07/ 25/ 2007
by Emma Johnson
How to conduct the perfect employee review
Anne Houlihan went into business ownership thinking that criticism was the best management policy--and her employee reviews reflected that philosophy.
"I was from the old school of command and control," says the owner of Rancho Cucamonga, Calif.-based Satori Seal Company. "I didn't want to tell employees they were doing too good of a job because then they'd want a pay increase."
But her scare tactics didn't just keep the pay scale low--they also drove down morale. "My employees were not as productive or motivated," she says. "They were also not as loyal, and I had much more absenteeism. It felt more like it was me against them."
Houlihan has since done away with the old paper forms and now keeps employee reviews casual and enthusiastic--and she remembers to compliment her workers up front. When she does have to challenge her workers' performance, she keeps it constructive. For example, when a solid member of her shipping team was making mistakes, Houlihan asked him during the review how he could improve the situation. He admitted that he was taking on too many responsibilities and could slow down.
"After that he made fewer errors," she says. "Employees need to come up with the solution on their own. The result is a more confident employee, better customer satisfaction and a better bottom line."
Whether it's an executive of a Fortune 500 company facing the board or a teenage worker sitting down with her manager at the movie theater, employee reviews have a bad rap. They tend to be stressful for the employee and are viewed as a source of wasted time for the employer.
But employee reviews, if done well, can be the cornerstone of a business' success, says Francie Dalton, a Columbia, Md.–based management communication and behavior consultant. Yet chances are, Dalton says, either employers don't know how to give quality performance reviews, or they skip them altogether, which sends the wrong message to workers.
"If you don't have a review process, you're effectively saying that the quality of performance is not important to you," she says. "Then people don't know what it takes to please you, and that kind of ambiguity paves the way for problems and eventually could lead to high turnover. People want to feel successful and valuable. The review gives them that."
A Job Well Done
Management consultant Francie Dalton offers these tips to help make your next employee review a success:
Spell it out. Clearly define what your employees' job duties are and how they can successfully complete those tasks upon hiring or promoting them. Use their annual performance reviews as a time to reiterate this information.
Document all year. Keep notes of their performance, good and bad, year-round. When it comes time for reviews, you'll have specific examples to reference.
Mix good with bad. Sandwich criticism of your employees' performance between compliments. During the review, go through each aspect of their jobs separately, detailing first how they excel and then discussing how they could improve.
Make them part of the solution. For tasks that require improvement, allow the employee to devise ways to get the job done better.
Nurture the individual. Find out what the employee's goals are, both within the company and beyond. Make specific plans to help employees achieve their ambitions.
Make it personal. Tailor the review to the personality type. A shoot-from-the-hip personality probably will not respond to subjective feedback. If you're dealing with a sensitive person, consider giving a written review the day before the in-person meeting so the employee will know what to expect.
Be prompt. Set a time and date for the review in advance--and stick to that appointment. Keep in mind that employees may have to psych themselves up to prepare for their reviews, so changing the date can create unnecessary stress.
Keep it professional. If performance is not up to par, compare the failures with the documented duties and be direct. Lashing out may whip them into shape, but as Satori Seal Company's Anne Houlihan learned, it can have a detrimental effect on morale.
