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Performance Reviews, Annual Reviews, and Employee Evaluations

Quick Tips and Reminders When Evaluating Your Staff's Performance


Are Performance Evaluations Necessary?


Reviewing staff performance can be one of the best ways to document the work activities of an employee’s journey with the company and take control of performance.  If you let them, they can be a lengthy, tedious, and time-consuming process. By establishing reviews as a regular management tool, the company is able to effectively manage its staff's individual performance progress. Reviews are commonly referred to as formal reviews, annual reviews, performance reviews, and, in this document, performance evaluations.


“Every time I do reviews, my staff wants a raise!”


Okay! Timing of the performance evaluations is important. The company should establish a clear policy defining if performance is tied to salary, or if performance and salary are evaluated separately.  The policy handbook is a great place to clearly define the company rules for performance evaluations and salary increases.  Salary increases could also be reviewed separately, and annually, and it should always be known they are not guaranteed.


Why Is Reviewing Performance Important?


The performance evaluation should most importantly be established for the purpose of a collaborative check-in point for you and your staff, and a time to communicate work-related production needs, performance wants, and professional growth opportunities.


“I am so glad I took the review process seriously. I regularly documented the areas when an employee’s performance was below the standard and also learned which employees wanted to learn more and grow with the company.”


How Often Should I Formally Evaluate My Staff?


Employers should make every effort to evaluate each employee's performance at once least annually. This expectation should be included in the employee policy manual as part of the company's commitment to performance management and growth. It is typical for some employers to establish a 90-day evaluation and annually thereafter. The evaluation process should be established and communicated with the entire staff during the new hire onboarding process.  It is essentially a roadmap and an important part of the employee's long-term success and growth with the company.


When To Schedule Formal Evaluations?


“I have seasonal employees so I do several reviews throughout the year which makes it difficult to evaluate my staff equally based on the nature of our business.”


A best practice is to schedule performance evaluations at least once annually. This can mean annually for all staff to be evaluated during the same timeframe or to be scheduled throughout the year based on the anniversary date of each employee.  Certain factors that may weigh in when deciding the optimal schedule include industry trends, a seasonal work-related flow that directly affects company production, collections, performance, and other work factors.


How Long Should A Review Be?


“I do not enjoy doing annual reviews. They take up a lot of administrative time and, as the company owner, that’s not what I want to be doing with my time.”


Many employers don’t want to do them. Evaluations do not need to be an administrative nightmare. The review time should be scheduled that allows enough time for a private and uninterrupted conversation between the employer and the employee.  Reviews should be performed one on one or with another manager or supervisor in attendance.  The typical annual review should allow for at least 30 minutes and could be scheduled for up to one hour.


What To Record On An Evaluation Form?


The review process should be a documented conversation where both the employer and the employee share the employee's talents, and struggles, and discuss ideas about the employee's work.  Documenting this information is key when managing difficult employees and also when managing your best employees. Be sure to document important areas of improvement along with a detailed improvement plan. Performance evaluations should descriptively define the employee’s performance in the areas outlined here.


Job knowledge.  Does the employee have a fundamental understanding of the job requirements and have the aptitude to perform the job?


Motivation. Does the employee show efforts toward performing the job well and meet the basic expectations?


Gets along with others. Does the employee share positive communication with the staff and has the ability to work well with others on the team?


Quality of work.  Does the employee show an effort toward performing the work with quality and without mistakes?


Attendance and punctuality.  Does the employee arrive at work on time and is able to be at work when scheduled?


You should evaluate the job areas that make sense for your company.  The nature of the work and industry standards can determine additional areas of evaluation that also could include:


Adaptability to stress.  Does the employee work well under aggressive timelines and deadlines, and respond well to upset customers?


Ability to work in a fast-paced environment.  Does the employee keep up with the pace of the company standards and adapt well to a changing work environment?


Should My Staff Sign Their Reviews?


It is a great practice for both the employee and the employer to date and sign the evaluation prior to ending the review meeting.  A statement could be placed above the signature line stating that the 'employee understands the information discussed during the review and may or may not agree with the review results'.  This will set the record that the review was discussed and both parties have agreed the meeting was held.


When Is It Okay To Skip A Performance Evaluation?


A performance evaluation should be upheld unless an employee has given notice to resign their position within approximately 60-90 days of the scheduled performance date.  It is also a best practice to postpone performance evaluations during extended leave such as maternity, medical, and any other approved leave that extends beyond the review scheduled date.


"My staff looks forward to annual reviews because they love to tell me about when they go over and above their work expectations and I appreciate being reminded about all the amazing things they do for the company!"


The performance evaluation process should be viewed as a pathway to success! It should be encouraged and established as a standard for excellence. Performance evaluations are a great way to identify and communicate areas of excellence and improvement and establish practical goals, current compensation, and often times a way to determine potential merit increases.



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