Every manager dreads this topic, as there are always some difficult conversations that occur during the annual “merit” or performance review. While this is commonplace, there are some different ways to handle performance management that will, with the right communication, make the entire process much easier (and well received)! Some of the concepts described below may seem foreign concepts, but once you review the logic you might find they fit you, and your organization, quite well.
Communication This is often the most overlooked part of the performance management process. Communicate often, honestly, and consistently throughout the entire year. The most consistent complaint raised by anyone receiving a performance review is that they were “surprised” by the review. Communicate regularly with your employees (weekly can become arduous, but monthly or quarterly “sit-downs” to talk through performance makes the end-of year process less surprising).
Documentation One of the hardest parts of the formal performance review write-up is having to remember how the employee did all year long. Of course, you can remember the past few weeks (or even few months) but remembering an employee’s behaviors/actions/activities from 6 – 9 months prior is taxing (and dreaded). The solution is simple…keep a folder, whether a physical folder in a secure location or a folder on your computer. Whenever an employee does something good, or bad, simply make a copy of it and save it. Also, document your conversations that you had during the sit-downs (see above). When it comes to the write-up, referring back to the folder is invaluable. You will be able to see trends and provide specific examples to point to for discussion.
Goals This is often the most understated yet important points of the performance discussion…what are your goals and expectations of the employee for the up-coming year. There are two types of goals, those tied to the job (quality, quantity, etc.) and those that are more on the personal level (communication, teamwork, etc.). Keep in mind that the goals should be measurable, meaningful, and quantifiable (as much as possible). Goals are the measuring stick which leads to success, and without a clear target the employee will not know which way to aim.
3, 4, or 5 Point? The traditional measure is a 5-point scale (does not meet, needs improvement, meets, exceeds, and far exceeds). How often is the 1 (does not meet) ever truly used? That leads to the 4-point scale (needs improvement, meets, exceeds, and far exceeds), and the next question…what is the difference between “really good” and “really really good”? This all leads to the optimal solution, a 3-point scale. Either the employee exceeded, met, or needs improvement. Moving to a simplified scale eases the entire process (as employees will talk with each other and compare notes!). If a 3-point scale is used, there is one cautionary note…make sure you communicate both the scale and set expectations up-front. Generally, in a normal environment, 10-15% will need improvement, 20-25% will exceed, leaving the vast majority of the population (60-70%) meeting expectations. While this is consistently the case, 90% of the population, when surveyed, will undoubtedly say they exceed.
Expectations This ties all the other components together, setting expectations. As previously mentioned, performance reviews should not be a surprise, in any fashion, but rather should be a formal check-in. The employee should, based on previous and regular communication, know what to expect (and why!). There should always be something positive in the write-up, even if it is a needs improvement rating. Without at least some positive remarks, there will be total dissention, frustration, demoralization, and anger…which is the wrong out-come of any performance review.
Disclaimer: The materials contained in this paper are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.