As another year draws to a close, the issue of employee performance reviews is on many business owners’ minds. New trends have emerged eschewing traditional methods of evaluation, with some employers rewarding any employee who has not been sanctioned. More contemporary methods involve extensive performance analyses, as well as discussions about employee goal-setting.
“There has to be another aspect of employee evaluation than just sitting in a chair occupying space,” says Insperity Senior HR Specialist Rick Gibbs. “Workers should be judged on actual performance.”
There are a number of methods of judging the efficacy of an employee that vary by industry. However, common benchmarks often include:
1. Quantity. If one worker has a much higher or lower output than his/her peers it can be assumed that they are not as productive and may require coaching or training.
2. Quality. Shoddy or incomplete work is an indicator that a person may not be fulfilling their job responsibilities.
3. Time. When an employee requires twice as much time as their colleagues to complete a task, your costs are higher when that person is on the clock. There are many payroll solutions that can help you pinpoint the true “employee cost” per job.
Since one person’s perception may not be reality, employees should be assessed by a select group within the company, including:
- Peers. Staff members in similar positions can offer insight into their coworkers’ performance, especially as it relates to how they function as part of a team.
- Supervisors. Employees in managerial roles can assess the performance of their direct reports, and should be expected to support any deficiencies with specific evidence. For example, instead of a manager saying, “John is always late and never finishes his work on time,” their statement should be, “During previous four weeks, John arrived late six times and didn’t complete three of his seven projects by the deadline.”
For business owners, it’s important to differentiate between actual performance and any managerial prejudices by asking for specific examples of successes and failures to avoid claims of favoritism or even discrimination:
- Team members. Your staff as a whole can provide another perspective on a person’s performance. Is the individual an important member of the team? Do they interact with others and support their efforts? An employee whose quantifiable output – quantity of work, quality of work, time spent on task – may not be the most impressive, but he or she may be serving as a mentor or trainer to teammates.
- Self review. Workers should also be asked to critique their own performance. This process can help managers their direct reports ensure that they both are communicating and understanding an employee’s performance goals.
Performance reviews are an important annual function for any business, regardless of the style you choose to employ. Assessing your staff’s contributions and helping them articulate their goals for improvement will help you build a strong, capable team over time.