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The Role of Company Culture in Performance Reviews

The Role of Company Culture in Performance Reviews

Most leaders know that building a high-performance culture drives organizational success. However, many may not understand how to use their company’s culture to help employees continuously improve and grow. Making it a cornerstone of performance reviews is one of the most strategic ways to develop employees. Highlighting culture in these important discussions is also a very effective way to reinforce this crucial element of the organization.

The Essence of Culture

Many companies point to their core values as the definers of their culture. These principles may be inspirational, but numerous experts explain that an organization’s actual culture is evident in its staff’s routine behaviors. While employees may philosophically align with their company’s values, their conduct tells the real story.

In addition, values are subject to interpretation—they don’t mean the same thing to everyone. Everyone must be on the same page for an organization to effectively implement a high-performing culture.

So, the best way for leaders to shape culture is by identifying and systematically reinforcing specific behaviors. Behaviors are universally understood actions, whereas values are abstract concepts that are difficult to apply to daily work. As CultureWise CEO David J. Friedman writes in Culture by Design:

“If we see culture as a set of behaviors, we open up a whole world of actions we can take. We equip ourselves with a number of tools and techniques that can effect change.”

Leaders who grasp the conduct vs. values construct know that their culture isn’t static; it will always be a work in progress. To succeed, they must devise ways to help employees hone behaviors that lead to better performance. As Friedman puts it:

“This is a visioning exercise. We’re trying to envision our best selves, and then we’re going to do the work to bring that vision into reality.”

A Tangible Blueprint for Conducting Reviews

Michael Fraccaro, MasterCard’s chief human resources officer, set out to revamp the $350 billion business’s culture last year. Fortune contributor Amber Burton notes that one of his key tactics to achieve this goal was to tie job performance to how well his employees reflected the organization’s culture. More specifically, he uses reviews to assess his staff’s improvement in performing the behaviors that form their culture.

Having a codified set of behavioral standards helps frame managers’ conversations with direct reports in review sessions. Both parties go into the meetings with a clear understanding of what these behaviors are and how they affect job performance. This mutual understanding helps keep the conversations unbiased and more productive.

Every company’s culture is a composite of multiple behaviors that impact different aspects of its operations. David Friedman suggests three primary areas leaders should consider when determining the behaviors that they want their staff to display.

When forming the culture they want for their companies, leaders should consider behaviors like those listed above and others that will lead to success for their organization and staff members. In performance reviews, managers can use these behaviors as topics to frame specific projects or goals. They can also be the genesis of open-ended questions asking direct reports for self-assessment.

The standard review process is typically based on performance measurement, which employees may consider unfair and demoralizing. However, a culture-based assessment focuses on performance development. It reinforces employees’ positive behaviors and helps them identify areas to improve. It also gives managers an objective framework to establish accountability benchmarks.

Instead of being criticized or rewarded for how well they met goals over the past year, employees are evaluated and acknowledged in terms of their potential and desire to grow and improve. These sessions can become the backbone for employee development, leadership training, and career trajectories.

The Value of Frequent, Constructive, and Actionable Feedback

An important point for leaders to consider is the frequency of performance reviews. Traditionally, these assessments have been performed annually, requiring participants to cram a year’s work activity into one meeting. However, managers can help employees develop faster and more effectively by scheduling recurring informal and formal sessions.

Informal Sessions

Regular check-ins or one-on-ones allow managers and direct reports to develop stronger connections and rapport, which builds trust. These briefer, more casual meetings allow people to review real-time progress and course-correct while working on projects—not weeks or months after completion. They also provide participants with a designated safe place to bring concerns to the table before situations have time to escalate.

Formal Sessions

More formal reviews should be scheduled quarterly instead of annually. Because they are more frequent, they don’t have to cover as much ground as yearly assessments. Managers can help people understand and work on specific behaviors and help their team members gauge progress over a three-month period. This cadence helps employees stay focused on goals and managers to bring out the best in their people.

Frequent informal and formal review sessions may seem time-consuming. However, employees crave feedback so they can improve performance all year rather than waiting for an annual review.

In a Harvard Business School blog, Michael Blanding cites Professor Francesca Gino’s research that shows that while a majority of employees want better information about how they could improve their performance, most report that they don’t get it. Gino says this is a missed opportunity:

“After all, there are few greater gifts a person can give someone than showing them that you are paying attention to what they are doing and helping them do it more successfully.”

Investing in an ongoing process to hone key behaviors will build employee engagement and strengthen their capabilities. In addition, every review session will act as a culture multiplier. Employees are much more likely to buy into, adhere to, and help promote their organization’s culture when they see its significance in important processes like performance reviews.