Employee performance reviews are more than a task on a company’s to-do list to reveal excellent and poor employee performance. When done correctly, performance reviews should help build employee/manager relationships and help business owners keep the pulse of their business’ success.
By taking the time to understand what your employees are experiencing within your business and how they perform in their roles, you are provided with information to help solve problems and make sure your employees are given all the tools to succeed – both of which are vital to the success of your business.
“It’s no different than raising children. If you don’t perform performance reviews, how do you know they are doing the things that need to be done?” says Bob Cooper, president of Elite Worldwide Inc., a company that helps shop owners build a successful business through one-on-one coaching with industry experts.
“Businesses don’t fail; communication fails,” he adds.
The Pulse of Performance
To create a performance review plan, you’ll want to start with how regularly you’d like to conduct reviews.
While annual reviews are often standard practice, you may find that semi-annual and even quarterly reviews may work better for your employees and your business.
“There isn’t a magic number or ‘correct’ number of times to conduct performance appraisals each year,” explains Brandi Britton, district president of OfficeTeam, an administrative staffing service. “It could depend on the company, the department, how long the worker has been in the position, staff productivity or employee morale.”
Some employees may need to meet formally about their progress more often than their peers. Based on how long an employee has worked at the company or the specific tasks that a job may require, some employees may need to meet with their supervisors more frequently.
According to industry experts, many managers will often see annual performance reviews as an administrative task and become more concerned with getting the review done than actively evaluating employees’ progress. If managers do not take the time that is necessary to provide adequate feedback to their employees and speak with them about their career goals, employee performance won’t change.
“Reviews that are viewed as administrative processes don’t tend to provide value or insight,” says Rodney Alvarez, vice president of talent management at Celtra Inc. and member of the HR Discipline Panel at Society for Human Resource Management (SHRM).
In order to have a successful review with an employee that is taken more seriously and is more thorough, Alvarez suggests conducting performance reviews at least quarterly. Semi-annual reviews work very similarly. While they obviously occur less frequently than a quarterly review, doing two reviews a year keeps information fresh and allows you time to detect and correct issues with an employee.
For Elite Worldwide’s Cooper, every six months is just the right amount of time to meet with employees to spend time talking about the company, the employee and his or her growth and goals.
Conducting the Review
Regardless of how often a performance review takes place, the primary goal of a review is to make sure that an employee and his or her supervisor are on the same track. The outcome should leave the employee with ideas on how to improve performance and a set of goals to accomplish before the next review. The manager should come out of the meeting with an understanding of the employee’s experience within the business and what needs to be done moving forward.
When developing content to discuss and include in a performance review, start with what a manager already knows about the employee. Performance reviews should be a culmination of the informal discussions taking place throughout the year. When conducting a review, the manager should have records of each employee’s awards, accomplishments, complaints and reports from previous reviews that have been gathered throughout the course of the year. If a review is performed without documentation of an employee’s progress, important topics that should be discussed may be forgotten, resulting in missed opportunities on both sides of the table.
Each review must be sincere on both the manager’s and the employee’s side or it risks being demotivating as opposed to constructive.
There should be no reason for an employee to think that there is “nothing worth discussing” in a performance review. If this is the case, the methods used to conduct reviews should be modified. In addition, all employees should feel free to approach his or her supervisor about concerns with the performance review process and with status updates about performance throughout their time at the company.
“Nothing in the review should come as a surprise; there should be an open environment throughout the year, where discussions of successes as well as areas for improvement are commonplace,” says OfficeTeam’s Britton.
Additionally, Cooper suggests that the reviewer should notify the employee at least a week prior to the review and provide them with the paperwork and information up for discussion. Performance review documentation normally includes a self-review form where the employee can provide feedback on their own performance, outline their goals and make suggestions to what the company or manager could do better moving forward.
Reviews should also be conducted face-to-face, as this interaction gives the manager and the employee a chance to truly interact and exchange feedback.
“It gives the manager a chance to assess nonverbal cues. It also reduces the potential for miscommunication and makes it easier to foster an open dialogue between the manager and employee,” Britton says.
After the performance review is complete, the manager and the employee should both understand what changes need to be made and what goals should be met. To avoid confusion or misinterpretation of expectations, managers should take notes on what was discussed during the meeting and email any changes to the original review documents to the employee.
It is always a good idea to give new hires some extra attention as they learn their role; therefore, having more reviews at the beginning of their employment can help managers gauge performance early in the job.
Elite Worldwide’s Cooper suggests taking the following actions within the first 90 days of employment:
First Week: Have a 15-minute “mini review” at the end each day. Simply speak with the employee at the end of each day to discuss how the job is going and how they did during any orientation programs.
First Month: Have a review at the end of each week.
The Months After: Perform a review at the end of each month until the probationary period has ended and the employee can be added to your company’s regular performance review cycle.
The 50/25/25 Strategy
Cooper suggests structuring the process for your sit-down performance review:
• 50%, half of the review is spent reviewing the employee
• 25% is spent allowing the employee to review your company
• 25% is for the employee to review and give feedback to whomever is conducting the review
Alvarez suggests a hybrid performance review model that combines a competency-based evaluation with a more objective task-based review.
• Have the manager assign tasks depending on the frequency of the review.
• Define the vital competencies for the job.
• Assess the achievements since the previous review based on the employee’s role and proficiencies.
How to combat poor performance
If you’ve already determined what your employee needs to improve their performance but is still falling short, Cooper of Elite Worldwide Inc. suggests following the “Four T’s of Managing People”:
- Transfer into another position
Start with providing a struggling employee with additional training. If that doesn’t help performance, try transferring the employee into another position. If your employee is still not meeting their performance marks, it is now up to you to either tolerate their under-performance or terminate their employment.