How to Optimize Your Performance Management System for DEIB: A Step-by-Step Guide

Step 1: Examine the current state of your performance management strategy

To get started, gather the quantitative and qualitative data available to you about performance management at your organization.

Quantitative data

• If you run an engagement or DEIB survey, how do employees report feeling about your performance reviews, promotions, and manager feedback? Are there differences by groups?

• Do your performance evaluations show consistently higher ratings for men than for women, people of color, or other underrepresented minority groups?

• Are there demographic disparities in promotions? For instance: Do some groups get promoted faster than other demographic groups?

• Do the same performance ratings result in different promotion or compensation rates for different groups?

Qualitative data

How do employees feel about the current PM framework? Ask them questions like:

• Do you feel that you personally have an equal chance to succeed here? Why or why not?

• Do you understand how your performance is evaluated? Do you feel this process is fair? Why or why not?

• Does your manager give you constructive feedback? Can you elaborate on how it is or isn’t constructive?

• Do managers understand what is expected of them?

• Do managers feel they have the resources they need to help their reports succeed?

Looking at your quantitative and qualitative data and what you know about your PM system, what do you see as the main problems with the current state? For example:

• There is a major disconnect between the performance management process and daily work.

• Managers are reluctant to give candid, actionable feedback to all direct reports.

• Managers view performance management as an administrative drill.

• Employees don’t see the value of reviews.

• Employees believe reviews are unfair or arbitrary.

• Employees don’t believe reviews are tied to meaningful outcomes.

• Employees don’t understand how promotions are made or believe decisions are unfair.

After this analysis, write down the three biggest pain points within your current performance management framework.

Next, when you decide what the goals of your performance management system are, consider whether those goals address the main pain points you just identified.

Step 2: Align on the goals of performance management at your organization

Before devoting countless hours to reviews and meetings, it’s important to decide what your goals are for performance management and examine what it would take to build a system that meets those goals. Sometimes HR and leadership teams' goals aren't actually best solved through performance management alone.

Below are some common performance management goals, common pitfalls, and potential solutions.

Potential goal #1: Make the right promotion and compensation decisions.

Overall, this is a great goal to have for your performance management system. Keep in mind, though, that research shows raters are notoriously inconsistent in evaluating subjective performance criteria. (In one study, 62% of the variance in performance scores was the result of who did the rating.) This can lead to promotion and compensation decisions that are unfair.

In addition, promotion often requires completely different skills than the current job. Evaluating current performance only may not properly signal whether an employee can perform at the next level.

To really achieve this goal, you'll need to:

• Establish role descriptions and criteria for performance.

• Establish clear criteria for promotion to the next level.

• Communicate evaluation criteria and promotion criteria ahead of time. This can be done through a leveling document.

• Train managers on how to fairly evaluate criteria.

• Calibrate and review decisions so managers know they need to be able to defend their decisions.

Potential goal #2: Help employees improve and do their best work

This is another excellent goal that can be completely blundered in the execution. Studies find that feedback interventions have very variable impacts, with up to 30% decreasing performance. Research also suggests women and people of color are given less concrete and actionable feedback and more biased feedback.

To really achieve this goal, you'll need to:

• Train managers with a DEIB focus on:

  • regularly providing unbiased, concrete, and actionable feedback,

  • why and how to hold regular, structured 1:1s,

  • how to engage direct reports in meaningful career development conversations.

  • how to give feedback focused on strengths.

• Review feedback for bias.

• Examine whether employees believe performance criteria are fair and meaningful.

• Ensure employees are not terrified or resentful of the review process.

Potential goal #3: Identify low-performing employees

If the first time an employee learns they are missing expectations for their job is during a performance review, it's too late. It's also important not to center on identifying problem employees when creating a performance management system designed for all employees.

To really achieve this goal, you'll need to:

• Train managers on how to set clear role expectations well ahead of reviews.

• Ensure managers have the skills to communicate performance issues during 1:1s and through regular feedback.

• Develop a philosophy and procedures for what to do when a manager identifies an underperforming employee.

Performance management goals worksheet

After a careful and thorough examination, answer these final questions to collect the goals you wish to achieve through performance management.

• What are our goals for performance management?

• Then, for each goal, answer: Does our current system meet this goal? If not, what’s missing?

What are our goals for performance management?

1. ___________________________________________________________

Does our current system meet this goal? If not, what’s missing?

2. ___________________________________________________________

Does our current system meet this goal? If not, what’s missing?

