Many small businesses make the mistake of thinking that there is no need for them to implement the same kind of practices as large businesses. From team building to corporate functions and goal-setting meetings to employee evaluations, small businesses have the tendency to believe that since they don’t have a large workforce, these practices don’t fit in with their small business culture.
Contrary to popular belief, regular employee review is a fantastic HR management tool for small business managers. As a small business, your goal should be to put together a team of employees who are dedicated and exceptional overachievers. If you think about it, every single staff members contributions are a lot more important at a small company in comparison to a large one. These are the people that are integral to the company’s success and growth.
What to know about employee evaluations
Employee evaluations are a great way to improve employee performance and efficiency while still keeping employee self-esteem intact and turnover low. Here’s the main things that an employee review should accomplish:
It’s important that you always be consistent with the evaluations. All employees should be treated the same in terms of leave, pay, sick days, discipline, and other employment issues despite any personal connection that you may have with one or few of them or what you know about their personal lives. All employee evaluations should be structured in the same manner and address the same issues - except, of course, they should be personalized for each employee. But no preferential treatment should be give to any employee. Check out Mark the Job if you want some guidance in setting up self-evaluations that can be used during the employee evaluation process.
Employee evaluations at a small company help to build a business that is destined for success when it grows and takes on new employees. If all these processes are already in place as a small business, it makes expanding a business that much easier. When you take on new employees important formalities and procedures are already there which makes expansion that much easier.
How small companies benefit from employee evaluations
Employee evaluations are a great way to create a culture of open communication within a company. They have proven to be a major advantage for small businesses for multiple reasons. For starters, they can help to identify the strongest employees in the company - this can be very important for overall growth. They also help to develop a personal relationship between employees and their superiors. Another big benefit is that it’s a great way to create a successful business development plan that can help you to achieve long-term business objectives and goals.
Let’s look at a few other reasons why it’s beneficial for small businesses to conduct employee evaluations.
Good employees are hard to find and even harder to retain
Keeping people who are focused and motivated is key if you want to keep moving forward as a business. If you don’t give your employees regular feedback on their performance, they won’t know where they stand and you won’t know who is meeting and exceeding expectations. If you don’t give frequent feedback, there’s always the risk that your employees will be left feeling demotivated and unappreciated.
Avoiding the issue can become the issue
As a small business, you may be tempted to let performance problems slide. Nobody likes confrontation and having to address problems directly with an individual. However, it’s absolutely necessary, especially in small businesses, because you are trying to grow and succeed with your business. It’s no good having a casual conversation in the breakroom and leaving it at that. You need to set up a formal face-to-face meeting and discuss the issue thoroughly.
The thing with employee evaluations is that they give you the chance to do this. If an employee knows what their goals and objectives are and aren’t performing up to standard you need to address it in the review. If you don’t, the problem will only get worse and correction methods become more difficult, not to mention more awkward. At the end of the day, one of the advantages of working for a small company is the company culture - having a personal and open relationship between employees and managers. Be firm and understanding and always document the meetings in writing.
You can design a system that fits your needs and style
Formal employee evaluations have a bad undertone for being rigid, overly focused on rankings, and creating unnecessary paperwork. The great thing about the modern employee evaluations is that it can be designed to be anything that your business needs and wants it to be. If you want to reduce or eliminate paperwork, you can. If you want to have evaluations only once a year or at least three times a year, you can. If you want to set up one-on-one meetings monthly or quarterly, you can. In other words, you can make the process fit your business style.
One of the toughest things about being a new manager is giving a performance review. After all, with great power comes great responsibility. In your first role as manager, you will be thankful for a few tried and tested tactics to set you on the path to a successful performance review with your employees.
The role of manager implies managing people. In theory it sounds easy enough, but in reality “the managing people” part is what most new managers struggle with the most. The truth is, your team can make or break your success. One of the most essential tools for building a strong relationship with your team is a performance review meeting.
While you are likely to be tempted to prepare for the review no longer than a week before, you probably know that you shouldn’t. A performance review should be treated as a year-long process and involves continuous action and thought throughout the annum. Below we will give you a basic guide on the process to follow for a successful performance review.
