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Employee reviews are opportunities you should not miss

September 25, 2012

Article courtesy of SBAM Approved Partner AdvanceHR

Annual employee reviews sometimes get a bad rap. They can be time-consuming, distracting, and may require supervisors to confront problems they would rather avoid. But if handled properly, annual reviews can provide opportunities for both sides to improve performance. Here are six steps to consider in the process.

Six Steps to More Positive, Productive Evaluations

At most companies, annual employee reviews are required. However, even if they are mandatory at some organizations, they may not happen with regularity. In the worst cases, they may not happen at all.

The fact is, many business owners and supervisors dislike the process so much that they procrastinate rather than perform regular reviews. But you shouldn’t overlook the opportunities that come with providing feedback to employees. After all, some employees may be unaware of their own shortfalls as well as their strengths. By calling attention to both, you can help enhance good habits and work to eliminate the bad.

What’s more, the higher up on the chain of command an employee is, the more critical it is that you give them regular, objective evaluations. Your company’s profits may depend on it. Here are six steps to consider in the process:

  1. Before the scheduled meeting, ask employees to do a self-evaluation of issues such as timely completion of projects and relationships with colleagues. That will get them involved, as opposed to feeling like the review is being “done” to them.

    Even if employees rate themselves unreasonably high, the exercise forces them to think about how they performed. As part of a self evaluation, ask employees: What one single change could you make that would have the biggest effect on your work?

  2. During the evaluation, offer your assessment of the employee’s strengths and weaknesses. Be sure to base your statements on facts that you’ve gathered ahead of time. The more specific, the better.

    Example: “In March and again in June, your sales quotas were twenty percent below the average for our company.”  Or, “In the last six months, I’ve received four comments from customers noting how friendly and efficient you are in handling claims.”

    Be careful about bringing up a weakness for the first time during an annual review. If you spot a problem months before, but never discuss it with the employee, he or she may feel blindsided if the first mention is in the evaluation. Pointing out issues as they arise gives employees the chance to correct them. Then, during annual reviews, you can either commend the employee for making progress or discuss how the situation is not satisfactory.

  3. Resolve differences between your evaluation and the employee’s self-evaluation. It’s possible that one side has some of the facts wrong.

    Example: Your payroll clerk thinks he has a perfect record for accuracy during the last two quarters because, unlike previous quarters, he received no corrections from his manager. But the manager of the department told you that the clerk didn’t care about the errors and it was quicker and easier to fix them. In that case, the payroll clerk and the payroll manager both need to be confronted.

  4. Pay attention to the details. Try not schedule more than one employee evaluation in a single day. You won’t be able to give each person the attention and concentration necessary. Leave enough time to prepare written notes of the conversations while the details are still fresh in your mind.

    And make sure to look at the entire past year’s performance. It is easy to just focus on the last couple of months, but that can lead to employees making noticeable improvements right before annual reviews are conducted.

  5. Agree on future goals. In other words, identify areas where behavior needs improvement or skills need upgrading. If the employee expresses a desire to move to a higher position, discuss how he or she can meet the qualifications. Make the goals as specific as possible.
  6. Be a coach as well as an evaluator. Effective evaluators don’t just look at an employee’s past behavior. Instead, they act as an employee’s coach to come up with goals for the upcoming year that: are in sync with the organization; challenge the individual’s skills and talents; and can realistically be achieved.

Yes, employee reviews can be time consuming and distracting. But if you never tell employees that they aren’t performing up to the company’s expectations, they may assume you are satisfied. What about excellent employees? If you don’t take the time to point out their exceptional performance records, they may conclude that their efforts are unappreciated and begin to search for work elsewhere.

Whenever possible, look at employee annual reviews as an opportunity to “accentuate the positive and eliminate the negative.”

What About Reviewing Top-Level Executives?

One way many business owners choose to evaluate their executives and top managers — or even their own performance — is by using what is known as a 360-degree approach.

As the name suggests, 360-degree feedback produces a more complete picture of an employee’s performance than if he or she were just reviewed by supervisors. It can include internal and external feedback. Internal comments can be solicited from management, subordinates, colleagues, and people from other departments. External comments can come from clients, suppliers or outside consultants.

Getting 360-degree feedback is often important because profits can erode when leaders are not effective. Some studies show that the number one reason people quit their jobs is because of what they call a “bad boss.”

Here are some considerations when using a 360-degree approach:

  • Look at it as a tool for development and communicate that to everyone involved. Of course, you want honest opinions but participants need to know the goal is to make the best use of an executive by providing constructive feedback.
  • Take pains to ensure anonymity. Some people will not say what they really think because they fear retribution. To alleviate such fears, it may help to use an outside facilitator, such as a human resources professional or financial adviser.
  • However, no matter who conducts the evaluations, confidentiality must be assured. In one case in Virginia, an employee sued her defense contractor employer after being fired. A short time earlier, she had participated in a written evaluation of her boss, who obtained the results from an outside consultant. The former employee was awarded $3.5 million in punitive and compensatory damages but on appeal, the state Supreme Court remanded the case for a new trial. Despite the outcome, the case serves as a warning to employers to ensure that confidential evaluations remain confidential.
  • Keep questionnaires short and simple. But give respondents a way to provide more feedback if they choose. 
  • To ensure fairness, disregard super-negative responses to questions that are only given once or twice.
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