3. ___________________________________________________________

Does our current system meet this goal? If not, what’s missing?

Redesigning your performance management system will require significant change—and most people don't like change. Make sure to continuously build leadership buy-in for changes to your PM system by understanding the needs and fears of key stakeholders.

Step 3: Determine Performance Evaluation Criteria

Write competency-based role descriptions

• For each role, have managers decide on the key competencies (3-5) and focus areas (1-3) that are critical for the role and align with broader organizational goals. (Tip: One low-lift way to do this is to require managers to write a competency-based role description for any new role they hire for and any promotion they want to be approved)

Identify promotion criteria

• A clear leveling document should exist that shows employees what it takes to move up to the next level in their role.

• Managers should regularly discuss these criteria and where the employee currently stands.

• Together, managers and direct reports should identify 1-2 “next level” development focus areas and SMART goals associated with those areas to coach employees on how to get to the next level. (If promotion isn’t possible due to business needs, be transparent about that and focus on other professional growth opportunities)

• Decide whether you will evaluate employees on company values.

• Decide whether you will ask for peer feedback or self-evaluations.

Communicate criteria

• Employees should know what the key competencies are for their role. (Develop clear leveling and job descriptions if this isn’t the case).

• Managers should meet with their direct reports to come up with 2-3 goals for each focus area at least 6 months before a review. Managers should ensure that employees feel they have the resources they need to achieve those goals.

Check for potential bias

• Do all employees have access to the resources they need? How do we know?

• What kind of work assignments are employees being given? Who has access to high-status/promotable assignments

Make sure you can answer these questions:

• How/when will managers provide role descriptions?

• How/when will managers and direct reports set focus areas, goals, and “next level” developmental focus areas?

• How/when will managers be trained on these processes and managing equitably?

• How often will performance reviews take place?

• How will managers reinforce expectations, provide developmental feedback and motivate employees throughout the year?

• How will promotions be decided? What role will the reviews play in the decision? What are the standards/criteria for people managers?

• How will bonuses and raises be decided? What role will the reviews play in the decision?

• What other feedback and development opportunities will complement the review process?

Step 4: Develop the Right Tools

The language and components of your performance management tools will play a major role in how effectively managers are able to manage bias and fairly evaluate performance.

Performance Review Form

The performance review form below specifically includes:

• A strengths-based component

• An area for managers to give concrete, actionable suggestions for improvements for each focus area

• “Next level” focus area that provides employees’ signal about their readiness for a promotion

• A check-in on career development/mobility

Download our Performance Review Form here.

Promotion Recommendation Form

It’s important that promotion forms require managers to first see how they scored each of their direct reports on the same form as they make the decision of who to promote. Research has shown that this practice greatly reduces bias.

Download our Sample Promotion Recommendation Form here.

Step 5: Establish a Review Process

New managers need experience and training on evaluating employees. And research suggests that just knowing that decisions will be reviewed helps managers act with less bias.

• At each performance review cycle, have the committee read a sample of reviews without names and rate each person. Compare those ratings to actual ratings.

• Review ratings for outliers (e.g. managers that have consistently “harsher” ratings). Offer coaching to managers that fall outside calibration norms.

• Review ratings for disparities by demographic groups.

Step 6: Train to embed change.

Have a specific plan to train managers with a DEIB focus on:

• The goals and process for your performance management system (setting role descriptions, focus areas, and promotion criteria)

• Providing effective feedback and having difficult conversations

• Identifying and reducing bias in assigning work, developing employees and evaluating employees

• Setting goals and making the most of 1:1 meetings (for direct reports)

Reinforce these new processes and behaviors through a clear DEI strategy that can include:

• Coaching

• Asking employees for feedback

• Engagement and inclusion surveys

• Pulse surveys

Step 7: Demonstrate impact

Repeat quantitative and qualitative evaluations of your performance management system at least annually so that you can demonstrate the impact of your new-and-improved performance management system on employee satisfaction, performance, and business outcomes. KPIs can include:

• Promotion rates by demographic groups and levels

• Average tenure by demographic group and levels

• Employee satisfaction and engagement

Phew! This guide should give you a starting roadmap to help you establish or improve your performance management process but if you need extra support designing and implementing a DEIB-focused performance management system, we can help.

Peoplism is all about helping organizations become more diverse, equitable, and inclusive companies where all employees can belong — performance management redesign is one of our core services, where we provide you with our DEIB expertise and resources to create a fair and objective PM system.