Why every business should conduct them

By Daniel Abramson, HRSource

With the end of 2023 approaching, this is the time to evaluate your people and determine whether salary increases and bonuses are in order based on merit and performance. 

Let’s face it: People want to know where they stand and performance evaluations offer that feedback and transparency. Annual reviews help employees understand how their contributions are regarded within the organization, and they make it easier for the company to effectively recognize and reward the “A” players.

Here are some other reasons for conducting employee reviews:

  • Shows you are listening and care
  • Identifies areas for improvement
  • Identifies gaps in soft and/or technical skills
  • Boosts employee engagement and morale
  • Helps make fair compensation decisions
  • Helps assess future management talent and “bench strength”
  • Improves productivity of the business and employee
  • May help reduce turnover
  • Helps foster communication and two-way dialog

Types of Performance Reviews

There are several employee performance reviews you can use in your business.

Here are the three most common:

Self-Assessment. This is when employees rate themselves against a predetermined set of standards. Their manager rates them against the same criteria and uses both documents as a point of discussion. This is the most common type of performance review.

360-Degree Reviews. This type of review includes candid feedback from others, such as managers, co-workers or direct reports, who share their comments anonymously. Also known as 360 evaluations, multi-directional feedback or peer feedback, 360-degree reviews spotlight the employee’s competencies and can suggest areas for growth and development. 

Management by Objectives (MBO): MBO employee performance reviews use SMART goals (i.e., specific, measurable, attainable, relevant and time-based) to provide employees with clear evaluation criteria. Managers and employees must agree on specific goals and should set a realistic end date. Without a time limit, one’s goals could drag on, muddy the success metrics and suffer from procrastination. Deadlines provide a sense of urgency so that tasks are completed.

Managers needn’t choose just one type of review. Many companies use two or more review types to create hybrid models. Each can be combined or adapted to fit your specific evaluation needs. Remember, focus on the good stuff too — catch people doing things right! — not just the negative.

To download a sample evaluation form that you can use or modify, click here.

Here’s some other evaluation criteria to consider:

Time Management: The ability to use one’s time effectively or productively

Attention to Detail: Thoroughness in accomplishing a task (important!)

Continuous Learning: Consistently improving existing knowledge and skill sets

Core Values: The root beliefs and values that a company and employee operate from

Customer Focus: Puts customers’ needs first and delivers on promises

Help Employees Move Forward Confidently

End your employee performance reviews with clear steps employees can take to progress. Every staff member should leave these meetings with a clear understanding of where they stand and what actions they need to take to improve and/or advance. Transparency is essential for a productive workplace and employees want to know how they rate.

Salary Benchmarks

Need help with salary benchmark info? One of the largest and most comprehensive sources of free salary data is the U.S. Bureau of Labor Statistics at BLS.com. The BLS has salary survey data for many different positions in various industries as well as for specific geographic locations. You can also check out Salary.com and Payscale.com.

Employee Recognition

Finally, make sure to thank employees for their contributions (and not just once a year). Workplace recognition is one of the top factors that encourage employees to stay with or leave an employer. It’s important to end performance reviews on a high note, so make sure to let your employee know during the session how much they mean to you and the rest of your team by thanking them for their contributions.

Again, let’s catch people doing things right. Just a simple “thank you” can go a long way, and a performance review can be the perfect time to let your employees know just how much you care.

Daniel Abramson is managing lead of HRSource, a comprehensive collection of customized employment tools and turnkey solutions exclusive to BrandSource members. Contact Daniel at (540) 535-8484 or dabramson84@gmail.com.

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