01/30/2015 01:32 pm ET Updated Apr 01, 2015

Transform Your Performance Reviews from Painful to Successful

Annual performance reviews make team members and managers alike recoil with dread -- and for good reason. The traditional approach to performance reviews, in which a manager gives an employee's performance numerical ratings once a year, is at best ineffective, and at worst damaging to morale and productivity.

The Washington Post's Jena McGregor reported that performance reviews fail to accurately represent an employee's performance. In fact, two-thirds of employees who receive the highest scores are not actually the highest performers in the organization. What's more, performance reviews only increased employee performance by three to five percent.

The performance review has become more about the process and the obligation of completing one than actually providing value to employees, which makes the whole endeavor a bit ridiculous. After all, isn't the point to help your employees grow and deliver at higher levels so both they and the organization move forward?

To place the focus back on employee and organizational growth, shift the review process to focus on a collaborative conversation between the manager and team member. You want your team member and manager to co-create a clear plan that will help the team member grow.

The process we use in my organization to co-create performance reviews is pretty simple, but incredibly effective. Here's how it works:

  1. Notify the team member about the meeting a couple weeks out minimum. You want to give them plenty of time to think about the questions so they can give real, genuine answers.
  2. You and your team member should complete the same document or set of questions. Make sure the criteria you use is as objective as possible, and include space to draft 30, 60 and 90 day performance goals.
  3. Have the team member go first. You want them to have the opportunity to present their strengths, where they want to improve, and where they believe their growth opportunities are before you comment.
  4. Together, decide on the 30, 60 and 90 day performance goals that help both the team member and business grow.
  5. Set the next appointment during the meeting. We've found that a 90 day cadence works best.

By holding a performance review every 90 days, you are ensuring your team members, who give you their time, strengths, energy and knowledge every day, receive enough of your time to become as successful as they possibly can. It's an opportunity to strengthen your relationship with your team members, deliver feedback and guidance on a regular basis, and clarify performance goals and expectations so everyone knows exactly what they need to do to succeed.

Like this? Tweet it: Co-creating performance reviews with your team increases the efficiency and outcome of the review @TheCharfens via @HuffPostBiz

Alex and Cadey Charfen are the Co-Founders of the Charfen Institute.