How to Conduct a Proper Year-End ReviewShannon Hall
According to business research firm Gartner, employee performance drops by 10% at companies without a performance evaluation process, and less than 5% of managers can effectively manage employees without it. We believe that performance reviews are extremely important—now more than ever. SHRM recognizes performance evaluations as the most important communication tool in an organization. It provides an opportunity to provide feedback on job performance, solve potential performance issues, reward good work with bonus compensation, and set new goals for improvement and impact. Performance reviews are a process and require year-long planning and observation in order to make a fair and valuable assessment. In this article, we will outline the SHRM recommended process for performance evaluations so that you can set your employees up for success within your organization.
Goals should be set continuously in order to direct employee performance towards fulfilling their assigned job duties as well as meeting company goals and objectives. It’s important to take past performance into account when setting goals in order to ensure that the goals can be reasonably met given the employee’s performance baseline. Goals are important because it communicates your expectations for the employee moving forward. SHRM recommends that performance goals fit into the SMART format (Specific, Measurable, Action-oriented, Realistic, and Time-Bound). Some goals related to job duties are relatively easy to observe and quantify, and some are not. It’s important to focus on goals that can be measured objectively and backed up with recorded information in order to avoid rater bias during the assessment of an employee’s performance. SHRM defines rater bias as an error in judgment that can occur when a person allows their preformed biases to affect the evaluation of another. Rater bias can be avoided by making sure performance is rated on an objective scale.
Managers should provide ongoing and consistent coaching in order to ensure continual feedback. This allows the employee to adjust their performance in order to regularly improve and succeed. This also allows for goals to be adjusted based on changes related to the company’s needs and objectives. By regularly coaching, you improve employee engagement and avoid presenting any surprises during the year-end evaluation, and you are maintaining the quality of your employee’s performance before and after the annual review. Managers should observe if and to what extent employees are able to adjust their performance in order to make their overall assessment.
The assessment phase can include input from both the employee and the manager. Some organizations allow employees to complete a self-assessment before the evaluation meeting. This allows for managers to better understand how employees view their own performance so that they can set goals accordingly. During the assessment phase, managers should review information related to employee performance and complete the performance evaluation form. It is essential that this assessment remains objective and based on performance. Managers should be able to defend assessments based on documentation such as performance logs and critical incidents. It’s important to avoid rater bias and keep the assessment objective and rooted in true performance.
Evaluation & Setting New Goals
The evaluation phase is when the manager and employee meet to discuss job performance and to set new goals. This is when the evaluation form is reviewed and feedback is given from both parties. Goals should be tied to the organization’s strategic goals and objectives and the employee should see a direct connection between their personal objectives and those of the company as a whole. Employees should also be engaged in setting their own goals so that they can be included in the process. Long-term goals should have short-term benchmarks so that progress can be measured along the way. Ultimately, performance and improvement are the employee’s responsibility, but be sure to provide employees with the support they need to achieve their objectives.
The structure of the performance review process is designed to ensure quality control and employee engagement. The process keeps lines of communication open when it comes to the evaluation of job performance and keeps employees and managers on the same page. A lapse in this process is an invitation for organizational conflict and low performance. We believe that annual reviews are the perfect opportunity to reward quality performance, strategize to solve performance issues, and set goals for a prosperous new year.
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