We will be working on a 12 month basis and consider January to be the start of the year and December to be the end.
January - Set goals and expectations
First things first, it’s very important to have an initial meeting with your team and establish what the goals and expectations are for the year ahead. It’s also a good idea to meet with them on an individual basis to set personal goals.
The recommended process of settings goals is by using the SMART method which you may already be a familiar with; Specific, Measurable, Achievable, Results-orientated, Time-bound goals. These individual goals should be specific to each person but also align with the team and overall company goals.
March, June, September - Hold touch-base meetings
Every three months, or monthly if you prefer, you should hold meetings to discuss progress with your employees. It’s important to constantly track performance and provide feedback throughout the year. You don’t want to get to the final performance review at the end of the year and not have addressed certain issues.
You should schedule these meetings at the start of the year to ensure that they do actually take place. Prepare a very brief agenda for each meeting where you can discuss goals, expectations and any issues or questions that the employee may have. This informal feedback should be given to each person. This is also a chance for you to give praise, or address issues, if there are any. It won’t be easy but it is absolutely necessary. Again, you can’t expect a successful final performance review if there are ongoing issues that have not yet been addressed.
Take notes from each meeting - what you discussed and what the outcome was. This will be very useful at the end of the year.
October - Ask your employees to prep
Two months before the final review, set the date for the official meeting with each of your employees. This is also your chance to ask them to put together a report on their yearly results. Think about any official forms to be completed, ask them to compile a summary of their job description, what projects they are currently working on, and to give a rundown of goals and achievements.
Another effective tactic is to ask employees to complete a self-evaluation. This can make your employees feel like they have a say in the process, but it can also provoke them to take a hard and steady look at their work behavior. This can make a big difference when discussing their performance. Some of the best self-evaluations consist of a few open-ended questions, like what were your challenges throughout the year? What are your biggest achievements? Where could you show improvement? If you want some inspiration or assistance regarding be sure to check out Mark the Job. They offer some great tips and tactics when it comes to completing evaluation forms.
November - Prep yourself as a manager
It’s very important that you do your own preparation for the final performance review. You don’t want to go in there underprepared and not looking interested. Think about gathering both quantitative and qualitative forms of employee performance. Quantitative would include things like deadline reports and call records. Qualitative, on the other hand, includes gathering customer feedback or your personal evaluation. This is where those notes you took earlier on in the year will really come in handy.
December - Prepare your documentation
A few weeks before the review you need to compile all the collected information together. This includes the employees’ self evaluation forms, outside feedback, and any other relevant information that you can think of. This is the data that you can use to compile evaluation sheets, make points for discussion, and give written explanations regarding your feedback.
This is also the time to think about how you want to structure the review process. You need to figure it all out now so that you are absolutely ready when the day of review arrives. For example, a good idea is to structure the review around the goals that were set at the beginning of the year. But there are other directions that you could take as well. Just ensure that you use a process that is comprehensive and your employees will be able to easily follow along.
End of December - Final review
Now, for the most important and probably intimidating part. However, the good news is that if you have followed all of the above steps, you really shouldn’t struggle here. It’s essentially just a matter of compiling all of the above into one final meeting. Of course, it involves a lot of detail and effort, but it should all come together like a good book.
The terms performance appraisal and performance management are typically used interchangeably. In reality, however, while they do have some similarities, they certainly aren’t the same. Understanding how these two concepts are different, but also relate to each other is a key learning factor for the HR and talent management professionals of today.
Performance management consists of the following steps; identify, measure, manage and develop. This process is followed for the overall performance of the employees in a business. Performance appraisal, on other hand, is the ongoing process of evaluating the employees performance. Performance management is an ongoing process, while performance appraisals works on an annual system - taking place sadly just once or twice a year.
Key differences between performance appraisals and performance management
Performance management is a joint process by employees and their line managers, and sometimes other stakeholders also play a part. These stakeholders consist of any party who can be helpful in impacting the employee performance. The process is customized in line with each workers actual work.
