NASE in the News

Great Performances

Four Strategies For Successful Employee Reviews
Phillip M. Perry

You want the most bang for your buck when you invest money in your business. If you buy a computer or truck, for example, you select a top-quality machine and maintain it for peak performance.

Don’t you want the same results with your employees? After you hire quality people, you want to make sure they keep working in ways that boost your bottom line.

People, though, are not machines. You can’t oil them or replace their defective parts or upgrade their memories. So just how can you keep them in great shape?

The answer lies in periodic evaluations. Performance reviews are maintenance programs that keep your employees running in top condition.

“Performance appraisals are even more important for the owner-operator of a small business than for a big corporation,” says Dick Grote, a Dallas-based performance management consultant.

If you have only two employees dealing with the public, he notes, an underperforming worker will negatively affect 50 percent of your interaction with customers. “That’s a disaster,” says Grote.

At the small organization, the owner can watch employee performance closely, adds Grote. “When people know what’s expected and they know how they are doing, they can do exactly what the owner wants, and that is powerful.”

1. Review Performance Regularly
Regular supervisory feedback keeps employees on track and corrects habits that have a negative effect on your business. Most important, it reinforces productive behaviors.

“Good supervisors let employees know what they are doing well. It’s very important to maintain an ongoing ‘back and forth’ throughout the year between supervisor and employee,” advises Grote.

Effective feedback also enhances the team nature of the workplace.

“The more you couch your feedback in terms of ‘how we are doing’ the more effective your feedback will be,” says Grote.

The identification of an individual employee’s goals with those of the organization is an area where small businesses, with their close-knit human network, have a leg up on the big corporate competition.

Of course, regular and specific workplace feedback is not a panacea. There’s real value in having structured annual discussions where supervisors and employees discuss how things are going and what steps need to be taken in the year ahead.

Indeed, sometimes the formal review is the only environment where sub-par performance can be addressed in a way that makes a difference.

“Human beings have an infinite capacity for self-delusion,” notes Grote. “With some people it won’t matter how many times you have corrected them during the year. They will still say they did not understand.”

In such cases, the formal review is the right setting for establishing precise performance parameters that the employee is expected to achieve over the coming year.

Even so, annual reviews will go much smoother when employees have had the benefit of regular feedback. Keep unhappy surprises to a minimum by allowing employees to correct any sub-par performance areas throughout the year.

2. Be Specific
Profitable businesses rate employees against performance parameters which are measurable.

“If performance can be measured, performance can be improved,” advises Jerry Nelson, president of HRN Management Group in Salt Lake City. “Employee evaluations with specific parameters can be tremendously effective in improving workplace performance.”

Effective, measurable parameters identify the critical competencies specific to each position.

“You value a secretary for reasons different from those of your debt collector or your office manager,” points out Nelson. “So for each position, ask ‘what behavior is most important to the job?’”

Micro-businesses face a special challenge because people tend to wear many hats.

“When employees are doing a variety of tasks, they need to be reminded to focus on the important aspects of their jobs,” says Nelson. “People tend to think just because they are working hard they are doing well. That’s not always the case. They need to concentrate most on the things that keep the company moving forward.”

But how can you assess employee performance against critical competencies in a way that convinces the employee of the need for improvement? Give specific examples of workplace behavior.

“A performance appraisal is a formal record of a supervisor’s opinion about the quality of an employee’s work,” points out Grote. “The opinion, though, has to be objective and based on facts. Examples will make the assessment objective.”

The magic phrase, adds Grote, is “For example . . .”

Your assessment that Joe needs to improve customer communication skills will be effective if you can go on to say something like this: “I am concerned about how you spoke with Mrs. Johnson when you handled the installation at her site . . .”

Effective performance appraisals improve profitability by inspiring employees to improve in their essential competencies.

“If you don’t measure performance and report back, it is easy for things to slide,” says Nelson. “Then mediocrity takes over.”

3. Set Goals For Improvement
So one of your employees is doing badly. But why?

Maybe the cause is not so easy to determine. Could she simply be in the wrong role? Are outside activities impinging on her work?

Try asking the employee for some help in words such as these: “What would you say is one of the key reasons for your poor performance?” Since she may instinctively shift blame away from herself, you’ll 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 Don Schackne, president of Personnel Management and Administration Associates in Delaware, Ohio.

“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.”

Once causes for poor performance are identified, set goals for improvement with a clear time frame for accomplishment. Calendar dates can be important milestones to help avoid procrastination.

You need to follow a schedule, too. One of the traditional failings of evaluations is lack of follow-through. Mark your own calendar at checkpoints that have been coordinated with the employee. Meet on these dates to discuss progress.

4. Focus On Employee Strengths
No one looks forward to being judged. And the performance review is no exception. Even if we think we’ve been doing good work, we’re still nervous about what our supervisor might say.

“The feelings we have about performance reviews are very similar to those we had back in grade school,” notes Grote, the Dallas-based performance management consultant. “Even if we always got good grades, we were still nervous about our report cards.”

Wouldn’t it be great – and lead to more productive reviews – if the negative feelings about evaluations could somehow be diminished?

“I don’t know if you can ever get people to look forward to reviews,” says Grote. “But here’s something that can help: Keep in mind that the payoff in performance appraisals comes not from focusing on weaknesses, but from building on strengths.”

You can get some help from the employee in developing a clear picture of strengths. Before the review, Grote suggests saying something like this to your employee: “Dick, pretty soon I will be doing performance reviews. Before I start thinking about yours, over the next couple of days please jot down a list of things you have done in the past year that you really feel good about. What are you really proud of?”

This list of achievements — you might call it a “good stuff list” — will promote a positive mindset on the part of the employee as you go into your meeting.

“There’s nothing more embarrassing for a manager than to hand a performance review to an employee, only to be reminded of a forgotten critical project the person had finished over the past year,” says Grote. “You can say you ‘forgot.’ But the employee will never forget.”

Indeed, a positive attitude on the part of both employee and supervisor will go a long way toward creating a morale-building event that will be a springboard to the year ahead.