21 Aug

We all know that performance reviews are essential, but they may seem like a waste of time or luxury for many small businesses with limited staff. Performance reviews can be time-consuming to do well. They require managers to spend hours with their employees reviewing the past year's work and setting goals for the coming year. We can go on about the reasons to shove performance management to the back burner. 

Whether you have a small business or large corporation, you need to ensure that your employees are happy and productive in their jobs to be successful and grow. Performance reviews are one tool that's important for helping achieve that goal. In this post, we'll cover five tips for effective employee reviews and some helpful systems to make your formal performance reviews productive, memorable, and valuable. 

Do it on the regular.

 While it may seem like overkill, formal performance reviews should be a bi-annual, quarterly, or even monthly occurrence rather than an annual one. Coupled with frequent 1:1 meetings, the performance review process can provide a clear benchmark for meeting company and individual goals, and the more frequently they are conducted the faster you are able to implement feedback when needed. 

Set Specific Goals.

 One of the most critical aspects of the performance review process is defining success for both the company and the individual. It's better to spend more time upfront than at year-end to ensure that employees are on track to meet their goals and get feedback so they can change course if necessary. This will allow you to have an honest conversation where your employee feels heard, respected, and valued. 

Make sure you define performance goals on both a company and individual level and set milestones for those goals with corresponding rewards. Reviewing these goals with your staff will help them understand their role in achieving them or why their goal was not met and offer ways to change that in the future. The more specific the goals and milestones are, the better your employees will be able to understand how their actions affect company goals. 

Clear is Kind.

 It's important to be specific about what the employee is doing well. It's also important to provide constructive feedback about what the employee can improve on. When you have a performance review meeting, be sure to share specific examples of how the employee has helped the company reach its goals and how they did it well. 

When sharing feedback about areas for improvement, use specific examples to illustrate issues and walk through the course that should or could have been taken. Keep your feedback professional and focused on behavior rather than the individual but speak directly and don't couch your words. 

Discuss whether any expectations need to be revised, added, or removed, and then follow through with written documentation that reflects your discussion, including the follow-up actions you plan to take together. 

Allow your employee to be an active participant in troubleshooting feedback and goal setting for the next rating period. Setting goals, action items, and expectations for the next rating period will both guide your employees in how to better complete their tasks and provide you with an opportunity to set boundaries or hold them accountable. 

Be Flexible

 If the employee misses their goal (or has only achieved half of it), the process is not a failure. Instead, this is the time to figure out what went wrong and then talk about how they can do better next time. You don't have to be rigid or inflexible; you can offer your employee some alternatives for getting back on track and provide specific timelines for getting there. 

Follow up

 Formally document the decisions made and any action items and make sure both you and your employee have a copy. Make sure to capture, on paper, expectations and goals for the next rating period clearly and concisely. 

Effective performance reviews are an essential building block for an overall HR strategy. They help your employees to function at their best and be clear about what is expected of them.  Follow the five tips above, and you are well on your way to a solid performance review system that will benefit your whole team. 

Does your performance management system need an overhaul? Let us assess and redesign a system that makes sense for your business today. Contact DETS for a free initial discussion.