1. Get clear on your leadership evaluation objectives
If you don’t want to end up in a position where your C-suite and department heads are constantly debating which leadership skills matter most, get specific at the outset. That way, all stakeholders will clearly understand the capabilities that’ll best enable your organization to achieve its short and long-term objectives.
To start, all leaders should be comfortable sharing their perspectives in an open, honest conversation. “To gain support for your change ideas, it’s essential to be candid about your intentions and the challenges you anticipate,” write leadership experts Brenda Steinberg and Michael D. Watkins in an article for the Harvard Business Review. “The idea isn’t just to inform them and eliminate any preconceived notions they might have; it’s also to involve them in specific areas of transformation.”
Here are some steps you might consider taking in the first part of the process:
- Brainstorm a list of qualities that are essential for leadership success and make sure they also communicate your company’s values.
- Decide which skills are most important for your leaders and which benchmarks they should be meeting. You can later use these benchmarks to develop the questions that will make up your performance review.
- Build your objectives around the two dimensions of leadership success we mentioned before — business performance and relationships. A successful leader should proactively steer the business in the right direction. They should also be able to navigate stressful situations, balance long-term strategy with quick thinking when needed, and bring out the best in others.
Remember, you can always amend and tweak your evaluation process later if you decide that it’s time to approach leadership in a different way. However, it’s important to create a detailed objective-setting process first so it’s easier to make future changes.
2. Define your questions
The qualities defined in step one will be the basis of your performance review form.
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. However, qualitative data is also a must for leadership performance reviews, which 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. Get specific about the stakeholders involved in the review
To get the most valuable information from a performance evaluation, you should ideally use a 360° review process to enable you to collect feedback from more than one person, like board members, other managers, and direct reports.
When feedback comes from more than one person, you’re more likely to prevent dyadic conflict, which is when two team members disagree and take sides on a particular issue.
“Believe it or not, the most common pattern of conflict in teams is when two people within a team disagree, comprising approximately 35% of team conflict,” write management professors Randall S. Peterson, Priti Pradhan Shah, Amanda J. Ferguson, and Stephen L. Jones for HBR.
“You may assume that this pattern will escalate to include others over time, but the evidence suggests otherwise. Most people tend to avoid taking sides when there is a dyadic conflict embedded within a group, making it most likely that the duo will continue to box until one is knocked out, or a referee steps in to mediate.”
Best of all, by using a 360° process, you’ll be able to get a more in-depth picture of leadership performance across your company and learn how team members across the organization feel about leadership’s current impact.
4. Determine how often reviews should take place
HR leaders are becoming even more hyper-focused on continuous performance management than in the past, and for good reason. According to Gallup research, only 2% of CHROs think that their performance management system works, and only 47% of employees strongly agree that they know what’s expected of them at work — a number that’s slowly trending downward since the pandemic.
That’s why, 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. Why? Research has shown that employees appreciate frequent feedback. In addition, 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’ll inevitably be forgotten by the following year. Instead, employees and leaders can receive time-sensitive feedback and quickly act on it.
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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 evaluation, 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 Reviews can help you organize your entire leadership evaluation 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 CHROs citing people analytics as the top area where they need to increase their knowledge.
When looking for a performance management HR platform, make sure you find one that uses analytics to comb through your performance data and offers AI-powered insights to help you understand leadership potential.
7. Act on the results
At the individual level, leadership evaluations can be used to guide leaders’ learning and development.
Once you’ve conducted an evaluation, 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 evaluation can be used to determine whether they’re ready for a promotion or raise.
Follow-up best practices for leadership evaluations
Integrate the performance review process with your other HR initiatives
Ideally, HR functions shouldn’t live in silos. The leadership evaluation process can be integrated into your other HR initiatives, like succession planning and training programs.
Although leadership evaluations can be linked to financial incentives or promotions, 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.
🌟 When in doubt, try the expectations exercise recommended by communication experts Jeremie Kubicek and Steve Cockram:
• Write down your current professional expectations. What do you want to experience in your current role or with your boss
• Recall a past instance when misaligned expectations led to challenges. How did that feel? What were the ramifications of that?
• Analyze — What could have been communicated better? What could you have done better?
• Project — Where would you like to see your current expectations in the next quarter, year, and five years?
• Align — Discuss these expectations with your team, ensuring alignment and clarity.
Turn managers into leaders with Leapsome
If we expect organizations to be adaptable in the face of change, then we should support our managers and leaders in building the skills and strategies they need to move businesses forward. To make leadership growth a long-term priority, companies need the right people, tools, and technology on their side. That’s the secret to staying agile, creative, and resilient as a business, come what may.
Another key to success? The fact that Leapsome gives users the tools they need to develop leaders, with templates for 360-degree reviews, project reviews, and anonymous leadership evaluations. Our Reviews module also allows you to identify the leadership skills all team members need to build. Check out the video below to learn more about how you can develop and retain top talent with Leapsome.
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