Values-Based Performance Reviews Explained

Key Takeaways

Values Over Metrics: Performance reviews now emphasize alignment with company core values alongside results, fostering a culture of purpose, accountability, and engagement.

Accountability Boost: By focusing on values, companies encourage accountability, motivating employees to take responsibility for their contributions and behavior.

Engagement Through Values: Aligning performance with core values strengthens employee engagement, as individuals feel more connected to the company's mission.

Performance reviews aren’t just about numbers—they’re increasingly about how well employees embody a company’s core values. Values-based reviews assess both the results an employee delivers and the behaviors that reflect the organization’s culture. This approach drives purpose, accountability, and stronger engagement. 

However, managers and HR sometimes struggle with subjectivity, unclear examples, and measuring values-driven actions, particularly if their performance management tools don’t facilitate them collecting and analyzing the type of behavioral data and feedback needed to fuel these reviews.

In this article, we’ll provide actionable insights and examples to help you implement values-based appraisals that boost employee development and enrich company culture.

Why Do Values-Based Reviews?

Aligning employee performance with company values is a strategic approach that can significantly strengthen organizational culture. By embedding core values into performance evaluations, companies can ensure that employees not only meet their professional objectives but also contribute to the broader vision and mission of the business.

Research from Gallup shows that employees who believe their organization reflects their values are 3.7 times more likely to be engaged at work. This higher engagement leads to increased productivity, job satisfaction, and ultimately, lower turnover rates. So it’s a bit disappointing that the data shows only 21% of employees in the U.S. feel connected to the company culture.

Impact on employee retention and engagement

Values-based performance reviews are an opportunity to help employees see that the company genuinely values behaviors like integrity, teamwork, and innovation. Seeing this leads to them being more likely to feel motivated and engaged in their work. 

This aligns directly with data from Dexian’s Work Futures study that shows values-driven companies experience stronger retention rates and higher morale. Employees want to work for organizations that share their values and provide a platform where they can contribute meaningfully.

Practical benefits of values-based reviews

Values-based reviews offer consistency in decision-making and help clarify expectations for behavior across all levels of an organization. When values are clearly tied to performance metrics, employees understand not only what’s expected of them in terms of results but also how they should behave in their roles. This clarity promotes transparency, accountability, and fairness.

If you’re only evaluating employees by their output, you’re missing the bigger picture. Values-based reviews align individual behavior with the company’s culture, which leads to stronger teams and more effective leadership. Start doing this, and you’ll attract people who fit, retain talent, and build a foundation for long-term success.

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Mike WhiteOpens new window

Founder of Secchi.io

Determining Your Company’s Core Values

The first step in integrating values into performance reviews is clearly defining your company’s core values. This may involve:

• Leadership Workshops: Conduct sessions where leadership teams collaborate to identify key values that align with business goals.
• Employee Surveys: Gather input from employees at all levels to understand the values that resonate most within the company.
• External Stakeholder Input: Consider how your customers, partners, and investors perceive your brand to ensure alignment with external expectations.

Define Behaviors along with values

“Define how each value is activated to establish norms that reflect how employees should embrace, enact or embody them internally and externally. By clearly articulating observable behaviors, team members know what is expected of them, and managers are better equipped to assess how the company’s principles are being lived as part of performance reviews.” – Marie Unger, CEO of Emergenetics International

Examples of core values

Here are some examples of common core values and how they can be reflected in workplace behavior:

• Integrity: Forthright about mistakes, maintains confidentiality, and adheres to ethical standards in their work.
• Innovation: Push boundaries, experiment with new ideas, and actively contribute to improving processes and products.
• Collaboration: Actively listen to colleagues, share knowledge, and are open to feedback, ensuring team success.
• Accountability: Owns tasks, follows through on commitments, and learns from mistakes.
• Customer Focus: Go the extra mile to understand customer pain points, respond promptly to inquiries, and deliver exceptional service.
• Respect: Foster an inclusive environment by listening attentively, valuing diverse opinions, and resolving conflicts diplomatically.
• Sustainability: Suggest eco-friendly initiatives, reduce waste, and consider the broader impact of their work.
• Excellence: Consistently deliver quality results, take pride in their work, and seek opportunities for growth and mastery.
• Empathy: Create supportive work environments, offer assistance to colleagues, and show compassion during challenging situations.
• Agility: Thrive in dynamic settings, quickly adjust priorities, and are not afraid to pivot when necessary to meet new challenges.

Tying values to organizational goals

Your company’s values should align with its broader business objectives. For instance, if innovation is a core value, it should be reflected in goals like improving products, increasing operational efficiency, or fostering creativity within teams. 

