Annual reviews of employee performance can be stressful for both the employer and the worker under scrutiny.
But as an employer, I've found several ways to make the evaluation process more efficient, less personal and more productive. The review should be a positive experience, even if the employee's performance is not quite at the expected level.
Annual reviews are, in essence, a review of the last two or three months. Most people don't have memories sharp enough to produce a detailed picture of an employee's performance over an entire year. The most recent events are the ones freshest in our memories. I've overcome this limitation by keeping a "tickler file" for every employee.
When an employee performs a task especially well, I put a note in my file. I also include notes when the employee doesn't live up to expectations. Any formal reprimand or formal recognition goes into the file as well. When an employee comes up for annual review, I can easily refresh my memory by thoroughly going over my notes for the past year.
Recently, I was particularly glad I had this system. In the three months leading up to one employee's review, her performance declined so much that I thought I might have to put her on probation or fire her. Yet, when I looked in her tickler file in preparation for the evaluation, I was reminded how good her performance had been earlier in the year.
I discussed the problem with her, and found that difficulties in her personal life were affecting her work. I referred her to our employee assistance program, she got professional help, and her performance improved dramatically. If I had simply relied on memory for the evaluation, I might have lost a good employee.
When I put a note in my file, I try to make it as specific and detailed as possible. This way, when I write the employee's review, I can put together an action plan and provide specific goals. I can let the worker know exactly what he or she is doing right, and explain exactly how to improve performance.
In any evaluation, I stick to the facts and depersonalize the process. An employer should set aside any personal feelings, positive or negative, to get the truest picture of performance.
After reading an employee's file, I give him or her a rating between one and 10, with 10 being the best. A rating lower than five earns the employee probation; above that, I assign a predetermined percentage increase in pay for each rating number (a five gets a 2 percent increase, a six gets 3 percent, etc.). Then, if the employee performs above and beyond the job description, I consider a bonus or an additional pay raise.
To reward superb performance, my company's incentive program requires that each employee have a quarterly bonus review. The results of this review also go into the file, making the annual review process even easier.
The more complete and detailed the employee's file, the easier it is to determine if any raise or disciplinary action is warranted. A thick file can be the key to improving the employee's future performance, too. Rich Shearrow is president of Employer Advantage, a Central Ohio-based professional employer organization that specializes in managing human resources and employer risk for companies in a wide range of industries. He can be reached at 923-9331 or firstname.lastname@example.org.