Most employers recognize the importance of regularly scheduled performance reviews. The challenge is how to administer them.
There are two general approaches: numerical and narrative. If you believe your organization’s performance review process has room for improvement, don’t hesitate to take a step back and reevaluate.
Going by the numbers
Numerical performance reviews are purely analytical. For each employee, supervisors assign a score or rating to various performance descriptors such as:
- Demonstrates knowledgeability of position,
- Meets productivity expectations,
- Communicates effectively with colleagues, and
- Adheres to deadlines.
Supervisors then calculate scores by averaging ratings across multiple criteria or weighting them statistically based on importance. Some employers develop standardized rubrics to ensure consistency.
The primary advantage of numerical reviews is they’re quantifiable. They allow the organization to easily and efficiently analyze employee performance, spot trends, and identify areas of improvement during the review period. Numerical reviews may make sense for sales positions, which are largely metrics-driven anyway, and for large teams where everyone does the same job.
The main disadvantage is that, for many positions, numbers alone don’t capture the full scope of what employees do. For instance, jobs centered on creativity and innovation may not always show pronounced signs of productivity. Also, the wording of criteria and how supervisors score workers may be subject to bias. Some employees resent numerical reviews for these reasons or others.
Using your words
True to their name, narrative performance reviews tell the story in writing of how employees performed during the review period — noting accomplishments, highlighting strengths and identifying areas of improvement. The objective is to provide a comprehensive assessment tailored to each worker’s distinctive background, experience and situation.
Narrative reviews have notable advantages. First, employees receive specific descriptive feedback on their performance rather than just a score or rating, which may be vague or easily misinterpreted. These reviews typically encourage professional development because they explicitly tell employees what they’re doing right and how to improve. Narrative reviews are also widely regarded for strengthening engagement because workers feel more valued when their contributions are put into words instead of reduced to numbers.
Of course, narrative reviews have potential downsides. They’re much more time consuming and labor intensive for supervisors. Whereas numerical reviews can be largely or wholly calculated by software, narrative reviews require human input and effort.
Also, narrative reviews make it difficult to compare employees’ performances from review period to review period and may hamper an employer’s ability to spot larger trends. And there’s the ever-present issue of subjectivity: Because narrative reviews rely on the supervisor’s perspective and skill at performance evaluation, they can be biased, confusing or inaccurate.
Devising a hybrid approach
One recent survey demonstrates the difficulty many employers face in choosing the optimal approach. In July 2024, the Academy of Management published a study entitled The Power of Words: Employee Responses to Numerical vs. Narrative Performance Feedback. It contained survey results of 1,600 U.S. workers that found “narrative-only feedback was generally perceived as the fairest” and often increased employees’ motivation to improve at their jobs.
“Great!” you might say. “Let’s go with narrative.” Not so fast — the survey also found that numerical reviews or a hybrid approach were viewed as fairer “when the feedback was extremely positive or when recipients were informed about associated monetary outcomes.”
Perhaps the only thing that’s clear is you and your leadership team must consciously address the right performance review approach to arrive at a reasonable strategy customized to your organization’s size, mission and demographics. Devising a hybrid approach may be best in many cases. Alternatively, you could opt for numerical or narrative, depending on the purpose of the department or team.
Reaping the rewards
A well-crafted and deftly executed review process appeals to job candidates, strengthens employee engagement and retention, and drives productivity. Please contact us for help identifying and analyzing all your organization’s costs associated with performance management.
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