We are rapidly approaching the end of the year, and for many businesses, it is time for the dreaded employee reviews. When executed thoughtfully, employee reviews can be an important part of team building, generating trust and maintaining happy employees.
Why we don’t like the traditional employee reviews.
1. Reviews are stressful. The employees are uncomfortable, because often their bonus and pay raises are part of the discussion during the review. To paraphrase one Canadian businessman of our Executive peer group “I just don’t like telling people all the things they are doing wrong.” In this tight labor market, many managers are concerned how the employees will react to any perceived negative feedback. The traditional method seems so negative.
2. Time. A thoughtfully executed review takes time, and time is always in short supply with owners and managers alike.
3. It is hard to review family in the business. There are misconceptions that businesses with family employees do not need this structure, because “We are family, and we know what everyone is thinking.”
4. Reviews are only for large corporate type operations. Many would contend that having every employee fully engaged in their job is even more crucial in a small company.
Why you need employee reviews.
1. Your employees cost you a lot of money in wages, benefits and perks. You spend time maximizing your return on investment (ROI) in other areas of your business, why not your employees?
2. Good employees are hard to find and hard to keep. Use the review as a time to give feedback and also get feedback from the employee. Find out if they are satisfied with their work, what their goals are and most importantly, how they gauge your management. Does getting feedback make you uncomfortable?
3. Most employees will not ask for feedback, but good employees crave feedback. Gallup, the survey company, has measured employee satisfaction for many years and has found that 65% of employees would like more feedback while 58% of managers feel they give enough feedback. These point to an obvious perception gap.
4. Help your employees and build trust at the same time. If your employees sincerely feel you have their best interests at heart, they will be open to your feedback. Your employees will appreciate the fact you are sincerely trying to help them become better at their job.
5. Show the employee where they fit into the Strategic Plan. Employees want to know where they fit into the organization and what steps they will need to take to become more valuable. Find out what motivates and demotivates them. What do they like about their work (and their managers) and what don’t they like You want to retain good employees, so find out what will help them stay and stay happy.
6. Your competitors are more than likely conducting reviews in order to get ahead. More the reason you should be as well.
Tips for highly effective and low-stress employee reviews.
Ask permission and set expectations. Whenever I mention this item to managers and business owners, I get odd looks like I may be getting soft in the head. Since when does a manager have to ask permission to have a candid conversation? I do not understand the psychology behind the topic, but essentially, if you ask permission to have an open and candid conversation, the odds of having your comments take root are higher than if you were to jump directly into the discussion. Consider saying something like: “It is important that you and I get the most benefit from our visit today. I would like you to be open and candid as we talk. I will be open and candid as well.” This simple sentence really diffuses the tension and helps set the tone. Let the employee know that the purpose of the meeting is to not only give feedback but receive feedback as well.
P.C.P. The review is not only about what the employee did wrong, but also about what you feel the employee did well. By talking about the good attributes of the employee, you will get more effort on those good attributes. PCP stands for Praise, Constructive, Praise, which is how the meeting is structured. Talk about the good the employee has done and how it positively affects the company, customers and workplace. Then give a constructive critique of areas they could improve on. Follow that up with more praise and a discussion on how they can move up in the company when weak areas are ironed out. Always end with giving praise.
Be specific. Give examples of the good jobs they have done, and give examples of when their job was not up to par. Being specific is hard, because often these points are not jotted down throughout the year. However, if you are able to jot these points down, the review becomes very easy and specific. When praise and criticism is very specific it takes on more meaning and it lets the employee know you are aware of what they are accomplishing. Do not tell someone they are doing a “Good Job.” A good job can mean different things to different people. Get added traction out of your compliment by telling the employee WHY you felt the job was good and HOW their good job affects the rest of the company. Many employees don’t understand how their actions affect people and business operations around them. This simple tactic will help employees see themselves as an important part of the company.
Keep it to 3. Too much information delivered during a review tends to shut down comprehension and communication. Stick to only three of the most important areas where they have excelled or deserve praise, and three areas where they could show some improvement. Most employees can focus effectively on 3 items but will have a hard time with a long list of 12 areas of improvement.
Don’t talk about money. If you want to get honest feedback from your review, then make it clear upfront that the review isn’t about salary or bonuses. When there is money on the line, many employees will become less objective during their self-evaluation and try to sell you on why they deserve a bonus or raise. I have found it is best to have a discussion about bonuses and salaries several weeks before the evaluation. This helps keep the focus on performance, goals and employee improvement.
One at a time. Whether the topic is praise or criticism, cover only one topic at a time. Ask the employee for their feedback on any comments you have made before moving on. If there is praise, ask the employee what can be done to make them even more effective. If there is criticism, ask the employee what they believe the best plan for correction should be. If the plan of action sounds reasonable, then let the employee run with it. They will try harder proving their plan of action is better than yours anyhow. Just agree that if their plan of action doesn’t work, then you will come up with the next plan to correct the problem.
Have a two-way dialog, not a sermon. One way of the best ways to conduct an easier employee review is to let them do most of the talking! This is at the heart of my 4 Question Employee Review System. It requires the employee to reflect and rate their own performance. By having the employee rate themselves first, you gain a clearer understanding of how close your assessment is to their own. If you have an employee that consistently rates themselves high in all areas, but you feel otherwise, this is a sign everyone is not singing from the same book. If there is a large gap between their assessment and your own, another conversation about job expectations may be in order. Self-assessments require a high degree of trust by both parties, and not every employee will naturally have the level of trust to be candid about themselves. If you genuinely want to help them improve and aren’t just venting your frustrations, the two way conversation is very effective. Note: new employees may have a more difficult time rating themselves because they are still learning the ropes. Don’t expect as much feedback from them.
Let it sink in. After the review is complete, let the employee know you will follow up in a week to answer any questions. If the employee is surprised by anything that was discussed during the review, a little time can go a long ways in helping them formulate a response or plan of action. Following up in a week is especially important if you ask the employee to come up with a plan to correct a deficiency.
Done is better than perfect. Getting a review done on a timely basis is better than a spit shined process that is cumbersome to use. If your process isn’t perfect, don’t sweat it, just make a note and improve on it next time. There are several corollaries, such as “More is better” and “Informal is often better than formal.” While not every company can have multiple employee reviews throughout the year, it is crucial that employees receive SOME feedback. Placing the feedback closer to when the action occurred usually carries more weight than feedback from an event that is twelve months old. If there is something that is crucial, do not wait to give the feedback. Letting a problem fester for months until the next review is a sure way to increase tension and ill will.
Employee reviews sometimes have a bad rap, and thus many employees and employers don’t like to do them. However, most good employees crave feedback because they really care about what their manager thinks of them, and given the right feedback, many employees will give you even more than they do now. Employees cost a great deal of money and time, so spending a little bit of time to fine tune their skills can go a long way to increasing your return on investment. This process doesn’t have to be lengthy or complicated, but it does require a measure of openness and trust to get the full benefit from the process. When an employee and employer can sit down and openly discuss the good, the bad and the future, most often good things happen.
Looking for more ideas and guidance to re-energize your employee reviews? Contact me.