Just about all employees crave feedback. Not just for purposes of setting the stage for a raise, but because they really want to know how they are doing. And most business owners I know understand how important employee reviews are and really want to do them. However, if you ask business owners and managers what their least favorite task is, writing performance evaluations may just be on the top of the list. Accordingly, they are continually pushed off and sometimes don't happen at all, depriving the employees of needed feedback to do better.
A few years ago, I came up with what I believe to be a simple, effective and pain-free as possible way to do employee reviews. And my employees loved it, too. Here are the steps.
1. Ask your employee to prepare a one-page document.
Ask the employee to include (using bullets wherever possible):
- Their accomplishments over the review period (the "hits")
- Where they came up short (the "misses")
- Their top goals for the upcoming review period
- What skills, training or other resources they think they will need to meet their goals
- How they did with their goals from the previous review period, if applicable
2. Review their document.
Make changes directly on the document based on where you see things differently. If you don't agree with the employee's assessment of her performance, note that on the document. In addition, add anything that they forgot to include.
3. Meet with your employee.
This should take about an hour. You don't have to spend too much time on areas where you agree, although you should quickly mention them. Instead, focus more time where there are differences. In my experience, the changes and comments that I have are not a surprise to the employee.
At the review meeting you can also discuss career progression, if appropriate. However, don't discuss raises. Instead, let the employee know that there will be a follow up meeting to discuss any potential raise, if the question arises. This allows you both to focus on the employee's performance instead of a negotiation.
4. Develop a plan.
Plan to implement any training that was agreed upon in the meeting, based on your budget, timing and other needs. Also, if you agreed on more resources, such as an assistant or freelance help, then make sure that happens.
5. Save a copy of the review for next year.
Hold these employee reviews at least once a year. As the business owner, you should only review the people who report directly to you—all other reviews should be done by the employee's manager or supervisor. That way, the person reviewing has more insight on the specific employee's performance, and you'll have more time to work on growing your business. The first time your managers or supervisors conduct reviews, make sure they understand the process in advance and be sure to take a look at the review afterwards.
I also meet semi-formally with anyone that reports to me at least once every other month to discuss their job and career (as opposed to discussing their projects). I call these one-to-ones. This way, you and your employees are not waiting six or 12 months to find out how things are going and provide feedback. This also means that it is rare that something new is coming up during the more formal review.
At least once a year, and before the review process starts, get the company together to discuss the state of the business. This way, when you ask your employees for their goals, they know what the company's goals are as well.
It's critical to hold employee reviews on a regular and scheduled basis. Your employees deserve timely feedback, and timely feedback is also good for your business because it puts everyone on the same page regarding performance.