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Conducting a Yearly Performance Review

It’s wise for a business to conduct regular performance reviews of employees, in which each employee’s performance is evaluated and commented upon. Such reviews give management the chance not only to rectify poor performance (or commend and reward excellent performance), but also to re-align employees with the company’s overall goals, so that each employee’s activities can be as efficient and productive as possible. In today’s Workshop, Jeffrey Moses discusses this important activity.

NFIB.com

Performance reviews should consist of two distinct parts–the first, in which the employee’s past performance is evaluated and explained; and the second, in which the employee’s job and tasks are evaluated in terms of how they fit in with the company’s overall goals.

The first part of a performance review should focus on an employee’s strengths and weaknesses, with specific examples of the employee’s performance cited. These examples should be gathered from supervisors and managers. When criticism is given, it should never be vague or unsubstantiated. Similarly, when commending excellent job performance, specific successes should be cited. The more concrete performance-review criticism or commendation is, the more effective the review will be as a learning tool for an employee.

If an employee is being cited for inferior work, poor attitude, tardiness, excessive absenteeism, etc., it’s important that the employee be given the chance to respond to criticism. If he or she feels that criticism is unwarranted, it’s important that the manager conducting the review listen carefully with an open mind. Nothing is worse for overall company morale than to have even one employee falsely accused of inferior work or mistakes during a performance review. Word of such a management error gets around quickly, especially in a small company, and can lead to general mistrust and apprehension.

Performance reviews are often associated with salary adjustments, promotions or demotions. These should be discussed near the end of the review, after employees have been informed of the basis for such decisions.

Throughout the review, an employee’s place and importance within the company should be emphasized. This is the ideal time to explain precisely what management expects and how the employee’s work affects the company’s ultimate success. A review is also the ideal time to give details of upcoming projects, and to explain the employee’s role in the projects.

Clearly, performance reviews should not be conducted casually. They require attention and organization. Management must prepare for each review, gathering information from supervisors and other managers and evaluate each employee’s strengths and weaknesses ahead of time. When handled well, performance reviews prevent employee drift. They help solidify the company and enable staff at all levels to function proficiently and knowledgeably.

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