Performance appraisals, on the other hand, are a top down assessment. They are usually standard procedure and done by the HR department together with direct managers. The appraisal is dependent on the employees job description, experience, and designation.
Performance management is a process while performance appraisal is a system
Performance appraisals are an organized approach to evaluating an employee's performance. Actual performance is measured against preset standards. Performance appraisals are documented, and thereafter employees will be provided with a review on their performance during the past year. The review will also indicate where improvement may be necessary.
Performance management, on the other hand, is an ongoing process with a goal of planning, monitoring, and evaluating a workers objectives and their total contribution to an organization. The end goal is to improve and encourage the effectiveness and efficiency of employees.
While a performance review has structure, it still allows for customization of the key performance areas, which will vary from person to person. But, when it comes to ratings, it’s a rigid process since the ratings apply to each and every worker.
On the contrary, performance management is a fairly flexible process when it comes to performance evaluation. While there are guidelines in place that demonstrate optimal performance, they can differ from person to person depending on job description and capabilities.
If you want to know more specifics on performance appraisals and best practices, then markthejob.com is a great place to look. We offer you the tool to facilitate fair and efficient performance reviews, that are tangible and quantifiable too.
Appraisals combined with ongoing management is a winning formula
At the end of the day, it’s not performance management versus performance appraisals. It should ideally be a combination of the two. When leaders stay on top of employees’ performance by means of appraisals, regularly give feedback, and discuss issues with their team both formally and informally - that’s exceptional performance management. When combined with regular appraisals, these make for a management strategy that is beneficial to the business and its employees. If you are looking for help or general assistance with your appraisal and management system, go and check out markthejob.com !
It’s no secret that most employees don’t look forward to their annual employee performance reviews. In the HR community, the topic of employee performance reviews and how effective they are is up for much discussion. Some claim that it’s an efficient and necessary process, but its methods need to be revamped, while others argue that its an out-of-date and counter-productive exercise that is essentially a waste of time.
So how effective is the review process and what impact does it have on customer experience? In an interesting twist, research suggests that there is a strong correlation between positive employee experience and exceptional customer experience. Ultimately, we are looking at whether the employee performance review has enough of an impact on the customer experience.
Employee experience indeed has a direct impact on customer experience
The best leaders in business put much time and energy into how customers experience their brand, and it’s for a good reason. It’s a well-known fact in the business world that it is significantly more expensive (not to talk about time-consuming too) to win over a new customer than it is to keep an existing customer. In today's media-hyped society, one negative review or social media post could create substantial damage to any business. However, on the other side of the coin, a few positive reviews could help companies to excel and to stand out.
Positive and negative brand experiences come from the interactions that customers have with employees. If employees are unhappy, they aren’t motivated to do a good job, and the customer experience will most likely be affected. While in the ideal world, creating a culture in which employees are committed to providing the best possible customer service is the ultimate goal, this will only work if the employees have a positive employee experience.
Ultimately, employee experience could make or break your business. In practice, the best way to increase brand loyalty and attract customers is by using the brand ambassadors that already work at your company.
What do regular employee performance reviews have to do with the employee experience?
The employees of today want frequent and meaningful feedback. Businesses are operating at a pace that requires employees to be aware of changes before, during and after they’ve taken place. It’s only through pertinent feedback that employees can modify their priority tasks, work processes, and skills to ensure that they are aligned with the business objectives and strategies.
This is where regular performance reviews come into play. The employees of today want to find meaning in their work, expect frequent feedback, and they want recognition for their excellent work. More and more business leaders start to realise this, and many of them report, that regular performance feedback performance sessions drive higher performance. Research has shown that employees who have managers that seem to care about them as a person are more engaged and committed to the business. By providing frequent feedback employees know where they stand, can discuss issues or concerns with their managers promptly, and they are always being inspired to do better work.
Frequent employee feedback sessions and customer experience
Ultimately what businesses want is employees who are motivated and inspired. This passion is what leads to exceptional customer experience. But, as we mentioned earlier, only those employees who have a positive experience within an organisation, are likely to care about the customers.
