear standards for leadership success. You should also let leaders and employees give feedback on the review process, as they may have insights into what is and isn’t working well.
🚀 Interested in implementing reviews to boost employee performance and engagement? Access our leadership performance review template with best-practice questions for leadership appraisals and other types of review. 😉
Turn managers into leaders with Leapsome
Leapsome is the only platform that closes the loop between performance management, employee engagement, and learning.
Effective leadership performance reviews include feedback from reports. Watch this video to learn how employees can easily share their opinions using the reviews module in Leapsome.