How to Conduct
an
Employee Performance Review
Part of running any successful business is conducting an employee performance review. These reviews benefit both
the company and the employees and can help determine pay increases or reductions.
The reviews also give employees an idea of how well they are meeting your expectations. However, the performance
review should never bring out something that comes as a surprise to the employee. If this happens it points out
your failure to communicate with them on a daily basis.
While conducting employee reviews may seem like a daunting task, they are highly beneficial and do not need to
be difficult or confrontational. Here are some thoughts on how best to conduct them:
A Positive Approach One thing I often see is an owner using an employee performance review to simply
point out an employee’s failures. You may be frustrated with an employee but taking this approach will never
be helpful.
It is true that an employee performance review creates an opportunity to tell an employee that they are not
performing up to standards. However, if this is the case, the goal should always be to communicate it in a
constructive manner.
If an employee does not meet your standards, explain what areas they are lacking in. Offer tips and explanations
that teach the employee how to perform the job properly.
Always give your employee a fair chance to improve before demotions, firings, or pay reductions. If the employee
still fails to perform then it’s likely best to let them go. One bad employee can negatively impact many
others.
Preparing for the ReviewBefore beginning an employee performance review, fill out a standard performance
review sheet. Set a list of criteria that all employees should meet, such as appearance, timeliness, courtesy,
customer service, and attentiveness to detail.
Include all criteria in your standard sheet that you will use to evaluate any employee. You don't want to single
out a flaw in one worker that you don't others. It's important that everyone is held to a consistent standard.
Objectively fill out the standard performance review sheet. If you do not work closely with a particular
employee, ask a supervisor to fill it out. Only after fully completing and evaluating reviews should you meet with
and review employees in person.
Conducting the Review When the employee enters the room for the review, be certain to set them at ease. Make
it clear that your role is to be constructive and foster improvement, not to punish them for their mistakes.
Always start the review on a positive note, pointing out something that the employee excels at. This can be
something like dealing well with problem customers or even something as small as always showing a willingness to
learn. No matter the employee, always find a positive point to start.
Review the entire performance review sheet with your employee, highlighting all strengths and weaknesses.
Explain how problem areas can be improved and better yet, how more opportunities can be had to utilize their
strengths!
If an employee excels in a particular area, find out what they do that is different and consider recommending it
to other employees.
Be certain that the employee fully understands your review and rating, as well as any decisions regarding job
title or pay. Ask the employee to sign the review and offer them a copy for their own records to help them remember
your advice.
Just as the review started on a positive note, it should end on one as well. Find something good to say about
the employee's performance and let them know that you appreciate the effort they put into your business.
Recognition is a big motivator and can greatly improve job performance. Go here to learn more about
employee motivation.
See the Whole PictureIt is important to remember that an employee performance review is intended to review
performance since hire or since a previous review. If an employee's performance hasn't been good for a few days but
has been exemplary otherwise, take the whole picture into account.
It is unfair and unproductive to give a negative review when the bulk of the work has been above standards. By
giving a fair review, you can ensure that your employees understand exactly what is and isn't working without
feeling that negative feedback is personal in nature.
Ease the Stress One way to ease the stress of employee reviews and improve job performance is to offer
rewards with each review. Create incentives for getting an exemplary review, from a promotion or cash bonus
to a day off or a gift certificate.
Create a reason for employees to strive to get the best review possible and make certain that they are aware of
the incentive well in advance. A reward is often a great motivator. Click here for more ideas on employee motivation.
Closing ThoughtsWhen evaluating employees, I have seen owners take numerous approaches. While there are
certainly guidelines for reviews, there isn't one set way to do an employee performance review.
When it comes to yours, remember to stay positive. Keep your value proposition and your management style in mind
when deciding how to do them and what to focus on.
Make sure that your reviews are personalized and that you give appropriate instruction on how to improve
performance and how to capitalize on strengths. Give praise for a job well done.
While an employee performance review may seem stressful to conduct, know that they are always more stressful for
the employee. Work to set their mind at ease. Make the experience a win-win situation and help them excel. It will
benefit you and your employees!
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