In line with the changing attitudes in the workplace, many agree that employees, especially millennials prefer frequent feedback rather than one, in-depth annual review. This change is linked to their growing preference of “people managers” who orchestrate catch-ups regularly and with empathy. They want managers who care about them and know how to show it. This demonstrates to them that they are of value to an organisation and that their work there is useful and appreciated.
Frequent conversations with employees can empower them to do their best work, and this leads to excellent customer experience. Think of it this way, rather than only addressing concerns and opportunities for growth once a year, conversations can be had monthly or quarterly. This ensures employees hit their goal more frequently, and more efficiently. Ultimately this results in better customer service.
Performance reviews play a big role in the success of any business, whether big or small. They make up a crucial aspect of the employee experience. It’s a way for employers to evaluate how an employee is performing in their role and gives them the opportunity to give feedback. Performance reviews are also an excellent opportunity to nurture and develop the employee-employer relationship and improve communication levels.
However, for many employees performance reviews are a very much dreaded process. Nobody likes having their weaknesses pointed out and there’s often a negative stigma attached to performance reviews. But it doesn’t have to be this way. And ultimately it’s something that’s going to take place whether you like it or not, so you might as well embrace it. One of the most important things you can do to ensure success when it comes to your performance review is to actively prepare for it.
Let’s take a look at what you can do to prepare for your performance review.
First and foremost we need to mention self-evaluation because it’s quite possibly the most important aspect when it comes to performance reviews. You don’t need to play a passive role and simply sit back and listen to the feedback and direction given by your manager. If you properly prepare for your performance review with your manager, you can ensure that they have a broader picture of what your performance and career goals are, encourage communication, and take charge of your career progression.
Ideally you would use the same performance appraisal form that your manager will be using. Another good option for self-evaluation is to use markthejob.com. They enable both managers and employees to create rational and effective performance reviews via their website. Go through each goal and competency that is listed and give yourself a rating. It’s important to be brutally honest with yourself. The goal is not to achieve good ratings but rather share your perception of your performance with your manager before the scheduled performance review meeting. This will help your manager to prepare for the review and flag any differences the two of you might have in terms of perception of performance prior to the meeting. Alternatively you can just bring your self-evaluation with your to the meeting and use it as reference.
As part of your self-evaluation you can list accomplishments and details from journal notes. If you’ve kept a journal of your performance over the year you can include things like; challenging people or situations, specific strengths, projects you really enjoyed, and skills that you may need to develop. If you didn’t keep a journal, you should start asap. Recording your activities, challenges, and achievements will really help you in the long-run.
Put together a list of areas that need development
As an employee it’s important to think about ways that you can improve your work. In reviewing your job description, competencies, career goals, accomplishments, etc, you can identify the areas that you may have struggled in, or perhaps where others have pointed out you have struggled. But it’s not just about what you didn’t get right, it’s also about areas that you want to expand your knowledge or skills in so that you can progress in your career.
Be honest with your manager about what you struggle with and ask for training or mentoring in areas that you want to develop or improve on. If possible do a little research beforehand about training courses and activities available through your company. If you find something that looks promising and you feel would be beneficial to your performance, tell your manager that you would like to join a particular course.
Set goals for the upcoming period
Every performance review gives you the opportunity to progress in your career. Setting goals gives you the opportunity to design your future. Don’t wait for your manager to tell you what your goals should be. Take a proactive approach and put together some goals based on your job description, your skills and experience, and, of course, your career aspirations.
Make sure to set well-defined goals that are realistic but would still be considered to be major accomplishments if you achieve them. A common acronym used by both managers and employees to set goals is S.M.A.R.T. This stands for goals that are Specific, Measurable, Achievable, Realistic, and Time-based. This process can help you to set goals that are both relevant and attainable.
Keep an open mind
Very often employees come to performance reviews feeling very defensive, expecting their managers to be critical, having only negative feedback to give. The problem is that when we defensive we don’t listen very well. It’s important that you prepare yourself for your performance review by trying to relax and letting go of any defensiveness you may have. You should always try to listen carefully to the feedback your manager provides, along with the goals and development plans that have been laid out for you.
