4 Tips for Effective Employee Performance Review

As an entrepreneur, from time to time you need to take a step back and evaluate whether your business achieved the milestones you had set earlier in the year. You can look at what worked and what didn’t and use that experience to grow the business even more in the coming year.

A business’ success or failure is heavily dependent on the people running it. So part of your annual retrospection must include performance reviews for your staff. What did you expect from each employee and did they deliver? The following are some tips on conducting effective performance reviews.

1.  Prepare

Many business owners and managers place most of the burden of preparing for a performance evaluation on the employee. While it’s reasonable to expect the employee to come armed with more data and documentation than their boss, the review won’t be meaningful if you as their manager haven’t done your homework.

Even if your organization is fairly small and has less than 10 staff members, you are unlikely to remember all of the employee’s defining successes and failures that happened during the year. Develop a detailed outline of the employee’s performance profile with specific references. Automated data such as extracts from time tracking and employee scheduling applications (see Humanity for instance) can provide a strong foundation for the performance conversation.

2.  Don’t Leave It Until the End of the Year

Reviewing an employee’s performance at the end of the year is good. However, the primary purpose of a review meeting is to get the employee to do better as opposed to being a forum to reprimand them. Ergo, if you notice a member of your team slacking off, moving in the wrong direction or taking actions that don’t align with the organization’s strategic goals, give them feedback as soon as you can.

This ensures that the business doesn’t have to endure the consequences of the employee’s poor performance for the rest of the year. As long as the person in question listens to feedback and immediately makes a positive change, their poor decisions may not even have to be brought up during the end of year review. They’ll have already been discussed and resolved.

3.  Be Transparent About Evaluation Procedures and Performance Expectations

You cannot judge performance accurately if there’s no clarity on what standard the performance is being measured against. One of the most common reasons for performance appraisal confusion is a disconnect between the expectations of the appraiser and the appraisee. To prevent such an undesirable scenario, be straightforward and unambiguous about what each employee’s targets are.

Not only should you communicate this at the start of the year but you should remind them throughout the year. That way, each employee will already have a good idea of how they performed even before the evaluation meeting. It reduces the duration of the review meeting by making it easier to cut to the chase.

4.  Don’t Solely Dwell in The Negative

If someone has worked for you through an entire year, it’s unlikely that they are an irredeemably incompetent employee. You certainly see some traits in them that make you want them to continue working for you. So during the performance appraisal, resist the urge to only dwell on the negative.

Human beings respond positively to recognition. Preferably, the first session of the review meeting should dwell on the good things the person did and what they have achieved for the business that year. When you then move on to the areas where the employee came up short, they are less likely to see it as unfair or a demoralizing attack on their person.

It’s often said that people are the most valuable asset of any business. When your employees are in tune with your organization’s objectives, you are likely to flourish. Unfortunately, your team members won’t always do what needs to be done hence the need for regular performance reviews. These tips can help you ensure that the reviews are effective.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan