It’s getting close to the end of the year, and what happens typically in a business? It is probably the time for annual performance reviews. Everyone who has worked for any period has perhaps had a performance review at one time or another. They either loved it, hated it, or dreaded it and very likely received a salary increase tied to the study. In the usual scenario, a manager reviews the employee’s performance, and there is a good possibility that negative performance is discussed rather than positive reinforcement relating to what can be done in the future to improve performance and productivity.
What Happened to the Review?
In many small businesses and SMEs, performance reviews are never given. Management either doesn’t have the time or doesn’t understand the importance of performance reviews, so they are ignored. Even in the smallest business, performance reviews are essential for the following reasons:
· It allows owners and managers to discuss performance with employees.
· It gives employees a formal opportunity to discuss aspects of their jobs that they view as positive or negative.
· It allows employees to discuss advancement opportunities.
· It strengthens the communication between owners/managers and employees if handled correctly.
Yesterday’s Review
Many think performance reviews are outdated and a thing of the past. When conducted once a year, discuss more negative than positive aspects of performance, and tie a salary increase to the review, they probably are a thing of the past. Reviewing an employee once a year, building a fear factor, seeing anxiety levels rise, and giving a salary increase that might be disappointing are why performance reviews might not be an effective management tool for today’s workforce.
The Modern Review
Regular performance reviews that track daily, weekly, monthly, or quarterly performance allows managers to work with employees to continue the excellent performance, motivate them for higher performance, or improve mediocre performance. If you think about the concept of performance reviews, what positive result can occur by reviewing an employee once or, maybe, twice a year? Most of the time, the manager only remembers recent performance, and the employee does everything possible to impress their manager in the weeks leading up to the review. No wonder it is a less-than-perfect process.
Improve Performance
Performance reviews should not be just about managers doing all the talking and evaluating while employees do all the listening. The optimal employee review is when employees equally participate in the process. They self-evaluate their performance before the assessment based on pre-established goals and criteria. The self-evaluation, compared to a similar performance document prepared by a manager, allows each to see if both are in sync regarding expectations. What was accomplished? Were expectations met? What are the goals for the next performance period? How were you helped or hindered by the company or co-workers in achieving your goals? Numerous areas can be discussed related to an individual’s job performance, expectations, work ethic, etc.
A Modern Approach
A modern approach to performance reviews makes the process:
· More frequent
· Tied as much as possible to performance milestones
· Encourages two-way communication
· Stresses positive versus negative performance
· Highlights areas for improvement
· Urges engagement
· Establishes future goals
Current job performance should be tracked in some way. It can be done manually or with software programs specific to monitor employee performance continuously. Regardless of how performance is tracked, tracking allows managers and employees to view ongoing versions—no waiting and no surprises with once or twice-a-year performance reviews. Employees don’t want surprises regarding how their managers view their performance. Anxiety about job performance and stability does not produce a motivated and highly productive employee.
Motivation
Performance reviews are an ideal time to motivate employees, although motivation should be ongoing in any business and not explicitly tied to certain times of the year. Reviews are not a time for managers to unload pent-up frustrations with an employee. Good management requires constant back-and-forth communication with employees. Performance reviews are a more formal approach to the communication process dealing with performance that should be constant throughout the year.
Salary Increases
When performance reviews and salary increases are given simultaneously, unnecessary problems and anxiety can be created. The only thing the employee thinks about during the review is what the increase will be. For every positive comment the manager makes, the employee believes, “big increase.” And, for every negative statement made by the manager, the employee becomes defensive, thinking any potential increase has just been lowered. Solving this issue can be a matter of separating the two. The performance review is given at one time, and salary increases and bonuses are offered at another time based on the company’s criteria and profitability. When employees understand how jobs, salaries, and bonuses equate to company profit and success, buy-in and engagement become much more accessible.
Constant Communication
Constant communication about job performance is necessary regardless of an employee’s position in a company, top manager, or lowest wage earner. Everyone wants to know how their performance is perceived in their specific jobs. Performance reviews energize employees when handled correctly with a positive, encouraging tone. They understand the areas where they excelled, met expectations, or could improve. Equally, they should realize job stability, growth opportunities, and how the business performs. However, understanding can only result from honest, open, and continuous communication. Part of the communication process can be fostered through an ongoing regular performance review process.