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Conduct Effective Performance Reviews

There is an age old process conducted in most organizations, large and small, known as performance review or performance appraisal (the term performance review will be used primarily in this article). The importance of providing feedback to employees cannot be overstated. But doing so in the proper setting, context and manner is critical to carrying out successful performance reviews.

Having a performance review system in place is important for a number of reasons including:

-Enhances coaching and mentoring opportunities for managers and supervisors.
-Clarifies the performance criteria that are important for employees to understand as important in doing their respective jobs.
-Defines a clear basis for wage increases, promotions, disciplinary action, and other important job related issues.
-Reinforces that performance and pay are rationally tied together.
-Serves as motivation to continue to focus on improving performance.
-Brings consistency to the organization in terms of how employees’ job performance is measured.
-Creates a means for clear and complete documentation of job performance.
-Helps identify training and development needs.
-Assists in associating company goals and objectives with employee goals/objectives.
-Communicates important information to the employee about how they are perceived relative to the work they do on a daily basis.

All organizations should have some sort of performance management system in place. Many “systems” in place are not well defined and/or they do not address critical performance variables (competencies) commonly associated with work.

Employers should understand that personal biases enter into the overall perceptions about employees. What many managers believe is factual about an employee is often nothing more than their own biased perception of the employee’s performance.

Assessing an employee is sometimes an unfair process. In most organizations, there are often misperceptions about various employees. And unfortunately there are a lot of managers and supervisors who are just not good mentors and coaches and, therefore, the employee does not have the benefit of correcting performance issues prior to their annual performance reviews.

Adding to the problems associated with personal bias, misperceptions, and poor coaching is the fact that many performance review sessions (the actual meetings to review performance) are poorly conducted by the manager.

It is important that reviewing performance be taken seriously because it is a critical feedback mechanism for employees and a chance for managers and employees to share valuable information. But keep in mind that formal performance reviews are not the only time that feedback to employees should be given. Appropriate and timely feedback to employees is important in order to reinforce positive “behaviors” or address negative “behaviors”. In short, well managed organizations do not use the performance review as the sole feedback mechanism. There should be regular interaction between manager and employee prior to formal review sessions.

Some organizations choose to use a formal review process more often than annually and that is acceptable and may even be preferable depending on the culture of the particular organization. However, conducting formal reviews too often can dilute the effectiveness of the process so it is important to consider the impact of doing formal reviews more often than once per year.

Typically a more effective approach is to create a culture where regular feedback is provided outside of the formal performance review process. In this scenario managers conduct more informal discussions about training needs, goal achievement, a job particularly well done, performance concerns, etc. as they are needed.

Having periodic discussions about goal achievement is central to a high performance, high accountability culture. These are all important to helping employees achieve their own goals and dreams and to the overall success of the organization.

An effective performance review/appraisal system includes at a minimum:
-A well defined process for documenting performance throughout each review period. This is an important reference tool when it comes time to complete the actual review form.
-Well informed/trained managers/supervisors relative to how to complete review/appraisal forms and how to conduct performance review meetings with the employees.
-A properly prepared review form that includes appropriate and valid competencies for measuring employee performance.
-A valid and appropriate rating mechanism (scale).
-Clearly defined goals for each employee that relate back to organizational goals.
-A clearly defined review period and review process that all employees understand.
-Fairness and equity in the review process.
-Consistency in how employees are evaluated. In other words, minimal or no bias from one employee to another.

Many organizations, large and small, are using what are known as on-demand performance review systems. These are typically secure Internet based systems that allow you to manage all of your performance reviews as well as document performance. Reviewsnap at www.reviewsnap.com and Success Factors at www.successfactors.com are two such products that are considered excellent performance review systems. One major advantage to these systems is that they do not require you to build or load software on any of your computers. Simply subscribe and login into the system from any computer with Internet access.

To help ensure that your organization has an effective performance review/appraisal system in place, the Performance Review Manual provides a complete guide to developing your performance management system. To learn more about this widely used tool, Click Here.