The thought of an annual performance review can fill you and your employees with dread. However, if you implement performance reviews effectively, they can help you achieve your business goals.
While there should be an annual performance review, Steve Cesare, human resource expert with The Harvest Group, says that shouldn’t be the only time you’re meeting with your employees to discuss performance.
Cesare explains performance coaching should be an ongoing monthly conversation between a supervisor and an employee to keep people on track with their performance throughout the year.
“It’s like if you only weigh yourself once a year, are you fat or skinny?” he says. “If you track yourself every month or every day or every week, you can be on a diet and be healthy all year round.”
Cesare says by conducting these monthly check-ins you can make sure people are progressing and are on the right course. He says these monthly touchpoints also make sure there are no surprises for employees.
“Most people get surprised at the time of a performance review because they were never told that before,” he says. “Employees don’t like performance reviews because it becomes a game of gotcha.”
Peak Landscape Inc., based in Truckee, California, is one of the companies that conducts monthly check-ins with their employees.
“Quarterly or yearly reviews allow poor performers to create bad habits that only become more difficult to fix because they were allowed to go unchecked for so long,” says Ryan O’Connor, operations manager for Peak Landscape.
The Performance Review Process
Performance reviews should contain the key drivers of success with various factor ratings to see if the employee is meeting performance expectations. The annual performance review should be formal and include documentation.
“A performance review is typically a narrative subjective evaluation that has a number attached to it,” Cesare says.
In Peak Landscape’s case, their performance review consists of 10 categories ranging from safety and communication to equipment and truck care and overall job performance and efficiency.
“We believe they are important for holding team members accountable while providing clear messaging on areas they are excelling and areas they need to improve,” O’Connor says.
When to conduct an annual performance review depends on your company but Cesare advises his clients to do performance reviews in February. This is because the results from the previous year will be available. Taking the results from the previous year and comparing them to the goals set for that year you can see if your company did good or bad and then put together a business plan for the new year.
“By the end of January, we have our 2021 goals,” Cesare says. “We should take those 2021 goals and trickle them down to the employee and say, ‘This is what our company did last year. This is what the goals were. So, here’s what you did last year and here are your results,’ so that way the company and the employees are all aligned at the same point in time.”
Cesare says the rule of thumb as for how long an annual performance review should take is an hour. They should be a summary of the monthly coaching sessions, which are typically 30 to 60 minutes.
“Make sure that they don’t just become a sounding board to bash team members for everything they are doing wrong,” O’Connor says. “Use them as an opportunity to point out the areas they are excelling.”
Leaving a performance appraisal meeting, the supervisor should have an action plan for each employee to work on over the year. The action plan should be the agenda items for each month’s one-on-one session.
“They have to have an action plan or development plan coming out of the performance review that the supervisor and the employee can focus on during each successive one-on-one meeting to make sure alignment occurs,” Cesare says.
Overcoming the Negative Stigma
Supervisors often don’t like doing performance reviews as giving negative feedback can feel confrontational. Cesare says one of the ways to remove the negative opinion of performance appraisals is to make supervisors more like coaches and less like auditors.
“Eventually the employees will see their supervisors as coaches, rather than disciplinarians who are simply there to audit them, and criticize them for something they did wrong,” Cesare says. “An auditor will tell you what you did wrong. A coach will tell you what you did wrong and show you how to do it better.”
Cesare says the key is coaching to help people become better, not just to show them their weaknesses.
“It’s a process, it’s not an event,” he says.
Make sure employees know the goal of the performance reviews is developmental.
“The goal of performance reviews is to help people improve their performance so the company can achieve its business goals,” Cesare says. “It’s not a game of gotcha. It’s not being condescending. It’s not just lording over somebody like an auditor.”
O’Connor adds that pointing out the positive aspects of an employee’s performance can also help overcome the negative stigma of performance reviews.
Before conducting performance reviews, supervisors should be trained on how to conduct them properly.
“Because if you do something wrong on a performance review like saying the wrong thing or being discriminatory you could get sued,” Cesare says.
Setting Realistic Goals and Offering Rewards
There are three types of goals you can set: empirical ones, process ones or cultural ones.
Empirical goals have numbers attached to them such as earn 10 more customers. Examples of process goals include arriving to work on time or turning in all paperwork by Thursday at noon. Cultural goals promote being a team player, safety and other aspects that support your company culture.
Depending on the different jobs positions what goals you set for employees will vary. O’Connor advises setting clear standards about what is expected at an employee’s current level and what is expected to get to the next level.
“The primary issue is alignment,” Cesare says. “We want to make sure that we align employee performance with departmental objectives and company results.”
Cesare says while there are performance expectations people have to achieve, when employees reach goals or go beyond that, they should be given some type of incentive or bonus to reinforce it so that behavior happens again in the future.
“I think we all want money,” Cesare says. “I think most of us like money. It’s not everything, but it’s very important to get in the world of work. Reinforcement is very important.”
O’Connor agrees that team and individual goals should be recognized and celebrated throughout the season. Whether the reward is a one-time bonus or a pay increase depends upon the company, the culture and the economy as to what works best.
“If you’re giving performance reviews and bonuses, based on individual performances that are not connected to the organizational results, there’s nothing feasible about that,” Cesare says. “It can’t happen.”
Opportunities to Improve
If an employee isn’t performing properly, Cesare says the coaching should start immediately.
“There’s no gestation period for performance, if you see somebody doing something right or wrong, praise them, or coach them immediately,” Cesare says. “Don’t wait for 30, 60 or 90 days.”
O’Connor says they actively coach throughout the season and address any issues proactively as they arise.
“Waiting until the end of the season only reinforces the negative behaviors and sends a message that they are performing adequately,” O’Connor says. “It’s my job to let employees know when they are not performing up to our standards and give them a chance to improve. We have had several long-term team members that have taken constructive criticism and went on to become valuable team members.”
For performance reviews to be successful, Cesare says it comes down to alignment, achievement and accountability. The individual’s, department’s and company’s goals all must be aligned.
“We want our employees to achieve their goals so the company’s results flourish, and that allows the employees to make more money,” Cesare says.
As for accountability, Cesare says whether someone is good or bad or right or wrong, you have to hold them accountable and coach them to your standard to help them achieve the goals that keep the company alive.