Performance reviews – sometimes known as staff appraisals – are something that you will have heard of. It’s also likely that you know they are considered a good thing to do to keep your staff motivated, happy and on-track with their work activities.
What we find at citrusHR, however, is that many small employers have the best of intentions but find they take too much time for little obvious reward, or they feel unnatural and so are left as the very last thing on the managers to do list.
The cause of this is often down to managers being unaware of what a good appraisal entails; or how to structure one well.
What is a performance review?
Once in a while, other than through an informal chat, you will have cause to discuss an employee’s performance. These type of discussions usually take place annually; and sometimes at the request of the employee who thinks it’s about time they had a pay rise.
The technical term for this “annual job chat” is a performance review or appraisal. Ideally they should be meetings that are set-up and led by the direct line manager; and never in response to a request for a pay rise. In fact, appraisals should be about performance only, and salary discussions should be kept completely separate.
The performance review meeting is an opportunity to have an open discussion between you and your employee. Here you can review all aspects of their role and performance, and agree expectations and objectives for the next year. It is also a chance to establish any training and development needs, and to support them with work objectives and career aspirations.
As part of this, you should get written feedback from your staff about how they feel they’ve performed in specific areas. This will usually take the form of a questionnaire, where you’ll ask specific questions about areas of their role or the company. Ideally you would request this ahead of the meeting to give you an opportunity to consider their comments and prepare for the meeting.
A typical questionnaire would ask questions about the employee’s main successes, what areas they’d like to improve on, how they would like to develop and even how they feel the company is working around them.
Once you’ve discussed their answers, you can agree on goals for the next year (the key word here is ‘agreed’). Depending on how they’ve performed, these might be minor tweaks or you may agree that major improvements need to be made.
Why should I conduct a performance review?
1 – It helps employees feel valued.
This is a biggie. When people feel valued and appreciated, they will work harder and be happier. A performance review provides the employee with an open environment in which to discuss their thoughts and opinions; and gives them an opportunity to tell you how they feel they are getting on.
This isn’t something you can achieve with an informal work chat in 10 mins over a cup of tea in the staff kitchen. A formal meeting gives the employee the chance to feel their voice is heard and gives you the chance to tell them they are appreciated. Something that is very easy to forget to do.
2 – It gives you a structured, balanced plan for future performance.
Other than just expecting your staff to perform ‘well’, performance reviews give you and your employee a chance to identify and agree upon objectives for the future. As well as outlining the work standards you require in your business, it also provides structure for the employee – giving them something to aim for. An employee who buys into what they are doing, and has something to work towards is likely to be happy, engaged, and more productive!
Remember, objectives are overarching targets, not a list of daily tasks.
3 – It helps to identify issues with performance.
An employee may feel more comfortable discussing work issues in a structured two-way conversation that is carried out with every member of staff. That way they won’t feel singled out in any way. You may like to discuss areas in which you feel they could improve and they could equally have identified areas that they feel less strong in. Such issues could be related to systems or processes, relationships with other team members or managers, or training and development requirements. If they raise any serious concerns, for example, comments that suggest they are being bullied or harassed, then you would investigate those further outside of the performance review process.
4 – It’s a set time for you to discuss performance
Rather than relying on ad-hoc conversations about performance, some employers mark out time in the calendar to ensure that they talk to staff. We would recommend talking to your employees more than once a year, and perhaps setting up a formal meeting every quarter. These don’t all need to be formal appraisals, but they can be meetings to discuss how the employee is getting on with the objectives agreed at their annual appraisal. Talking in depth about performance takes more time than you would think, but the benefit is that it can drastically reduce the daily burden you feel from employees not knowing what to do, or asking questions that you think should be obvious.
Often it’s a case of empowering your employee to think for themselves, showing that you trust them, and the positive results will follow.
5 – It helps you apply the right training, to the right staff.
Offering the same training to all staff may end up being more of a drain on your time and your pocket than it needs to be. However, using performance reviews to identify who actually needs more training helps keep costs down and ensures you are investing in the right areas and people. Remember, training doesn’t always need to involve expensive external courses. You can always consider cheaper options such as internal training, work shadowing, online training courses, free webinars and books.
Our advice is to invest time and energy into your performance reviews and it will pay dividends in the long run. Use them wisely and they might just make a real difference to your small business.