Giving Great Reviews

The performance review: Too often it's an ordeal that's loathed, feared and rescheduled until it can't be put off any longer. So common is the tendency to disparage the traditional employee evaluation that we have to wonder if the annual ritual is worth the effort. Why not drop the whole thing and get to work?

Successful employers, of course, have come to grips with such emotional reactions and recognize the performance review for what it is: The best tool for creating a motivated workforce that boosts the bottom line.

"Having a performance-appraisal system is the most important step any organization can take, regardless of its size," says Dick Grote, a Dallas-based performance-management consultant. "Every single person in every single company wants to know the answers to two questions: First, What is it you expect of me? Second, How am I doing at meeting your expectations? Performance appraisal is the one system we have that gives people the answers to both questions."

And what if you don't have a good system in place. You end up with employees who work in the dark and who think they are doing the right thing because no one tells them otherwise, says Grote. Fact is, people need continuing guidance to improve. "Too often managers don't say anything unless they catch someone doing something wrong."

So how can you conduct a really great performance review. Here are some tips:

• REVIEW THROUGH THE YEAR:

Too often performance evaluations are lumped together into a single high-stress meeting at the end of the year. Not good. Effective evaluation, say workplace consultants, is a continuing process. Successful leaders work closely with employees through the year to set expectations, evaluate progress and readjust performance.

Regular reviews obviate an otherwise all-too-common disaster: Unpleasant surprises at evaluation time. Suppose you make a grand announcement about an employee's poor performance in an annual appraisal meeting. The target of your criticism is likely to come back with this retort: "Why didn't you tell me this earlier in the year?"

That's a valid question, says consultant Grote. "People want to do a good job," he says. "It's the responsibility of the managers to let them know how to do it." That means communicating expectations at the beginning of the year and giving feedback regularly as the months pass.

So just how often should you interact with employees. It depends on the individual and the role they are in, says Grote. Maybe with senior executives annual reviews are adequate. Moving down the ranks means more-frequent reviews. Much also depends on how long the person has been in the current position. For a seasoned employee you may review performance a couple of times a year. A new employee may benefit from a chat each week.

• ALWAYS READY:

According to Don Schackne, president of Personnel Management and Administration Associates, Delaware, Ohio, the best system has no predictable dates for reviews. "Employees maintain a high level of productivity if they don't know when their supervisors will say, 'We are going to sit down this afternoon for a performance review.'"

Conversely, a formal schedule for annual or semi-annual reviews can create what Schackne calls a "performance halo effect." "As you approach the review date, the employee begins to perform better," he says. "Then the review takes place and now the employee sits back and performance slides again." That's bad for everyone.

• QUANTIFY PERFORMANCE:

But just telling employees that they aren't meeting standards won't help; you need to tell them specifically what you're unhappy with.

As an example, let's say that you think Todd's work performance has been deteriorating over the past few months. How do you know. And just how can you communicate your observation to Todd in a convincing way.

To find the answers we spoke with Daniel P. Moynihan, principal at Compensation Resources, a performance and evaluation training firm based in Upper Saddle River, N.J. He boils down the secret to this: "Keep records on employee actions and results, then base performance ratings on those records rather than on subjective feelings."

Here's the reason: Numbers can make a difference in communicating your concerns to under-performers. Suppose you have received lots of complaints from customers about an employee. You'll only cause the person to balk if you say, "You need to improve your customer-relations skills." Instead, state, "We received six complaints from customers about you during the past year." Then read the details of each complaint from written records.

Use numbers, then, when possible. How many times did the employee arrive late for meetings, and by how many minutes? How many arguments erupted in the workplace. By what percentage was the employee under a certain required performance level. How many times did the employee take an extra half hour for lunch? 

All this doesn't mean personal characteristics can't be assessed. You can rate abstract characteristics such as attitude, leadership, initiative, cooperation, interpersonal skills and maturity. But when you do so, make your point with examples from the employee's performance record. The work diary is invaluable for recording examples and numbers.

