10. Employee Performance Reviews – Do You Think You Should Do Them?

Hands up if you’ve:

• Put up with ordinary performance from employees who are on good salaries
• Made someone redundant because it was too hard to fire them
• Been challenged for unfair dismissal and lost
• Had to exit an employee, but thought later that if they had been given more timely, honest feedback, they might have been great
• Had a champion employee who was fantastic at first but slowly over time their performance slipped, your relationship with the broke down and you ended up parting ways

Now hands up if you do regular performance reviews with your staff?

No one seems to like performance Reviews (also known as performance appraisals, employee evaluation, employee appraisals etc). Most business owners I know range between “don’t do them” and “kinda, sometimes”. Everyone seems to feel awkward around them perhaps because:

• People don’t like giving (or receiving) honest feedback
• Managers worry that they will offend a valuable employee and damage their relationship
• Managers don’t quite know what to cover/talk about
• Pointless “tick-the-box” reviews, often done within government or large organisations have given many a poor view of performance reviews

I meet business owners who explain their lack of formal performance reviews by saying things like “I see this person every day, I sit next to them, why do I need to have a formal meeting? Isn’t that a bit weird?”

The irony is that this important part of people-leadership has so much potential to do so much good – if only people knew about the amazing outcomes when performance reviews are done well.

All the issues I listed at the top could well be avoided if effective performance reviews were in place.

The real performance review is a courageous, authentic, open conversation between leader and team member. It is based on evidence, not subjectivity. It puts it all on the table, behaviour and outcomes, the good, the bad and the ordinary.

If you achieve this, you will find that the employees you want to keep will find it useful, enriching, encouraging and motivating. You will feel a sense of accomplishment that you have helped someone become more productive and you will feel like a real leader (because you will be).

Furthermore, the benefits are numerous:

• Regular performance reviews can mean the difference between a successful A-grade employee, and a complete breakdown in their relationship with you (remember, people leave bosses, more than companies)
• Small issues don’t become large issues because they get dealt with in a timely manner
• There are less occasions when difficult conversations need to be had (having said, if you think a difficult conversation is required, you’re right, and it’s probably overdue, so get onto it)
• You are likely to see an attitude/performance improvement of anywhere between 2 and 10 times, all things considered
• Employees are likely to be a lot less demanding at pay review time if they have a realistic, wholistic view of their own performance – rather than a vacuum which they fill with ‘I’m Awesome!’.
• Employees who don’t fit or perform, are more likely to “self-deselect” (leave of their own accord) because they can see they aren’t making the grade and don’t want to do the hard yards required to close the gap. This avoids all the unpleasantness of a dismissal or the cost of redundancy (too often as a lazy dismissal)
• Good employees love authentic performance reviews and go on to fly even higher inspired by the fact that you’re noticing their efforts

So it’s a no-brainer, the benefits are huge and can even make the difference between your business’s success or failure. Yes it’s going to take time and energy on your part, but that’s why you employ people – you leverage you time by delegating to others – so make sure you do it properly and the pay-back will be massive.

Just how often should performance reviews be done? Every 12 months at worst, 6 months at best. You can even do less formal ones at the 3 month mark between the 6 months ones if you want – and should be in an employee's first year. When an employee is new, then every month if a 3 month probation, and perhaps monthly then every 2 months if a 6 month probation.

What happens in a review meeting? I like to run them with three basic agenda items:

1. Employer gives feedback to employee on outcomes and attitude, and discusses this with the employee
2. Employer reviews employees growth and learning activities since last review, and agrees ongoing activities to be reviewed at the next meeting (this is a surprisingly effective part of the review – don’t underestimate it)
3. Your employee is given the opportunity to talk about anything they want, and give you and the business, feedback

Now it is way beyond a blog post to go into details on how to structure feedback and the meeting in detail. Further, some of that detail needs to be tailored to your particular business.

Because I get a lot of questions about performance reviews, I have created a training course to help business owners and managers. It’s live on-line, over two weeks and each attendee will have a chance to work with the Wolfpack performance review templates and adapt them to their own businesses. You walk away with all you need to start doing your reviews.

More information about the course here

So go ahead – review the performance of your team regularly. Tell them what you really think in a formal, thorough, objective, constructive meeting which covers all aspects of their role. It will be well worth your while.