One of the major employment trends in the United States, Canada, and Europe is the practice of anonymous job applications. This process first began in many countries in the European Union and following its success has since expanded to other nations. The ultimate goal is to make way for bias-free hiring by means of anonymity.
While the actual impact of anonymous job applications is not yet known, the idea of this process has been supported both in theory and in practice. It’s a well-known fact that both gender and ethnicity have an influence on the hiring process all around the world. This is despite the fact that current legislation considers this to be discrimination. Anonymous job applications are seen as a way to combat this discrimination.
Employers and anonymous job applications
We all have subconscious biases whether we realize it or not. And it’s no different when it comes to employers and recruitment teams. Consequently anonymous job applications are a logical next step for employers. Research has shown that personal information like name, gender, and country of origin can prevent employers from looking at an application objectively and may even prevent them from going through the rest of the application.
The practice of anonymous job applications is not a risk for businesses. In fact, it can be quite the opposite. They still have the chance to meet the applicant in an interview and they are more likely to choose a qualified candidate by eliminating undue distractions through the screening process.
Ratna Omidvar is the president of a Canadian nonprofit organization, Maytree Foundation, and he suggests the following practices during the screening process when searching for candidates:
Obviously these practices are not perfect since applicants will eventually meet the employer either in person or via video. But the idea is that prejudice during the screening process will be eliminated which is a step in the right direction.
Employees and anonymous job applications
There are plenty of advantages when it comes to employees using the anonymous job application process. But perhaps the most significant is for those who are currently employed and searching for a new job. Loyalty and discretion would drive those who already have a job to apply anonymously. An anonymous job search is the safest way to change jobs without the current employer getting wind of what is going on. If you have justifiable reasons for concealing your identity it isn’t considered misleading.
If you want to apply for a job anonymously you can use a few sentences in your cover letter to explain that you are currently employed and wish to have your details concealed to avoid any conflict with your current employer. Alternatively you can provide your details but request that the recruiter to help maintain your anonymity.
Equal opportunities for women and minorities
Possibly the greatest positive effect of anonymous job applications is to give women and minorities equal opportunities to enter the workforce. It’s a way to help employers to overcome any subconscious bias and ultimately find the most qualified person for a specific position without any prejudice. Believe it or not, anonymous applications gives these groups a better chance at being selected for an interview.
Things to consider when applying for a job anonymously
If you are following the anonymous job application process then you need to keep a few things in mind. At the end of the day you want to ensure that you cover all the basis for remaining anonymous.
Your CV can give away more information than you intend if you aren’t cautious. Carefully go through your work history and eliminate any information about previous work experience or employers that could disclose who you are. When you are describing your work history and industry you can use “confidential.” Also remember to leave out the city and town of each employer if you want to remain completely anonymous.
Again, be sure to use the “confidential” tag when you are describing the schools, colleges, or university that you attended. These can be a dead giveaway as to your identity, particularly if you are well-known in your professional network as having gone to certain schools. You can exclude graduation dates as well, but you will need to add certification dates so employers know how current they are.
An effective way to protect your identity is to limit the information that you provide on your cover letter header. This means leaving our your full name, email address, and mailing address if they contain your name or any other information that could identify who you are, like birth date. You can create an alternative email address that looks somewhat professional. For example; email@example.com. It’s not ideal, but it’s your best bet if you trying to remain completely anonymous.
Growing a small business isn’t an easy task. But, learning how to grow your business isn’t just a notable goal, it’s often a necessity for your business’s survival and economic well-being. Almost all companies strive for growth, regardless of size. Small companies want to get big, and big companies want to get bigger. In reality, all companies have to grow at least a little every year to keep up with increased expenses that occur over time.
Growing from a start-up to a small company to a middle size organization requires businesses to adjust to growing needs and implement new strategies and tasks. Let’s look at the key factors of growing a business.
Understanding your customers
The customer is at the heart and soul of any successful organization. Understanding the customer needs and developing products and services that meet those needs is the key to success. As a start-up company, your focus should be on building good relationships with your customers and gaining insights by encouraging them to provide valuable feedback.