How about those individuals whose work cannot be measured quantitatively? An example would be a telephone operator or a receptionist. "The receptionist's job is to meet and greet people as they come in the door," says Moynihan. "How do you evaluate how effectively they do that. Maybe you go after customer feedback. Ask clients and vendors: Has the receptionist greeted you well and treated you kindly, and answered the questions you need answering?"

If you can't come up with good measurable objectives, take the three or four main components of the person's job description and evaluate them against actual performance. Ask, "what are the key measurements of a job well-done and is the person performing well?"

• IDENTIFY CAUSES:

So Todd is doing badly. But why. The causes of poor performance can be difficult to determine. Sometimes people are in the wrong role, or outside problems are impinging on their work. Other times there is a manager-employee personality conflict. Try asking the employee: "What would you say is one of the key reasons that you didn't reach your goals." Most people tend to shift blame away from themselves, so you need to get a discussion going. Try asking, "What can we do to improve the work environment to help you perform?"

These conversations can be difficult because they often touch on issues of personality and style. It's important, therefore, to encourage the employee to open up and contribute. "Make the review a two-way conversation," suggests Schackne. "Maybe you say, 'Here is how I see your performance,' and then the employee can come back and say, 'Here is what I think.' Make each of your statements a discussion point rather than a threat." A good program, says Schackne, lets the employee leave thinking, "My boss didn't tear me apart or belittle me or make me feel like less than a whole person."

• SET FUTURE GOALS:

It's not enough to delineate the good and bad points of the past year. Set specific goals for the coming 12 months. List a "vital tasks" agenda in which every measurable high-priority task is outlined. (See sidebar, "Get SMART.") Sometimes your verbal prompts will be sufficient to stimulate the employee toward realizing what needs to be done. But you should also ask the employee for insight. What performance would bring the greatest personal satisfaction one year from now? What talents can be honed.

Set timetables for improvement. They are important milestones that help avoid procrastination. The manager, too, needs to follow a schedule.

One of the traditional failings of evaluations is lack of follow-through. Mark your own calendar at checkpoints which have been coordinated with the employee. Meet with the employee on these dates to discuss progress.

Bottom line: The annual performance review, far from something to dread, is the No. 1 tool for creating a dynamic workforce. Help your employees set their own goals to assure they are invested in the process. Review performance on a regular basis to avoid surprises at the annual review. And finally, go by the numbers: Quantify performance to make sure that facts, not opinions, are the operating mechanisms that assure fairness for all. The result will be motivated workers and a profitable organization.

Pay Raises

Discussing salary increases along with performance reviews is a mistake. "You want to avoid a situation in which the employee is interested only in the last 30 seconds of the meeting and keeps wondering, 'How much am I going to get?'" says Don Schackne, president of Personnel Management and Administration Associates, Delaware, Ohio. You want employees to be focused on self-improvement.

Employees won't focus on performance for its own sake when you hold out pay raises as carrots. "Separate salary increase announcements from performance reviews," says Schackne. "Start with a statement such as: 'Today we are going to talk about performance — we are not going to talk about money.'"

— P.P. 

Get SMART

When setting goals for the coming year with your employees, take care to challenge their capabilities without getting so ambitious as to set them up for discouraging failures.

How? Make sure each goal meets the SMART standard:

Specific. Is the goal stated in concrete terms?

M

Measurable. Does it call for quantified performance?

A

Attainable. Can the employee stretch enough to meet the goal?

R

Result-oriented. Does the goal describe a beneficial outcome?

T

Time-bound. Does it indicate a time by which the goal will be achieved?

Here's an example of a goal that meets the SMART test: "Reduce avoidable absenteeism next year from 10 days to five." This statement is specific in addressing absenteeism; measurable in specifying exact days; attainable because the employee can reach it; result-oriented because it leads directly to conduct beneficial to everyone, and time-bound in that it states the goal must be reached by the end of the year.

— P.P.

Source: Compensation Resources, Inc.,

Upper Saddle River, N.J.

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