Have you stopped doing performance reviews or does your program need a facelift? Let’s face it, performance reviews can be painful, awkward conversations. Plus, it can be hard to measure if the review really has an impact on overall productivity. To add to the challenge, at the end of the conversation, your team member probably wants a raise!
The good news is that your employees actually want performance reviews for more than just raises. They crave and Feedback that a good performance management system will give them. By implementing and maintaining the simple process outlined below, you can make your team more productive and engaged.
The performance review process has a tremendous value to a small business. This is an opportunity to provide recognition, work on a development plan, and set goals with your team members. Download our free Performance Management Process Package and we will walk through how to use it in this post.
How can I find time to do performance reviews and run my business?
5 Steps to Creating a Simple Performance Management System
Review Your Current Process
Performance appraisals provide a formal opportunity to evaluate an individual’s job performance. Typically, employers conduct performance appraisals on an annual or semi-annual basis, but you can use whatever frequency you like. It is important to pick a plan and stick with it.
At my company, ERG Payroll & HR, we do reviews every 90 days. This gives us the ability to get out of the hectic daily routine and talk about the big picture. It also means that we are never out of practice. The reviews are shorter because of the frequency and the conversation is easier because it is not new to either party.
If you have a process in place, write down the things that you like about it and what you don’t like about it. Start a separate page of notes with your five year vision for the company and the goals that will get you there. The performance review process is a great opportunity to make sure your team’s focus is aligned with your organizational goals.
Establish a Foundation for Simplicity
After you have reviewed your old process and recorded what is working, it is time to establish the foundation for your new process. Using templates, reminders, and easy to follow processes for your review will help you maintain the ease that is necessary for a sustainable process.
You will need three key documents to start:
- Performance Review Prep Checklist
- Performance Review Document
- Employee Self-review Document
There are many other items you can add, but this provides the foundation for simplicity.
You should have a template for the manager’s review of the employee and one for the employee to review their own performance. Make sure that the questions on the review align with the mission and values of the organization. This helps you keep the mission front of mind and allows your employees to do the same.
Once you have all of the templates, make sure you have an effective method of storing the information. You can store electronically in something as simple as Google Apps or DropBox, or you can use a performance management system that is built for the task. If you have physical employee files, you should store signed copies in there as well.
In a small business every team member means a lot to the bottom line.
Prepare for the Actual Reviews
I know this might seem a little crazy, but you do need to actually prepare for the review. Learn how to do a proper review. This is why I suggest reviews on set dates instead of anniversaries. It is easier to do a refresher on the proper review process one time before a series of reviews than before every review over the course of the year.
The checklist in our free performance management package provides general guidance on action items for a manager to consider regarding conducting a successful, consistent, and effective employee performance evaluation.
If you have managers that will be conducting reviews, make sure you train them on how to do reviews and hold them accountable to get the job done. You might be missing out on the development of a key employee if you aren’t consistent with this process.
Don’t find an excuse to not give a review. The biggest mistake I see companies make is to tie raises to a performance review. This means that if you cannot give raises, you probably won’t do the review. Make the two separate and PLEASE make sure that you are providing feedback on an ongoing basis so the review is just that; a review.
Understand the Compliance Challenges
Once you have established a process, it is important to understand what liability potentially exists as a result of these conversations. The person performing the review needs to make sure they are reviewing how the job is being performed, not the employee personally. The factors you are judging this employee on must be relevant to the job.
Inform employees of the standards you are holding them accountable to and how you came to the determining factors in their performance rating.
As an employer, you need to have a standardized, well documented procedure that is consistent across the board. If you put an employee on a performance plan and they believe they are not the only one that underperforms in the areas you cite, it would behoove you to have performance reviews with other employees documented that prove otherwise.
Keep great records of your reviews. We recommend retaining for seven years as a best practice but the minimum is one year after creation of the document (Title VII, ADEA, ADA, and GINA). California requires retention of 3 years after termination of employment (CA Labor Code 1198.5. FEHA).
You should let your employees comment on the evaluation and get their feedback on the review. Have the employees sign off on the documentation (they don’t have to agree) to acknowledge that they have seen it. You should have the review process outlined in your handbook to communicate when it will happen and how.
Communicate the Plan to the Team
After you have performed steps one through four it is important to outline the new performance process to your team. This will not only help them to understand what to expect, but help you to hold yourself accountable.
Nothing turns an employee off more than getting a review one year and not the next. You can kill engagement and productivity by letting your process slip. After you communicate clear expectations to the team, you need to hold yourself and the management team accountable to following through.
Make sure that you are using your process of choice to ensure this gets done every time it is scheduled. It starts with a simple calendar reminder and can be something as complex as a full-blown performance management system.
Now, you are prepared to update or start your performance management program. Don’t miss out on an opportunity to identify issues with an employee before a major problem develops. You can increase retention, improve employee development, and get more out of your team by taking the time to analyze what they are doing and how they can improve.
Want to start your own program with very little effort? Get your own Performance Management Package to help you get your process off the ground by clicking here.
Thanks for reading!
PS: If you still don’t want to take the time to go through these steps, we write custom plans for our clients so they don’t have to perform these steps alone. Check out our Outsourced HR solution for how we can do the same for you.