Performance reviews are not fun for either the employee or the reviewer, but in the past were viewed as a necessary evil of working in an organization.  The fact is, however, that they are not a requirement except in the case of some governmental or union employees.  The other fact is that they take an enormous amount of time and create lots of stress for everyone.  So why do them?
An article in Legal Section of the Society for Human Resource Management site brings up some interesting points.  The April article by Judith Droz Keyes discusses both the reasons for and the pitfalls of performance reviews.
The formal review system was developed predominantly as a defense against discrimination lawsuits in the 50’s and 60’s, to justify terminations and disciplinary actions.  They were also supposed to serve as an honest and accurate assessment of an employee’s job performance relative to the employer’s standards and, to the performance of the team.  They were intended to motivate the employee to achieve great things and improve the morale of the company. 
The problems with these evaluations are many.  First and foremost, most supervisors are not good at reviewing their staff, and tend to avoid confrontation.  Therefore the employee may have been reprimanded in some way during the year, and at review time will get a satisfactory rating, so as not to cause waves.  In other cases, the language used in the review is not clear – saying “I would like to see” rather than “this job requires”.  In addition, most supervisors are not held accountable for the quality of their review process, so there is no consequence, until the employee is let go and a lawsuit is file.
That brings up the second problem.  Many times the review process is designed more as a career path management tool than a disciplinary tool and so problems with employees may not be accurately documented in the process.  Then, when an employee files a “wrongful termination” suit, they cite their years of positive reviews as evidence.  Sadly this means that the supervisor must now always look at the process as a potential legal pitfall rather than a helpful tool for management.
Yet another problem with the process is the lack of timeliness of the feedback.  Management should be addressing problems or achievements as they occur, rather than waiting a prescribed amount of time to give praise or criticism.  As a supervisor I had to keep careful notes during the year to avoid the “feeling of the moment” – the employee had just done something to irritate me that might affect my attitude during the review.
Finally (though there are probably more issues I haven’t thought of) there is the legal side of employment which says you need to be careful about commenting on things such as “professional attitude”, excessive absences, or cases where there is a conflict with the supervisor.  Any comments must be weighed against the protected rights of the individual employee, which tends to lead to a very bland review.  It is very difficult to deal with an employee with serious health issues when their position is vital to the organization and slows down the whole business process.  A supervisor must be very careful to comment in language that addresses the goals of the company and how they are not being met…or some other cleaver way to discuss the problem.
So if not performance reviews, what?  As mentioned earlier, timely addressing of the issue, either positive or negative, is much more useful for both employer and employee.  Record of these discussions need to be documented just as in a review, especially when compensation is tied to performance.  In place of a review, a “career plan” showing goals for the employee to work toward would be much more useful.  The goals should be developed through mutual input and allow the employee to show how they would like to grow in the business. 
Whether you are a manager or part of the staff in an organization, it is a challenge to keep dialogue open and keep everyone on the same page.  Good luck!

Tags: change management, employee feedback, employee morale, job seeker attitudes, performance management, team building

Being flexible and prepared for the changes that are a part of this new economy is a real challenge for the organization, especially if management can’t lead the process. The skill level and flexibility of the C-level group will determine how well the company handles future growth or future declines.

Many of today’s leaders had their learning period in a growing economy, and the pains of layoffs and decreased business are new to them. So how does a leader keep everyone tuned in and prepared for what comes next? An article in the Society for Human Resource Management, “Studies Highlight Recession’s Impact On Employee Relations” summarized some of the issues employees have in their interactions with management. At a time when the recession is affecting all, management stress levels are high, and executives aren’t anxious to deal with employee emotional issues. In part this may be because they are uncomfortable with the changes being made and so avoid discussing them. This is the time, however, when employees need a lot of feedback and information as to the company’s plans and problems.

Not really news, but most employees (50-60% according to the SHRM article) feel that the feedback they get, good or bad, from their supervisors is too vague to be useful, and therefore isn’t effective in managing the workforce. Giving clear information on performance takes thought and effort in a time where management may be stretched thin – but it is really important for success. Examples of the good or bad performance need to be part of the dialogue, as well as information on current company performance and future plans. In one well-managed tech company the CEO printed out the financial summary for the month and shared it with staff and management.

How can leadership develop better techniques for communicating with the rest of the company? First, think about what they would want from an interaction with their bosses. Focus on how to get the facts out in a reassuring but effective manner. “Highly effective communicators measure to see exactly what they are accomplishing at each step,” said John Finney, senior communication consultant for Watson Wyatt, in a statement. “Communication does not exist in a vacuum—it always serves a larger business purpose. The best-performing companies plan communication strategically, like any other business area.”

With all that said, the SHRM article found that most employees (9 out of 10) believed their company was going in the right direction, and were very loyal to their employer. However, once businesses starts to expand again and present more employment opportunities, that may change. This is why building a strong communication system within the company is key- now!

Tags: change management, employee feedback, employee morale, performance management