11/ 18/ 2005
by Karen Greenwood, NFIB Legal Foundation
Performance reviews often seem like a mandatory exercise that provides little value to the employee or employer. However, a well-conducted performance review benefits both by improving communications and the employee’s effectiveness. If you need to fire an employee, performance reviews can provide important protection if the employee challenges the termination.
Effective performance reviews improve communication on many levels. First, performance reviews provide an opportunity to formally assess and communicate the employee’s contribution to the organization and identify his or her strengths and weaknesses. It’s a great time to discuss and rectify poor performance as well as acknowledge and congratulate strong performance. It’s also the appropriate time and setting to give salary raises and promotions or demotions where warranted. Finally, the review also allows you to realign the employee’s goals and responsibilities with the company’s overall objectives. Remember the following when conducting reviews:
- Set a date. Performance reviews are often not taken seriously by managers or employees because they are often rescheduled, rushed or completely forgotten. Sticking to a set date and time gives the meeting meaning and shows a commitment to employees and their work.
- Meet in a quiet setting. Arrange the review in a room that will be free from distractions. By having the meeting in a private setting, both you and the employee can dedicate full attention to the review rather than be interrupted by phone calls, e-mails and other distractions.
- Prepare ahead of time. Before the meeting, review each goal set for the employee. Document your praise and criticism and ask the employee to come prepared to assess his or her performance.
Components of an effective review include:
1. Past goals: Review the employee’s job objectives. Acknowledge the work he or she completed during the past review cycle. Communicate with specificity the employee’s success in surpassing, meeting or underperforming their responsibilities. Offer praise for accomplishments as well as suggestions for improvement.
2. Company’s direction and goals: Discuss with the employee how his or her job responsibilities fit in with the company’s short and long-term goals.
3. Set goals: Determine what is to be achieved (improved financial results, customer satisfaction or innovation) and how it will be measured.
4. Employee feedback: Allow the employee to voice his or her concerns and respond to your review.
5. Career development: Identify professional development and training that will help employees reach their career goals and grow professionally. Discuss the requirements and skills necessary to earn a promotion.
6. Follow-up: Write a summary of your review and document the goals for the coming year. Research and address the employee’s concerns and/or questions.
Other tips include:
- Provide ongoing feedback throughout the year, so the formal review will contain no surprises.
- Lead by example: If you’re always late, it’s hard to criticize an employee for being late. Employees often follow the example of their boss, so conduct yourself as you would want your employees to act.
Learn or train how to give and receive feedback: Although it may seem easy to give effective feedback, when it comes time to give performance reviews, many people have a difficult time both praising and criticizing their subordinates as well as accepting the feedback the employee wants to give. Therefore, it’s a good idea to take a seminar or read up on how to effectively give and receive feedback.