As your business grows, you should never lose sight of the customer. In modern business, customer success stories are gold. While traditional organizations are focused on sales, modern, SAAS-based businesses see the importance of shorter-term contracts and faster renewals. In other words, it’s more about keeping existing customers rather than finding new ones.
Knowing what makes people renew is at the core of success. This is commonly known as the customer success story. When trying to grow from a small to medium-sized business, you shouldn’t just explore the factors that close a deal but focus on the areas that make your customers experience successful and keep them coming back for more.
When you start a business it’s likely just you and maybe one or two other founders. In the beginning, you should essentially just keep a good relationship with your customer, while doing a brilliant job at what you do. But, as your business grows, you will need to employ people to help you out. You might want to do everything yourself, but in reality, this can do more harm than good to your business. Building an adequate and capable team is essential to growing your organization.
Of course, hiring employees leads to a whole other set of tasks and responsibilities - you will need to manage these employees. One of the best ways to ensure motivated employees who work hard is to give them a sense of purpose. Often, finding intelligent and talented employees isn’t a problem but making them stay is a challenging task.
Implementing things such as a paid vacation policy, training and development programmes, as well as employee recognition and reward programmes can go a long way in retaining valuable employees.
Another important task that comes with hiring employees is implementing a performance review process. Performance reviews measure an employee's performance and ultimately the projected success of a company. When you first start out and have only one or two employees, the performance review will probably be very informal - a brief discussion over coffee or a pint. You are likely in constant contact with your employees and talk daily anyway. However, as you continue to grow and your team consists of five or more people, you will be preoccupied with other tasks, and communication tends to become less frequent and less personal. At this stage, you will need to implement a formal performance review process.
Creating an employee handbook
The majority of start-ups and small businesses don’t pay attention to HR, but the fact is, Human Resource Management can take your business to new heights. In a start-up business, as mentioned above, communication is flowing, and you should have a very personal relationship with those who work for you. However, as your business and team grow, it’s necessary to implement rules and regulations for employees. Employee handbooks serve as a blueprint for building an enduring workforce and is the best way to ensure that your employees are fully informed about what is expected from them.
Here are some of the important points to include in an employee handbook:
The lowdown on growing a business
Small business owners who are looking to grow their business - whether it’s dramatic or incremental growth - must be prepared to deal with the upside and downside of growth. When the business is small, you will find it easy to direct and monitor the various aspects of daily business. In these environments, as the business owner, you will have a good relationship and open communication with employees, customer, and suppliers. However, organizational growth means that you will be less “hands-on” and need to entrust various tasks in those who work for you. As small businesses grow, so do the complexities of managing the organization. But if handled correctly, these complexities can be reduced by delegating responsibility to your team.
Have you ever thought about why organizations conduct employee performance evaluations? Perhaps you’ve wondered what the point is? Maybe you’ve even considered it to be a waste of time? But, the reality is quite the opposite. Employee performance evaluations are used as an evaluation process and a communication tool that is of utter importance to an organization's success.
At the core of an organization's success are its employees and their capability. Of course, you need to recruit adequate people and give them the training and tools that are necessary to do their job. To ensure that staff is performing and meeting expectations, managers and supervisors need to conduct regular performance evaluations; measuring efficiency, work production, and attitude of employees.
The general consensus on employee performance evaluation
Conventionally speaking, performance reviews are disliked by both managers and employees. Managers don’t like feeling as though they are judging their employees - especially if they have to address underperformance which they know could result in the risk of alienating the employee. On the other hand, employees don’t like the feeling of being judged. For the most part, they tend to take any kind of suggestion for improvement negatively and personally.
This is where employee performance evaluation of the 21st century comes in. If conducted with care and understanding, this process should help employees to see how their job and expected performance fit in with the bigger picture of the organization. Documenting performance evaluations ensures that both the manager and employee are clear about each employees job requirements; setting specific goals (we will discuss this a little later).
Training and developing needs
One of the key factors of an employee performance evaluation is to determine the training and development needs of staff. If an employee is struggling with a specific task or responsibility, they could benefit from a training programme. According to online employment resources, ignoring skill deficiencies can affect an organization's attainment of goals.
