As a business owner, it’s likely that you struggle to find time to do the performance appraisals for your team. You are not the only one.
Surveys have indicated that owners and managers hate doing performance reviews and as many as 58% think it is a waste of time.
What’s more, 51% of employees think their reviews are inaccurate, and the top three emotions connected to performance reviews are frustration, anxiety and boredom.
So what is it about performance reviews that give even the most fearless business owner, and the most hardworking staff, such stress and anxiety?
It could simply boil down to them having a bad experience before; one where they felt that they were being unfairly treated or that the work they did for the year was not taken into account.
Giving an appraisal is a skill and unfortunately, not all managers are equipped with this skill. Not understanding the real value and intention behind a performance review adds to the misunderstanding.
The truth is, the annual review should not be a cause of stress. Performance assessment and management should not be viewed as a negative process.
When you assess an employee’s performance, it is an opportunity for you to nurture and develop the team member, assess whether they have the right resources to meet their targets and to offer support, if necessary.
Continuous performance assessment and the conversation that comes with it should engineer trust and confidence between the manager and the team member.
History of performance management
While performance management is not new, it had changed a lot over the years. A quick look at the history of performance management indicates how much things had changed since it was first introduced in the 1900s.
What began as a self-appraisal tool had morphed into an all-singing, all dancing ratings system where you will find yourself being pitted against your colleague or measured against goals and objectives set arbitrarily 12 months ago. Such a system will not foster good working relationships nor will the employee felt any value.
Unfortunately, most managers see the annual performance review in isolation. It should be an culmination of a year-long relationship where the manager and staff have a feedback loop.
Ideally, when it comes to the day when you sat down with your staff, none of what is being discussed in the review should come as a surprise to either of you. The annual review should be a chance to wrap things up for the year and both manager and staff should feel energised and motivated to look ahead.
So the annual performance review does not work?
Of course it does. There is no need to exorcise the ghost of the performance review. There is still great value in having a robust performance assessment in place:
- It sets clear guidelines and targets for a team member to meet
- It gives timely feedback about the team member’s performance and
- It supports the team member in achieving his/her targets
The important thing to note is the annual review should be a culmination of a continuous feedback process that would have occurred throughout the year. In all instances, it should be a ‘summary’ of the team member’s performance.
Having in place a continuous feedback process would have highlighted any issues and steps already taken to improve the performance.
Fair and objective assessment
As per the above statistic, more than half of employees felt their reviews are inaccurate. A fair and objective formal assessment is essential in order for team members to ascertain their performance level.
Throughout the year, the manager should strive to have informal feedback sessions; perhaps as a catch-up session weekly or a 1:1. Should any issues arise, these sessions are the perfect avenue to discuss what had went wrong and what should happen in the future. This is a more effective way to discuss dips in performance rather than discussing this six or twelve months down the road.
One other way for a fair and objective assessment is to introduce a structured annual review. One assessment template should be used for team members with the same job functions.
The objectives, key performance indicators (KPIs) or service level agreements (SLAs) set for the team member should be clear, tangible and achievable. The last point is crucial since it is not wise to set up your employee for failure with unrealistic targets.
The formal assessment process itself should be a robust process, done in stages:
Preparing for the review
Giving the team member time to prepare and reflect on their performance. You should take this opportunity to assess what was agreed and whether the team members have met their targets.
It is also an opportunity for you to gather evidence of the team member’s achievements or otherwise.
Conducting the review
The assessment should be focussed on the actions that the team member did or not do. It should be specific, focusing on the role and what could be measured; not a personal or emotional attack on either party.
To ensure clear understanding, the language used should not be ambiguous. You should give the team member an opportunity to self assess their performance based on the evidence and time for any clarifications just in case you have misinterpreted the data.
The outcome of the review should be both parties agreeing on the performance for this period, agree on the objectives for next and identify any support or skills training needed. It should close on a positive note with the team member satisfied that it is a clear and transparent process.
A follow up is essential to ensure that the team member is given fair support. This can include you fulfilling your part of the bargain by ensuring the team member does have the training and resources requested and giving them regular feedback.
In following the process above, you will be able to conduct an objective review which is fair for the team member. The process is transparent, clear and confidential, dealing with the specific action, couched with support for the team member.
There should also be clear HR policies and procedures in place for the team member to seek redress should they feel that they do not agree with the assessment.
Another way to ensure fair and objective assessment may be the use of external providers such as auditors, an independent accreditation body, a statutory body or monitoring board.
By using the industry standards for performance, it would be clear to the team member what they have to achieve in their role. This is often important for professional roles like health visitors or social workers.
What else should you know about performance reviews?
Handling performance reviews is something that you will get better at the more you do it. While sticking to the formal structure will produce a transparent and fair assessment, it may be good to keep these five steps in mind when reviewing the performance of your employee:
1. Don’t squeeze a dry lemon
While there is a need to set targets, reflect how effective your employee already is. Acknowledge that they are already performing at near peak level and explore what other targets you could look at for future performance.
2. Power from peers
Getting feedback from their peers is a good way to ensure your assessment is fair and objective. This is especially true in giving a more rounded view of your team member.
Peers can tell you more about your team member’s role within the team, especially contributions not measured by facts or figures.
3. Less reprimand, more reward
This one needs no explanation. Giving positive feedback will ensure that the assessment is a positive experience. Team members are more likely to stay in their jobs where they feel they are valued.
4. Healthy competition
It is not only the Sales team that can have targets. Never underestimate the competitive streak in people, especially when in a team. Having leagues or competitions may result in cohesive team spirit once they get into the swing of things.
5. Track results
In support of point 4, tracking results is a visible way to keep that healthy competition going. It is also to support your employee in his job.
A improvement in the results is a cause for affirmative celebration while a dip may prompt you to check what went wrong and whether they need extra support.
It is in line with the attempt to fix the problem when it happens rather than at the end of the year.
More from ByteStart
ByteStart is packed with help and tips on all aspects of starting and running your own business. Check out some of our most popular guides;
Motivating your team
- How to design an effective incentive scheme for your small business
- 5 ways to motivate your staff without spending a fortune
- A Guide to employee perks and benefits for small businesses
- Incentivising and rewarding staff with an EMI share option scheme
- What is employers liability insurance, and is my business legally required to have cover?
- Making a contractual job offer to a new employee
- Managing staff sickness absence – A Guide for small businesses
- 7 Common HR Mistakes small businesses need to avoid making
- Guide to Employment Contracts for small businesses
- What employers need to know about hiring staff from overseas
- A Practical guide to flexible working rights for small businesses
- Making staff redundant – how to do it and stay on the right side of the law