If you’re like most small business owners, you dread the annual process of employee reviews. But really, you should welcome this time to talk to employees about what they’re doing right (and wrong). Done correctly, employee reviews can be a valuable tool that not only help your workers do their jobs better, but also help them feel more motivated and connected to your company.
Here are some best practices for performing employee reviews:
Set a schedule. Traditionally, reviews are done once a year, but these days, many businesses are doing reviews as often as quarterly. Frequent reviews make a lot of sense for two reasons: Business is changing more rapidly, meaning an employee’s role and duties may change more often than once a year; and Millennial employees, who make up a growing share of the work force, typically require frequent feedback to be most effective.
Create standards for employee performance. Develop a review form you will use during the process. (You can find sample review forms by searching online and adjust them to your needs.) Make sure your standards are measurable—for instance, a customer service employee might be ranked on how many calls or contacts they handle, what percentage of issues are resolved on the first contact, and how the employee is rated by customer feedback.
Get input. Anyone who directly supervises the employee should have input into the review process. You can also consider doing “360-degree” reviews. This means getting feedback from everyone who interacts with the employee, including not only supervisors but also co-workers, vendors and customers.
Get feedback from the employee. Before their reviews, have your employees complete part of their review forms allowing them to rate their own performances and share any goals for the coming review period (such as learning a new skill). This will give you an idea of how realistic they are about their own performances.
During the review, be specific about any problems that need to be resolved. If there is a major issue, develop a plan for how the employee can improve and put it in writing. Have the person sign the document and make sure he or she clearly understands the steps for improving, the time frame and what the result will be if he or she doesn’t meet the new goals (whether another warning, suspension or termination). If you are promoting employees, or if they’re getting bonuses or raises, let them know the details and when the changes take effect. Have them sign the review form and keep it in their records.