Clear alignment between values and goals ensures that values are actionable and meaningful to employees.

Example: Companies like Google have successfully integrated their core values into performance management systems, creating an environment where innovation is not just encouraged but actively measured as part of employee performance.

Creating the Connection

“I recommend evaluating the weight placed on values-related behaviors compared with other individual and team performance indicators. In companies where there is a disconnect between an organization’s stated ideology and employees’ day-to-day experience, I often find that it’s because short-term results take precedence over all other competencies. When leaders place a similar value on what is accomplished and the spirit in which it’s accomplished, they build a culture that truly reflects their principles.” – Marie Unger, CEO of Emergenetics International

How to Use Values in Performance Reviews

Values being incorporated into performance reviews sounds nice, but you’re trying to take an ideal and rate behaviors that align with it. This isn’t as simple as putting two and two together.

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Incorporating values into metrics

To truly integrate core values into performance reviews, it’s important to tie each value to specific, measurable behaviors that employees can be assessed on. This ensures that values go beyond abstract concepts and become actionable and observable traits that can be tracked over time. 

Here are some examples of how to create metrics around measurable behaviors for each core value we looked at above. Many of these are observed behaviors and require 360 degree feedback from both managers and peers in order to provide measurement.

Collaboration:

• Metric 1: Track participation in cross-departmental projects, noting how often employees volunteer for or contribute to initiatives outside of their direct responsibilities.
• Metric 2: Assess how often an employee shares constructive feedback during team meetings or brainstorming sessions.
• Metric 3: Require managers and peers to document the person’s ability to mediate conflicts within teams or contribute to collaborative problem-solving. 

Integrity:

• Metric 1: Look at instances where the employee has to handle confidential information and score how well they follow company protocols for maintaining confidentiality (e.g., data protection, private conversations).
• Metric 2: Measure transparency in communication by observing whether employees keep relevant stakeholders informed about project progress, challenges, and delays.
• Metric 3: Assess whether employees adhere to ethical standards when faced with challenges or conflicting interests..

Innovation:

• Metric 1: Track the number of new ideas proposed by employees during brainstorming sessions, meetings, or product development activities.
• Metric 2: Evaluate how often employees implement or test new processes, tools, or technologies that improve team performance or customer outcomes.
• Metric 3: Measure an employee's ability to adapt to changes, such as how quickly they integrate new software, processes, or feedback into their daily work.

Accountability:

• Metric 1: Measure how often an employee takes ownership of tasks and projects, especially when things don’t go as planned. This can be tracked through regular progress reviews, task tracking, or project outcomes.
• Metric 2: Track whether employees meet deadlines and follow through on commitments, such as hitting deliverables and keeping the team updated.
• Metric 3: Evaluate how employees address mistakes—look for instances where they take responsibility and proactively seek solutions, or do they avoid owning up to errors?

Customer Focus:

• Metric 1: Track customer satisfaction scores, such as Net Promoter Scores (NPS) or feedback surveys, and align these with individual employees who interact directly with customers.
• Metric 2: Measure response time to customer inquiries and the quality of service provided, ensuring employees are responsive and empathetic.
• Metric 3: Assess how well employees anticipate customer needs and act on them, whether by suggesting improvements to existing processes or offering personalized solutions to client problems.

Respect:

• Metric 1: Track an employee's participation in inclusive practices, such as encouraging diverse viewpoints in meetings or facilitating discussions where all voices are heard.
• Metric 2: Measure how well employees resolve conflicts or engage in difficult conversations, collecting peer feedback on how well they approach sensitive topics with professionalism and empathy.
• Metric 3: Assess the quality of their interpersonal relationships within teams—are they consistently supportive, kind, and considerate toward others?

Sustainability:

• Metric 1: Measure the use of sustainable practices in an employee’s daily tasks, such as reducing waste, using energy-efficient tools, or recycling materials.
• Metric 2: Track their participation in green initiatives like suggesting or implementing eco-friendly alternatives in projects, operations, or supply chains.
• Metric 3: Evaluate their advocacy for sustainability in team discussions, such as whether they bring up environmental considerations when making business decisions.

Excellence:

• Metric 1: Track the quality of work produced by an employee, including accuracy, attention to detail, and adherence to established standards.
• Metric 2: Measure their commitment to continuous improvement, such as whether they actively seek feedback, take on additional training, or attend industry seminars to refine their skills.
• Metric 3: Assess the impact of their work, considering how often their output contributes directly to achieving the company’s strategic goals.

