The Benefit of Honest and Timely Performance Appraisals

Staff can be the greatest asset in your business, but for any service based business – they typically will be the greatest expense – whether they are an asset or not.

Perhaps its my corporate background, my genuine desire to improve things (people and businesses), or it might simply just be my objective to see a larger number at the bottom line – but regardless of the driver, I have consistently found that well delivered performance appraisals work AND….that most small and medium businesses don’t do them.

Well performing and engaged staff are truely a great asset to any business. I have benefited from having a number of staff in this category over time, and I know that the performance appraisal process has been a key tool in fine turning performance.

The favoured reason given by business owners for why they have not completed performance appraisals is “lack of time”, but personally I feel that insufficient resources and a lack of understanding of “how” are perhaps the true drivers. Following on from my article around Job Descriptions, this article provides a practical guide to 7 elements of a successful performance appraisal.

1. Performance reviews should be positioned and utilised as a tool for mutual improvement. Improved performance at the employee level will make for a more enjoyable role for the individual (which may also bring with it financial benefit), whilst for the business, this normally equates to a more harmonious and efficient workplace.
2. Reviews are not a popularity contest, so objectivity and honesty should be your default. Objectivity around the role and the persons relative performance in it. If their performance is not up to the required level, then this should be noted, with the conversation then focusing on how this can be addressed moving forward. I personally find that if I am being honest in my assessments, then it is a better result for all. Simply being “polite” and not addressing an issue does no-one any favours. As you can appreciate, clear Role Descriptions and Key Performance Indicators assist with this.
3. Staff reviews should be very much a two way conversation. I recommend that you provide plenty of notice for a discussion and then allow the staff member to provide an overview of how they see themselves performing. This can provide a valuable insight as to how they see the work place and themselves in it. Don’t be surprised if they are either, (a.) very hard on themselves or, (b.) have no awareness of any issues. If they have been very hard on their own performance, then you may need to temper this a little, whereas if they have no awareness – then you know that it may require a deeper discussion.
4. Reviews to me are merely the formal conversation which happen quarterly, half yearly or annually. Regardless of the frequency, if you are being a good leader, then there should be no surprises in the meeting. The staff member should already know how they are performing, based on the ongoing feedback which they receive over the course of the working week. If as a leader in the business you are not providing sufficient ongoing “in the moment” feedback, then today is a good day to commence doing this.
5. Staff reviews should have a level of consistency to them. They should be consistent in the format, the frequency and outcomes. Reviews are important, so even when you are really busy, you should give them the priority which they deserve.
6. A broad format that I use for reviews is; Current Performance – Objective against KPI’s (quality and quantity) AND Subjective elements (could be team unity, personal delivery, presentation, staff relationship etc) – pointing out key achievements and any areas which require improvement, and then couple it with a Training/Development plan (outlining the development needs you or they identified – and what’s the plan to do so). Naturally the format varies from role to role, however the basic components should be present.
7. Lastly, with almost all forms of communication, I find that its generally not the message which can offend someone, but the delivery. So if its a tough or difficult message that you have to share, give strong consideration to how you deliver it.

If you currently don’t undertake any form of performance reviews, then don’t expect that you will get everything right the first go. Work with your team, explain why they are being implemented and that you welcome their input into how to improve them.

Performance reviews add value, as they provide a measurement of performance for your staff along with confirmation of vital feedback. This in turn fosters self improvement, so in the end, the employee, the business and you the owner, all benefit.<

If you have further questions around performance reviews or more generally how to improve the performance of your business, contact us today to arrange for a preliminary consultation.