When an organization shows interest in helping employees to do their best and invests time and effort into their development, it doesn’t just contribute to the company morale; it also elevates the employee’s self-esteem. An employee that feels valued is more motivated and committed to an organization.
Although the primary goal of an employee performance evaluation is to determine if an employee is a good fit for a company, it also serves the purpose of helping individuals to determine if they have chosen the right career path. Perhaps after the evaluation, you will realize that your employee will be better suited in a different role. You can then implement the necessary steps and processes to get them there. The feedback that an employee receives is invaluable in determining a future course in which the organization and employee can put their interests and talents to the best use.
Set SMART goals
Setting goals is an important part of any employee performance evaluation process. A general guideline used is the SMART goal concept. SMART goals stand for specific, measurable, achievable, relevant, and timely, and is a way for employees to effectively formulate and achieve set goals.
An example of a SMART goal
We can assume that the goal is achievable because the employee should have access to the resources required, such as relevant books and internet connection.
Employee performance evaluations are one of the most crucial factors contributing to business success. However, it’s an often stressful situation for those in charge, who have to monitor and keep track of progress, and give accurate feedback without having a negative impact on employee morale. The truth is, both managers and employees often dread performance evaluations. Managers are reluctant to give critical feedback and find the preparation time-consuming, while employees might feel like they are back at school being graded.
But, this is not the way it should be. Properly handled performance evaluations are important for managing the performance of employees, as well as increasing their job satisfaction and commitment to the business. Companies should implement frequent performance evaluations to ensure that company morale is high and that employees are successfully doing their jobs; while also ensuring that employees are given space to grow and improve which will benefit themselves and the company.
Although the methods and approaches used for performance evaluations differ from organization to organization, there are some universal principles when it comes to talking to employees about their performance. Here are some of the top tips for those conducting performance evaluations.
The fairness factor
Fairness is at the heart of improving an employees work experience. When an employee believes that the outcome of their evaluation is connected to how well they performed, they are more likely to consider the evaluation to be fair. Research has suggested that one of the best ways to demonstrate fairness in an evaluation is by comparing an employee’s current performance to past performance; giving feedback on how much the employee has, or hasn’t, made progress over time. This is known as temporal comparison evaluations.
When employees are compared to colleagues (social comparison evaluations), their perception of fairness decreases. They believe that managers fail to account for specific details on their performance and thus deem the evaluation as less accurate. On the contrary; when they are compared only to themselves, employees feel that the evaluation is more individualized since the manager incorporates specific information about them. This makes them feel like they have been treated in a more respectful way.
Give constructive feedback throughout the year
It’s important that performance evaluations are periodic and structured. Have you heard of the saying; what is not asked, never gets done? Well, this couldn’t be truer when it comes to performance evaluations. If managers don’t give feedback, employees get the impression that they don’t care about the work.
Goals need to be set, and they need to be tracked. Tracking goals at all levels ensure that the businesses goals are achieved. This shows the employee that the organization has interest and is committed to achieving their goals. During the evaluation, the feedback should be objective and factual, and there should be dedicated time assigned for the discussion.
Share the performance review process
It’s important that the employee understands how the organization will assess their performance. This will give them insight into what’s expected of them and won’t leave them surprised at the end of the review. Some organizations use critical incident reports - document positive and negative occurrences over the performance review time - and ask the employee to do the same thing. Then at the time of review, you can take a comprehensive look at performance together with the employee and compare the incidents that they have documented.
If employees are well prepared for the evaluation, they are more likely to present data of value to the table. You should never go into a review without preparing for the discussion with the employee. If you aren’t prepared the performance evaluation will fail - you are likely to miss key opportunities for feedback and improvement, and this will leave the employee feeling demotivated about their success.
Conversation is key
Employees need to feel like they can have open and honest conversations with their managers. If you genuinely want to help your employees to improve, and the two of you have a positive relationship, the conversation will be a lot easier and more effective. It can’t just be you doing all the talking in the evaluation - then it becomes a lecture. Employees need to feel like their managers care and have an interest in their success. Ultimately, you want employees who are excited about their potential to grow, develop, and contribute to the organization.