Empathy:

• Metric 1: Track feedback from peers and clients regarding the employee's ability to understand and respond to their needs in a considerate way.
• Metric 2: Measure how often an employee supports colleagues during personal or professional challenges, either through mentorship, offering assistance, or simply being a listening ear.
• Metric 3: Evaluate how well they navigate emotionally charged situations, considering their ability to de-escalate tension and maintain positive working relationships.

Agility:

• Metric 1: Assess how quickly employees adjust to changes in project scope, deadlines, or team dynamics. This can be measured through their responsiveness to shifting priorities or last-minute requests.
• Metric 2: Track their willingness to experiment with new ideas, tools, or methods to solve problems and improve team performance.
• Metric 3: Measure their ability to manage multiple tasks or conflicting priorities, balancing their workload effectively in times of uncertainty.

Training managers to evaluate values-based performance

One of the biggest challenges in implementing values-based performance reviews is training managers to evaluate intangible qualities. Managers need guidance on recognizing and assessing behaviors that reflect company values and documenting them in ways that make them more quantifiable. 

Regular performance appraisal training sessions, workshops, and clear rating systems can help managers assess these behaviors objectively.

Author's Tip

Provide managers with concrete examples of how integrity looks in the workplace, such as admitting mistakes or communicating openly with clients. The best way to do it, however, is to embody the values. If leadership doesn’t hold true to the values the organization promotes, asking anyone else to is a waste of time.

Balancing values and traditional metrics

It’s important to combine values-based assessments with traditional performance metrics. For example, an employee might exceed their sales quota (traditional metric) but fail to collaborate effectively with the team (values metric) or mentor a struggling team member (values metric). 

By balancing both, you create a more holistic review process that reflects both results and behaviors.

Examples of Values-Based Performance Reviews

There are some great examples of values performance reviews in the market from leading companies that you can draw inspiration from. Here are three I’ve seen that are worth taking a look at. 

1. Patagonia: Commitment to Sustainability and Values Alignment

Patagonia incorporates its core values—particularly sustainability—into every aspect of the company, including performance evaluations. They ensure that employees not only meet their job-specific objectives but also contribute to the company’s environmental and social goals. 

This values-based approach is deeply embedded in their culture, starting from recruitment and continuing throughout performance management.

Key aspects of success:

• Clear Values Integration: Patagonia explicitly ties individual performance to its values of environmentalism and social responsibility. Employees are assessed not only on their ability to meet business targets but also on how they contribute to the company’s broader environmental and social impact.
• Sustainability Metrics: Patagonia uses specific, measurable goals related to sustainability—such as reducing waste, minimizing carbon footprints, and improving ethical sourcing practices. These become part of the performance review process for employees at all levels.
• Employee Empowerment: The company encourages employees to take initiative in sustainability efforts, and those who do are recognized and rewarded. This empowers employees to align their daily tasks with the company's broader mission.
• Cultural Consistency: By ensuring that values are a part of both formal and informal processes (including feedback, recognition, and goal-setting), Patagonia builds a culture where values aren’t just stated but are actively lived out by employees.

2. Google: Innovation as a Core Value

At Google, it’s well known that innovation is at the heart of everything the company does, and it’s deeply woven into performance reviews. Employees are not just evaluated on their technical skills or the success of the products they develop but also on their ability to think creatively and push boundaries. 

Google’s performance review process is structured around encouraging risk-taking and idea generation, which are fundamental to its innovation-driven culture.

Key aspects of success:

• Emphasis on Creativity: Google’s reviews focus on how employees bring new ideas to the table, take calculated risks, and approach challenges with creative solutions. Employees are encouraged to think outside the box and are assessed on how well they apply innovative thinking to both product development and problem-solving.
• Quantifiable Innovation Metrics: The company uses clear metrics to assess innovation, such as the number of new product ideas submitted, the implementation of new processes, or the creation of cutting-edge solutions. This keeps employees focused on outcomes that directly tie to the company's mission.
• 360-Degree Feedback: Google often utilizes 360-degree feedback, where peers and managers provide input on an employee’s creativity and collaboration in innovation-driven tasks. This holistic approach helps measure how well employees contribute to the company's innovative culture.
• Continuous Learning and Development: Google places a high value on personal growth and encourages employees to continually develop their skills. This includes learning new technologies or creative approaches, which is reflected in performance reviews to ensure ongoing innovation.

3. Zappos: Customer Service as the Foundation

At Zappos, customer service excellence is the foundation of their entire business model. Their performance reviews focus heavily on whether employees uphold Zappos’ customer service standards, with a particular focus on how employees make customers feel and how they exceed customer expectations. 

