Managers and employees alike often dread annual performance reviews, but when they are done well those reviews can help your business.
Employee reviews are “one of the best management tools people have to improve performance,” says Sharon Armstrong, an HR consultant with 20 years of experience and author of The Essential Performance Review Handbook.
Employees, supervisors, and companies all benefit from performance appraisals. Employees generally want to understand their employers’ expectations and have a manager who talks with them about their progress, encourages their development, and provides opportunities for them to grow, Armstrong explains. Research shows that those conditions increase employees’ productivity and job satisfaction.
Supervisors can use performance reviews to develop their management skills, identify training needs, and build rapport with employees. And the business owner or manager can gather objective information for making decisions about raises, promotions, training, and other personnel actions, she says.
To be effective, however, performance appraisals shouldn’t be a standalone annual event but rather “a culmination of workplace conversations,” Armstrong says. Even during job interviews, employers should talk about the standards and goals for a position. They should share their performance review form with employees during orientation and discuss in detail what they expect.
To make the whole process practical and painless, follow these guidelines:
1. Develop the habit of delivering feedback frequently. “When you see it, say it” is a good mantra for managers to follow in discussing performance with employees, Armstrong says. Don’t wait for formal reviews to praise or critique performance. Walk around and talk with employees about their work, or set regular times to briefly discuss progress, such as a weekly check-in. The only annual aspect of your performance-review system might be filling out a specific form on a work anniversary or implementing raises.
2. Document performance. Armstrong advises managers not to put anything on a performance appraisal that they have not personally seen. Throughout the year, as you talk with employees about performance, jot down notes for yourself. At review time, you will have a full view of the employee’s work, untainted by recent events or selective memory, and you will be able to support your rating of the employee. “Nothing makes a performance appraisal more credible than having it chock-full of examples,” she says.
3. Cover the ABCs on your review form. An up-to-date job description will help you decide what to include in the appraisal. A performance review should be accurate, behavioral, complete, and consistent, providing a fair and objective assessment based on the employee’s job and goals, Armstrong says. (Learn how to avoid four common mistakes in our previous post “Is Your Performance Review Doing Harm or Good?”)
4. Hold a discussion. Armstrong recommends that managers have their performance appraisal in draft form when meeting with employees. Don’t hand the employee a completed form to read before the meeting when you aren’t there to put the comments in context. The manager and employee should discuss the appraisal together, and if the employee has completed a self-appraisal, discuss where the two differ. The manager can complete the form after taking time to consider the employee’s comments.
5. Ask the employee for feedback. Remember that you have a role in the employee’s performance, too. Armstrong suggests asking questions such as “What three things have I done recently to help your performance?” and “What are three things that you want me to do?”
6. Set goals. Use the review to clarify the employee’s role at the company. Update his or her job description, if necessary, and set employee goals that are meaningful, measurable, and motivating. When the employee has goals that are aligned with the company’s goals, Armstrong says, “That’s a real motivator.”
7. Allow the employee to comment. Create a section on the review form for the employee’s response and ask the employee to sign the appraisal. The signature documents that the employee received the review, even if he or she didn’t agree with its contents, Armstrong explains. However, if you have held frequent conversations about performance throughout the year, the annual review won’t contain any surprises.
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