Whether it’s a small or large one, companies of every size will be doing a great disservice if they skip the annual performance review. Not only is the performance review a great tool to ensure employees are aligned with the goals of the business but it also clues in workers about how they are faring within that organization.
But not all performance reviews are created equally. Companies that fail to take them seriously or ones that don’t plan ahead end up scrambling at the end of the year losing the opportunity for both sides to benefit from the performance review.
“It’s best to plan ahead before the review year begins to make sure that the reviews are tied to the performance of the business,” says Laura T. Kerekes, chief knowledge officer at Think HR Corp. “The least useful performance reviews are the ones that evaluate the traits of the individual.”
While you want employees that are team players and are pleasant to be around, more important is how their work is adding to the goals of the company, which is why experts say that’s where companies should focus when it comes to the performance reviews. Let’s say it’s a sales person’s performance you are reviewing. It’s great that the person is likeable and possesses great communications skills but more important is did he or she meets the sales quota throughout the year on consistent basis.
“The success should be measured by coordinating the review with the actual job description,” says Pat Sweeney, human resource manager at Old Colony Hospice and Palliative Care. “It should never be arbitrary, but based on some factors that relate to the actual performance expected from a specific position. The measure will take a lot of difference guises: for sales, it will obviously be quantitative; for other positions it may be more qualitative.”
When it comes to performance reviews, the aim should be to have a documented demonstration that the employee has met the job roles and made a positive impact on the business, adds Sweeney. From the employee perspective the goal should be to highlight what they achieved during the previous year and what they need to do in the future to continue to grow within the company. What’s more Sweeney says employers should have an official policy for when and how performance reviews are conducted instead of doing it on a whim. “Doing it on the fly can lead to other issues: discrimination, or unequal treatment leading to possible legal complications,” she says. “Having an official program and policy avoid surprises, entrapment or discrimination claims.”
In addition to having a formal policy and aligning the reviews with the goals of the company, Kerekes of Think HR says it’s a good idea to give everyone their review at the same time as opposed to basing it on the anniversary of their start date. By doing that you will be evaluating each of the team members on the same metrics at the same point in time, she says. “It’s a more balanced, and fair review of how well the individual is doing,” she says. “It’s not painted by the most recent thing the employed did or didn’t do but on the total picture.”
One of the biggest mistakes companies make when doing performance reviews is to start thinking about it a month before the reviews kick off. That gives the managers little time to really think about how the employee performed during the past year and what areas he or she needs to improve. Kerekes says a good practice is for managers to provide routine feedback and even jot down key performance measures throughout the year so he or she isn’t going into it blind come the end of the year. “The year-end reviews that fail are the ones where there isn’t much discussion or feedback throughout the course of the year,” she says. “All of sudden its review time and it’s so much work to try to remember what this guy did all year and encapsulate it in whatever form or piece of paper they use.”