The goal is to ensure that customer service values are integrated into every employee's review, whether they’re in direct customer-facing roles or support functions.

Key aspects of success:

• Customer-Centric Culture: From hiring to performance reviews, Zappos places customer service at the center of its business. Employees are evaluated on how well they embody the company’s customer-first philosophy, with feedback emphasizing empathy, problem-solving, and creating memorable experiences for customers.
• Behavioral Metrics: Zappos uses behavioral indicators, like how well employees anticipate customer needs or resolve issues, rather than just customer satisfaction scores. This allows for a broader assessment of an employee’s commitment to going above and beyond for the customer.
• Empathy and Engagement: Employees are assessed on their ability to empathize with customers, create strong relationships, and resolve challenges creatively. This reflects Zappos’ belief that great customer service starts with understanding and care.
• Incorporating Customer Feedback: Zappos integrates real customer feedback directly into performance evaluations. This gives employees actionable insights into how their behavior aligns with the company’s customer service values and helps them improve.
• Incentives and Recognition: Zappos rewards employees who consistently demonstrate exceptional customer service through recognition programs and incentives. This keeps employees motivated to live out the company's core values in every interaction with customers.

Key Takeaways on Success:

• Clarity and Consistency: These companies ensure that core values are consistently integrated into every aspect of their performance reviews, from goal-setting to feedback and development. Employees understand how their behavior aligns with company values and are motivated to embody those values in their work.
• Measurable Behaviors: Success comes from making values actionable. By tying core values to specific, measurable behaviors, these companies ensure that values aren't just abstract ideals but are reflected in employees' daily actions and contributions.
• Holistic Approach: The integration of values into performance reviews often goes beyond just manager feedback. These companies use peer reviews, customer feedback, and self-assessments to create a comprehensive picture of how well employees align with core values.
• Alignment with Business Strategy: These companies ensure their values are directly tied to their business objectives, creating a clear link between employee performance and the company’s long-term success.

Examples of Values Performance Review Feedback

At this point, you’re surely wondering what this looks like in practice. A good place to start is to look at the feedback involved in a values performance review. 

Below I’ve outlined some examples of what that feedback looks like through scenarios involving the previously discussed values once again. For each, I’ve given an example of what positive feedback looks like when focused on values and what constructive values based feedback looks like. 

Sample scenarios by value

Integrity

• Positive Feedback:
  "You consistently handled confidential client information with the utmost discretion and transparency. During the recent project, you proactively flagged potential issues with our timeline, keeping the entire team informed and ensuring we stayed on track. Your commitment to ethical standards is evident and greatly appreciated."
• Constructive Feedback:
  "While you’ve been transparent about challenges in your projects, there have been a few instances where team members felt that you were hesitant to share information on certain delays. Moving forward, we encourage you to speak up earlier about setbacks, as transparency from the start helps the whole team adjust expectations and plan accordingly."

Collaboration

• Positive Feedback:
  "You consistently go above and beyond to foster collaboration within the team. For instance, during the quarterly planning meeting, you encouraged input from every team member, ensuring that everyone’s ideas were heard. You also played a pivotal role in mediating a conflict between departments, which led to a more harmonious working relationship and a smoother workflow."
• Constructive Feedback:
  "While you do a great job working within your direct team, we’ve noticed that your participation in cross-functional projects has been limited. Moving forward, we encourage you to actively engage with other departments to share your expertise and collaborate more broadly, especially when working on company-wide initiatives."

Innovation

• Positive Feedback:
  "Your innovative ideas have been a key driver of progress in the team. For example, your suggestion to integrate a new CRM tool has significantly improved our efficiency and client relationships. You always look for ways to streamline processes and bring fresh perspectives, which helps push the team toward excellence."
• Constructive Feedback:
  "There’s room for you to embrace more innovative solutions in your approach to problem-solving. While you maintain a solid understanding of existing processes, we encourage you to explore creative alternatives during team brainstorming sessions, and to experiment with new tools or methods that can improve the department’s productivity."

Accountability

• Positive Feedback:
  "You consistently take ownership of your projects and responsibilities. During the recent product launch, you were not only ahead of deadlines but also kept the team updated with any changes in scope. Your ability to own up to setbacks and work to resolve them promptly is a model for accountability."
• Constructive Feedback:
  "At times, there has been a delay in your communication when issues arise in your tasks. While you are quick to address problems once they become apparent, it would be helpful if you could bring issues to light earlier so that the team can collaborate on solutions sooner. Taking proactive ownership of challenges is an area where you can continue to grow."

