Basics of Conducting Performance Reviews

By: David Waters

Basics of Conducting Performance Appraisals

Annual performance reviews are one simple (but, not easy) way in which you can differentiate yourself from your competition; annual reviews are also a way for your competition to differentiate themselves from you.

It does not matter if you conduct annual reviews or not. It does not matter if you do a good job with reviews or if reviews are handled as just another exercise. The bottom-line is: Your performance review process will be used by your employees and recruits to compare your company (and your company's culture) against other companies competing for their services.

Believe in the performance review process or don't waste your time.

Basics of annual performance reviews begin with a company-wide belief that performance reviews are critical to the success of the organization. Although time-consuming, management would find it hard to invest time in areas with more benefit potential. Employee reviews help managers and subordinates feel better about themselves, their roles, and their respective relationships, not to mention helping them do a better job. The review process helps create and/or maintain an open and honest work environment ... that is, if the process is managed correctly.

The following steps are some basic principles found in performance review processes used at companies that are building successful business cultures:

Design a performance review process that is Fair and Legal
1. Be sure to align your process with State and Federal legislation
2. Tie reviews to requirements of individual job descriptions
3. Develop a standard rating system
4. Allow time for employee input prior to supervisor feedback
5. Standardize the process and forms throughout the company
6. Integrate the performance process with company policies and procedures documentation and manuals
7. Communicate the process numerous times
8. Create an escalation process if employee feels they have not been treated fairly

Design a performance review process that is Meaningful
1. Create a Fair and Legal review process - it will go a long way toward being 'meaningful'
2. Include the employee throughout the entire process
3. Provide feedback that goes beyond the role of the employee's current responsibilities and position
4. Listen to the employee's feedback and apply relevant data in review documentation
5. Explain the areas where you disagree and use as a teaching opportunity
6. Reward performers and under-performers appropriately

Overview of Performance Appraisal Process
(go to: http://www.gerke.com/human_resources_assess_personnel.html) to see diagram of process.

DO NOT incorporate the performance review process with the Salary Review process UNLESS:

1. Salary adjustments are figured on an individual by individual basis
2. Under-performers and Stellar-performers are compensated accordingly

Copyright 2007 Gerke & Associates

Human Resources
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