When people work for you, good communication is essential to establishing a good relationship and to informing the employee about your expectations. To get a measure of how they are living up to the expected job tasks, it is standard practice to inform an employee about his or her performance over a 6-month to year-long period. This usually is accomplished through a written report usually referred to as a performance review, along with a one-on-one conversation to go over salient points of the review.
However, if you’ve ever been subjected to a performance review, you might have your doubts about how useful it is. A recent survey of 1,000 professionals by TinyPulse revealed some interesting information about performance reviews:
- 42% felt that something important was left out of their review due to bias.
- Nearly 25% feared their review, and the most who feared it are Millenials.
- Most prefer an annual review, but 24% prefer it quarterly, especially the Millenials.
Some large corporations are moving away from annual performance reviews and instead are implementing immediate review of performance for specific tasks and assignments upon completion. Yet, many small business employers still find it helpful to prepare a written review and have a direct meeting with each employee. This can work due to the more informal nature of a business with a small number of employees.
Keeping the fear factor and other concerns in mind, what is the best way to go about employee evaluation?
The best situation occurs when the employer balances the good and the bad, definitely offering constructive commentary as much as possible and praising the employee for many good points based on specific facts, not just generalities. Because a defensive mindset is rarely open to new ideas, it is important to provide positive feedback and appreciation of their efforts. It also helps to ask for feedback from the employee during the verbal review.
The University of Tennessee, Knoxville, has some resources that might be of use to you in preparing for and conducting a performance review.
One sweetener for making reviews more palatable for a deserving employee is to tie it to a pay raise or a possible promotion, although some management consultants now recommend that annual reviews and pay raises be separated.
In addition, it is helpful to use measurement-oriented language such as “excels, communicates, manages, directs, and achieves” in the written report rather than generic terms such as “excellent” and “good.”
Harvard Business Review's article "The Performance Management Revolution" noted that businesses in all sectors are "replacing annual reviews with frequent, informal check-ins between managers and employees." This article noted that some businesses are having supervisors give weekly or frequent check-ins with employees, with some small bonuses being provided for jobs well done.
Make the review meaningful and full of enough substance that your employee can use your comments to better his or her performance and attitude. By maximizing the power of an honest and thoughtful evaluation, you will reap dividends because your employee will be motivated to be a productive member of the team and to do his or her best for your business.