Customer Focus

• Positive Feedback:
  "You demonstrate a strong customer-first mindset, always prioritizing their needs. Your recent efforts in addressing a client’s concerns about product delivery were exemplary, where you took the time to listen, empathize, and resolve the issue quickly. Your approach not only impressed the client but also strengthened our relationship with them."
• Constructive Feedback:
  "While you’re attentive to customer needs, there have been instances where feedback from clients was not communicated back to the team in a timely manner. To improve, ensure you’re consistently sharing client insights with your colleagues, so we can act quickly on feedback and continuously improve the customer experience."

Respect

• Positive Feedback:
  "You’ve consistently exhibited a high level of respect towards your colleagues. Your ability to listen actively and consider other people’s perspectives, especially during team meetings, has created an inclusive atmosphere. You ensure that everyone feels heard, which strengthens our teamwork and mutual trust."
• Constructive Feedback:
  "Sometimes, your contributions to meetings can come across as dismissive of others’ ideas. While you may not intend this, it’s important to ensure that you actively listen and offer constructive feedback. By being mindful of the tone and approach when responding to others, you’ll continue to strengthen your relationships with your teammates."

Sustainability

• Positive Feedback:
  "Your commitment to sustainability has been evident in your daily practices. You’ve consistently suggested eco-friendly alternatives, such as reducing paper use in presentations and implementing a more efficient recycling system in the office. Your proactive approach to sustainability has set a great example for the rest of the team."
• Constructive Feedback:
  "Although you’ve suggested a few sustainability initiatives, we believe you can take your contributions to the next level by being more vocal during team discussions about reducing environmental impact. Look for opportunities to integrate sustainable practices into your work processes and engage others to do the same."

Excellence

• Positive Feedback:
  "You consistently deliver high-quality work that sets a standard for excellence. Your attention to detail and commitment to refining every aspect of your tasks, particularly during the quarterly reporting process, ensures that the final product is always top-notch. Your dedication to continuous improvement is inspiring."
• Constructive Feedback:
  "While your work is generally high quality, there have been a few instances where rushed timelines led to minor oversights. Moving forward, consider requesting additional time or resources when you need them to maintain the level of excellence we know you’re capable of. Don't hesitate to ask for support when needed."

Empathy

• Positive Feedback:
  "Your empathy shines through in every interaction. Recently, when a colleague was struggling with a heavy workload, you took the time to offer support and ensured they had the help they needed to meet their deadlines. Your ability to understand and respond to the emotions of others makes the team feel supported and valued."
• Constructive Feedback:
  "There are times when you focus primarily on task completion and could benefit from being more in tune with your colleagues’ emotions, especially during stressful periods. Taking a step back to acknowledge the emotional dynamics in the team could strengthen the connections you already have and help maintain a supportive atmosphere."

Agility

• Positive Feedback:
  "Your ability to pivot and adapt to changes has been invaluable. When our project direction shifted unexpectedly last month, you quickly adjusted your approach, embracing new priorities and working with the team to realign our efforts. Your flexible mindset helped the team stay focused and meet our deadlines despite the changes."
• Constructive Feedback:
  "While your ability to adapt is impressive, there have been moments where you’ve seemed hesitant to embrace changes initially. We encourage you to trust your ability to handle uncertainty and lead by example when new directions are introduced. Your agility will continue to set a positive tone for others on the team."

Applying examples across roles

Values-based feedback can be adapted for different roles, even within the same organization. Here are a few examples:

• Sales: "Demonstrated excellent collaboration by working closely with the marketing team to align campaigns with customer feedback."
• HR: "Exhibited integrity by handling sensitive employee concerns with discretion and maintaining confidentiality in all HR matters."
• Technical Roles: "Consistently contributed innovative solutions during project brainstorming sessions and collaborated with cross-functional teams to improve product design."

FAQs

Can values-based performance reviews be used for all roles in an organization?

Yes, values-based performance reviews can be adapted for all roles, from entry-level employees to senior management, by aligning values with role-specific expectations.

What are some challenges companies face when implementing values-based reviews?

Challenges include subjective evaluations, the difficulty of measuring intangible behaviors, and training managers to assess values consistently.

How do values-based reviews impact team dynamics?

Values-based reviews help reinforce a positive team culture by emphasizing the importance of collaboration, communication, and shared objectives.

How often should values-based reviews be conducted?

While the frequency may vary, conducting values-based reviews at least once a year ensures alignment with both individual growth and organizational objectives.

What tools or software can help streamline values-based performance reviews?

HR software like Workday and Lattice offers templates and tools to integrate values into performance management, making the process smoother and more standardized.

What's Next?

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