Performance Reviews: Make Them Work

January 24, 2017

Everyone who has ever worked for any period of time has probably had a performance review at one time or another. They either loved it, hated it, or dreaded it, and probably received a salary increase tied to it. A manager probably reviewed their performance once a year...maybe twice...and very likely stressed negative performance rather than positive reinforcement. In between the dates of the performance reviews, there was very likely no mention of performance either positive or negative.

The Non-Existent Review

In many small businesses and SMEs, performance reviews are non-existent. Management either doesn't have the time or doesn't understand the importance of performance reviews, so they are simply ignored. Are performance reviews a routine part of your company's HR policies? If not, here are important reasons they should be:

•    It gives managers an opportunity to discuss performance with employees.
•    It gives employees a formal opportunity to discuss with managers aspects of their jobs that they view as positive or negative.
•    It gives employees an opportunity to discuss advancement opportunities.
•    It strengthens the communication between managers and employees if handled correctly.

The Outdated Review

Many think performance reviews are outdated and a thing of the past. When handled the "old fashioned way," they probably are a thing of the past. Reviewing an employee once a year, building a fear factor, seeing anxiety levels rise, and giving a salary increase that might be disappointing is definitely a reason that performance reviews might not be an effective management tool for today's workforce.

The Modern Review

Regular performance reviews that track daily, weekly, monthly, or quarterly performance gives managers an opportunity to work with employees to continue good performance, motivate for higher performance, or improve mediocre performance. If you think about the concept of performance reviews, what positive result can occur by reviewing an employee once or twice a year? Most of the time, the manager only remembers recent performance, and the employee makes a "push" to impress his or her manager in the weeks leading up to the review. No wonder it is a less than perfect process.

Performance reviews should not be just about managers doing all the evaluating and talking while employees only listen. The optimal employee review is when employees equally participate in the process. They self-evaluate their performance prior to the actual review based on pre-established goals and criteria. The self-evaluation when compared to the identical performance document prepared by their manager allows each to see if both are in sync regarding expectations. What was accomplished? Were expectations met? What are the goals for the next performance period? How were you helped or hindered by the company or co-workers in accomplishing your goals? Etc. You can imagine the array of questions that can be asked related to an individual's job performance, expectations, work ethic, etc.

A modern approach to performance reviews, however, makes the process:

•    More frequent
•    Tied as much as possible to performance milestones
•    Encourages two-way communication
•    Stresses positive versus negative performance
•    Highlights areas for improvement
•    Urges engagement
•    Establishes future goals

There are many software programs and apps specific for tracking employee performance on a continuous basis. These programs allow both managers and employees to view ongoing performance. No waiting and no surprises with once or twice a year performance reviews. Check out these that target and would be beneficial for your business. Even if this type software is not used, current performance should be tracked in some way. Employees don't want surprises when it comes to how their performance is viewed by their managers. Anxiety about job performance and job stability does not produce a motivated and highly productive employee.

Motivation

Performance reviews are an ideal time to motivate although motivation should be ongoing in any business and not tied only to certain times of the year. Reviews are not a time for managers to "unload" pent-up frustrations with an employee. Good management requires constant back and forth communication with employees. Performance reviews are just a more formal approach to the communication process dealing with performance that should be constant throughout the year.

Although you might read that many large companies are currently eliminating performance reviews, this doesn't mean that the process is obsolete. It is all based on how performance reviews are handled. When a review is performed once a year and has negative connotations attached to it, perhaps it is best under those circumstances to do away with it.

Salary Increases

When performance reviews and salary increases are given at the same time, unnecessary problems and anxiety can be created. The only thing the employee thinks about during the review is what the increase is going to be. For every positive comment made by the manager, the employee thinks "big increase." And, for every negative comment made by the manager, the employee becomes defensive thinking any potential increase has just been lowered. Solving this issue can simply be a matter of separating the two. The performance review is given at one time, and salary increases and bonuses given at another time based on the company's criteria and profitability. When employees understand how jobs, salaries, and bonuses equate to company profit and success, buy-in and engagement becomes much easier.  

Constant Communication

Constant communication about job performance is necessary regardless of an employee's position in a company...top manager or lowest wage earner. Everyone wants to know how their performance is perceived in their specific jobs. Performance reviews when handled correctly with a positive, encouraging tone energizes employees. They understand the areas where they excelled, met expectations, or could improve. Equally, they should understand job stability, growth opportunities, and overall how the business is performing. Understanding, however, can only be the result of honest, open, and continuous communication. Part of the communication process can be fostered through an ongoing regular performance review process.