Ask any manager and they will tell you that employee reviews are hard to do. And the smaller the company or department, the more difficult they are! In fact, some might prefer to do cold calling instead of employee reviews! Here are a few tips to help you have strong and effective employee reviews that build your business without destroying employee / employer relations.
Objective Not Subjective: Make sure that your reviews are based on objective measurables and not subjective observations or feelings. For example, be sure to measure their performance based on specific numbers (such as percent-of-company- sales or dollars-per-sale or profit-margin-per-sale or any other type of specific measurable) instead of on something you feel (such as “I think you’re not aggressively asking for the order on the phone”). It’s much easier for you to set goals and to back up your opinion if you can point to a number that was previously agreed on and say “look, you reached this one but you didn’t reach this one.”
Don’t punish failures or discipline. Employee reviews are not the place to punish failures. If a person didn’t reach their goals, they may not get a boost in their commission but not getting a pay increase is not a punishment, it’s a natural consequence of failing to meet their goals. A punishment is something that would set them back from where they are. Reviews are not the place to punish “misbehavior” (such as doing a poor job or lateness). These things need to be addressed AT THE TIME of the incident and shouldn’t be saved up until the review. If an employee is consistently late, for example, that should be addressed at each lateness in an appropriate way (which could include such things as a reprimand, being “written up”, a reduction in the day’s wage- whatever is legal in your jurisdiction).
Reward success during the review process. When employees reach their goal measurables, they should receive some kind of bonus. Many companies use additional monetary perks like increased commission or increased salary – which is appropriate – but you may want to consider alternatives like gift cards, additional time off, a promotion, etc. Rewards should be appropriately tied to measurables and they shouldn’t be arbitrarily decided by you the night before the review, but something developed in a company wide policy. (This will avoid difficulties if one employee received a substantial raise while another employee received a gift card- with few distinctions between their performance).
Get the employee involved in the process. Some companies that use a pre-developed employee review chart will give one copy to the employee a week before the review and have them fill out their own review and submit it prior to the meeting. Often, self-reviewing employees will be harsher on themselves than you would be on them and any disparity between your review and theirs is a great place to open the door to a discussion that will get them on board.
Finish with a plan of action and new goals. Employee reviews that end with “well, that was how you did this year” are failures- plain and simple. A good review should never end looking back but should always end looking forward to the next year. Involve the employee in creating a plan of action and setting new goals to be reviewed on.