Don’t only give negative feedback
There is always room for improvement, but if you only focus on the negative, your employees will be left feeling unappreciated. In fact, generally, you should spend more time discussing the positive aspects of performance. This will leave employees feeling motivated and appreciated. Having said that, don’t neglect to discuss the areas that need improvement. This is especially true for underperforming employees. The point is, you need to find a balance. When addressing negative feedback, also be sure to mention what the employee does well.
Performance evaluations are the key component to measuring an employee's performance in each and every organization and essentially reflect on the success of the organization. If done correctly, evaluations can boost employee engagement and productivity, which will work in favor of the organization.
The performance review process is an essential part of every organization. It’s a useful management tool that helps to give feedback, review and estimate whether an employee's performance is effective, and to discuss areas of improvement going forward. Performance reviews benefit both managers and employees and provide useful information for the company and its people, that can’t be acquired from any other source.
A well-defined performance review process that is built on consistent, constructive feedback will help your company to retain and develop top-class employees. Here are six ways that performance reviews can have a positive impact on your business.
Make your people feel valued
Many employees like to know where they stand in terms of job performance and what else they can do to help the company move forward. Performance reviews clarify the employees’ role and status within a company. People typically need to feel valued and know that they are producing good work - this will motivate them to work smarter and harder.
Celebrating a job well done is the easiest part of a performance review. If your employees receive frequent praise and recognition, you are on the right track to retaining hard-working staff. Remember that amazing employees are hard to find which is why developing your people is so important - and that’s what performance reviews are all about. Even in the smallest start-ups, employees want to know how they are doing. It can be a challenge to give constant feedback, and a formal review can be exactly what employees need to stay on track and bring up questions that they might not be comfortable asking in casual chat.
To improve communication
The main purpose of a performance review is to open up the conversation between employees and their managers. Some problems that arise from a lack of communication can often be solved by a performance review. If you use the review process as an opportunity to describe the criteria that are used to assess performance, the employee will gain a better understanding of the best way to perform their job.
Communication is something that is often lacking. Encouraging discussion can have a positive long-term impact on the manager-employee relationship. Your employees need to feel like they can come to you if they have any problems. If you don’t keep communication channels open, you will lose a lot of control. Therefore communication is key in running a successful business.
Set new goals
A performance review is a perfect opportunity to establish what your employees personal and career goals are, and to set a long-term plan to achieve them. Self-development is the most important benefit for the employee. Employees who are driven and enthusiastic in achieving their goals are of greater value to an organization. Setting goals helps to motivate employees and lets them know that the company supports them.
Those employees who want to grow within an organization are invaluable, and measures should be taken to keep them motivated. Using the performance review to talk big-picture, set goals, and get your staff excited about their work, will have a long-term positive impact on the success of your business.
Training and development
A performance review is one of the best opportunities for an employee and their manager to identify and agree on areas of improvement. During the discussion of an employee's performance, the absence of specific work skills can be discussed, and arrangements can be made to work on developing these skills.
The performance review can be a way to make the need for training more apparent by connecting it to performance outcomes and future career aspirations. Training and development is a key element in building a successful business. You want employees that are continuously growing and developing their skills.
They keep rewards fair and transparent
Allocating pay increases, bonuses, and promotions can be a very challenging task, especially when trying to keep all employees happy. Naturally, they all want to be compensated for their “hard work,” and if one employee receives something that another doesn’t, they will want to know in extreme detail why.
Implementing bonuses and promotions into the performance review can make the whole process a lot easier. Many organizations have found that simply communicating and giving feedback to employees ensures that rewards remain objective.
Lastly, performance reviews are a great way to keep track of progress. Comparing an employee's capabilities from one period to another will provide the employee and company with measurable marks of improvement, as well as lack of improvement, or even regression in work performance. By charting progress, you can identify what’s working, what isn’t working, and what needs more work.
Remember that performance reviews are only as good as the management team that conducts them. Those companies that are only doing performance reviews for the sake of it are wasting their time. But those that use them to implement business goals are on the right path to accomplishing those goals and essentially their strategic plan.