The year-end performance review is often something managers, HR professionals and employees dread. But it doesn’t have to be. In fact, preparing in advance should help all parties feel comfortable to discuss the past year while taking the time to discuss how to succeed into the next year. And making it an open-ended discussion – not a high-pressure interrogation where employee flaws are the focus – is what leads to a successful performance review.
That’s why a successful performance review should be a conversation, says Tony Sorensen, CEO of Versique Search and Consulting and McKinley Consulting, a leading Minnesota IT and business consulting services group.
“While many times employees are nervous about what reviews might say about their work, it should really be focused on how both parties can be better in the year ahead,” says Sorenson. “While certain aspects of an employee’s work might need to change, the key is to approach them as challenges to overcome together, not as a weakness inherent to their work style.”
A yearly review can benefit not only employees, but the firm as well, says Sorenson, adding “It should really be treated as an opportunity for both sides of the table to get honest feedback and constructive criticism that will improve the work you do together.”
According to the Society of Human Resources Management, the performance appraisal provides a means for discussing, planning and reviewing the performance of each employee.
Regular performance appraisals:
- Help employees clearly define and understand their responsibilities.
- Provide criteria by which employees’ performance will be evaluated.
- Suggest ways in which employees can improve performance.
- Identify employees with potential for advancement within [Company Name].
- Help managers distribute and achieve departmental goals.
- Provide a fair basis for awarding compensation based on merit.
An article titled Tips for Conducting Better Employee Performance Reviews by Robert Half provided these tips to consider:
Prepare Talking Points
Giving employees the full value of an evaluation requires preparation on the manager’s part. If you try to wing it, there’s less of a chance your team members will understand that the session is necessary for their career progression. When you’re preparing for the meeting, here are some details to compile:
- Speak with colleagues who work closely with each employee to solicit opinions regarding his or her performance.
- Find a list of goals set in last year’s performance review and have them at hand.
- Note performance issues related to specific projects or tasks.
- Find positive feedback to accompany the areas needing improvement. This will help keep the conversation from focusing only on criticism.
During the Review: Conversation Over Criticism
Keep in mind you’re having a two-way discussion. This is not a criticism session, so avoid detailing every mistake an employee has made and don’t dominate the conversation. Make it instead a chance to discuss a team member’s strengths and weaknesses in the context of his or her achievements over the review period.
Engage employees and allow them to work with you to note areas needing improvement and objectives for the future. Think of the interaction as more of a question-and-answer session, in which you’ll ask employees how they believe they’re performing and what they need to improve.
While it’s important to avoid an overly critical tone, don’t skirt around areas requiring improvement. An annual review isn’t worth much if employees leave unaware of exactly where they need to improve their performance.
Set Goals
A major component of a performance review is to work with your employees to create a written plan for future career growth. They need to understand what is expected of them. If your team doesn’t know what goals they should be meeting, there’s no way to measure their progress.
This is another instance where finding specific examples is helpful. Just obliquely telling an employee to work on his or her time management is not direct enough. Note, for example, that there are repeated instances of missed deadlines for submitting critical reports. Also identify trainings or other resources employees can use to build their skills and improve their performance.
In another SHRM article titled Train Managers, Maximize Appraisals, Jerry Gratton, vice president of people at 1-800-GOT-JUNK?, a junk removal service headquartered in Vancouver, British Columbia, Canada, discussed plans to roll out a new manager training program for employee performance appraisals.
“We’re going to be teaching a new way of doing it. We’re going to be getting people excited about performance reviews, if you can believe it,” Gratton says.
If all goes well for the 180-employee company in developing the program for the managers, the plan is to create turnkey training that the corporate office can offer to its 200 franchisees.
Gratton is tackling a common business quandary: How can HR professionals get managers excited about the employee performance review process in light of all their other responsibilities? The key, say experts like Gratton, is to focus on the business case for performance feedback and to address managers’ primary concerns—such as how to have the difficult conversations—as opposed to focusing on checking off boxes on administrative forms.
“Every part of doing a performance appraisal is hard,” acknowledges Dick Grote, founder of Grote Consulting Corp. in Frisco, Texas. “Performance appraisals have a huge impact on human happiness. A performance appraisal is the primary determinant of how much money I’m going to make or how far in the organization I’m going to get. Organizations need to take it seriously. The hard part is having the courage to be honest about exactly how well a person has performed.
“We use the performance appraisal data to make a lot of important business decisions,” continues Grote, author of How to Be Good at Performance Appraisals (Harvard Business Review Press, 2011). “If the company doesn’t train managers in how to do a good job in assessing performance, then the data coming out of the performance appraisal system is inaccurate and it results in bad decisions in compensation, succession planning and reductions in workforce.”
How useful are performance reviews? It depends on whom you ask. In an Accountemps survey, 94 percent of chief financial officers (CFOs) interviewed said formal evaluations are either somewhat or very effective in helping employees improve their performance. Yet nearly one in three workers (31 percent) disagreed, calling these appraisals either somewhat or very ineffective.
“The success or failure of an appraisal depends on how clearly both performance expectations and feedback are communicated to employees,” said Max Messmer, chairman of Accountemps and author of Human Resources Kit For Dummies®, 2nd Edition (John Wiley & Sons, Inc.). “Managers and their staff should be in agreement at the outset on what criteria will be used to evaluate effectiveness in a given role.”
Performance reviews shouldn’t be delivered just once a year, Messmer cautioned. “Nothing discussed in a formal evaluation should come as a surprise to the employee,” he said. “The best managers regularly give their teams performance feedback throughout the year.”
Accountemps offers the following do’s and don’ts to help managers conduct effective performance reviews:
| Don't | Do |
|---|---|
| Criticize the person in general. | Provide constructive feedback on specific performance issues so staff know exactly what they need to improve. |
| Sugarcoat the issues and avoid discussing real problems. | Be upfront about areas for improvement. |
| Wing it. | Prepare. |
| Dominate the conversation. | Engage employees. Remember that it is a two-way conversation. |
| Ask employees to come empty-handed. | Ask your team members to conduct a self-assessment of their progress toward goals set during the prior review cycle. |
| Focus only on the negative. | Tell staff what they are doing well to recognize accomplishments and reinforce positive performance. |
| Go it alone. | Ask for feedback from other colleagues for a more well-rounded review. |
