Here are a few ways to identify if your employee performance evaluation system has issues, along with possible solutions to solve the problem.
1. Everyone gets a trophy
Let's be real. Some employees just don't cut it. If your performance evaluation system is giving every employee a "pass" rating, then you've got a red flag.
Solution: Examine how your system assesses performance. Identify the loopholes that low performing employees are falling through to getting passing grades, and work to correct them. By closing the loopholes you'll have a more accurate picture of where employees stand.
2. There's a disconnect between employee assessments and system assessments
If your evaluation system surprises employees with where they stand - either positively or negatively - then you've got a problem. People usually know where they stand based on their internal compass. If your system gives them a fail when employees feel that they're passing, perhaps there's a problem with timely managerial feedback to correct behaviors. Or, if an employee feels that they've failed when they've passed, then it's possible the system is giving employees trophies when they haven't "won."
Solution: Incorporate employee assessments of themselves into your performance evaluation system. Comparing these results and diving deeper into why employees rated themselves the way they have brings important issues to the surface.
3. High achievers aren't rewarded
It's important to keep high achievers engaged so they continue to produce above-average results. Your high achievers can quickly become disengaged after a performance evaluation when they're surprised at the results (i.e. - they're the #1 producer but only received an 8 out of 10 rating) or are not rewarded for being a high achiever.
Solution: Recognize and reward high achieving employees. If your evaluation system is only giving an employee 8 out of 10 when they really should be an "11," don't be afraid to make changes to the system to give them the grade (and raise) they deserve.
4. You're too busy to effectively complete an employee performance evaluation
A manager's inability to coach employees is one of the top reasons people become disengaged with their work. If a manager fails to provide feedback to employees about their progress, then employees won't progress. It's as simple as that.
Solution: Make the time to coach and guide employees to achieve their personal and company goals. Every manager who is responsible for overseeing employees should be active and available in the evaluation process. Don't reschedule an evaluation meeting. Take them as seriously as you would an evaluation of your own with the CEO of your company.
5. Top Down Performance Evaluations
Top leaders should be held accountable with their own performance evaluation and live up to the standards that they expect of employees. There's nothing that will disengage an employee more than receiving feedback that their manager doesn't practice.
Solution: Conduct performance evaluations from the top down, starting with the CEO and working down the organizational ladder. By starting from the top down, managers can then speak candidly with employees about how their own employee performance evaluation went and talk about how they plan to improve as a manager.
The overall theme in all of these solutions is to move away from numerical ratings and towards two-way communication and feedback. Your organization has room to grow in its evaluation methods, and you can use these suggestions as starting points to motivate and inspire employees.