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Evaluating Employee Performance

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A major problem with employee reviews is that too many professionals and clerical employees don't understand how their work is evaluated or even what periodic appraisals are meant to accomplish. When employees are unsure of the reason for performance reviews, management itself either lacks understanding of their purpose or has failed to communicate it to those being evaluated. In either case, companies fail to enjoy the primary benefit of a solid, carefully considered employee review system-strengthened employee performance.

The Purpose of Performance Reviews

To be truly effective, periodic reviews must be perceived by employee and company alike as positive management tools. When this is achieved, the influence upon superior people to stay with the company is enhanced considerably.



Some managers approach review time (every six months in some companies) as an opportunity to criticize. Often the reviews are the only time an employee's shortcomings are addressed. Complaints about performance are compiled and presented as a litany of dissatisfaction. There are so many negative points to cover that there's scant time for praise and, more important, discussion of future goals and the employee's role in reaching them. It is no small wonder so many employees dread review time.

However, they're not the only ones who wince when the calendar indicates it's time for reviews. I've known managers who approach the task with all the enthusiasm of going to war. To be fair, many of them are required to conduct reviews under an entrenched system that renders the task more ominous and difficult than it needs to be. If there is also a lack of ongoing give-and-take between superior and subordinate, the problem is compounded.

It's my contention that scheduled reviews should be nothing more than a time to formalize what has been achieved over the course of six months. Employees should not be "judged" twice a year. That there is a need at all to formalize employee evaluations has been exacerbated by the litigious climate in which business has found itself. Formal reviews offer legal protection for employers should it become necessary to dismiss an employee. If the employee's lack of performance and, perhaps, attitudinal problems have been duly noted during reviews, a better case can be made for dismissal. An even better case can be built if an employee's inadequacies are discussed and noted on a more frequent basis than once or twice a year.

No one likes to be judged, especially when a job or promotion could be on the line, and few of us enjoy being in the position of having to evaluate another person's worth. At any rate, a formal system of review is a necessary ingredient of effective management. Without it, especially in larger companies, employee responsibilities are less clearly defined, and company objectives are similarly blurred.

A useful employee review should be multifold, affording both employer and employee a chance to see where things stand between them and to solidify their relationship. In addition, it can and should serve as a valuable motivational tool.

Another major reason so many managers enter into employee evaluations with a large bottle of antacid nearby concerns the paperwork involved. Here is where scrutiny and revision of forms can pay sizable dividends for everyone involved. Although no one would argue the necessity of a standardized form to inject uniformity into the process, is the information called for really necessary to accomplish the goal of motivating employees to reach their potential? In many cases, it isn't. Simplifying the paperwork not only relieves managers of an undue and unnecessary burden, it helps ensure a more accurate evaluation of employees. Less is more, as the saying goes.

A final word about employee review forms. Sometimes, managers rely too heavily on them, eschewing the need for more regular face-to-face contact. When this happens, the review process turns into assigning "grades." This is not only counterproductive, it's demeaning and confusing for the person being evaluated.

Review Performance Goals

Unless managers clearly understand each employee's responsibilities, it's difficult to conduct an effective review. This may sound axiomatic but it's too often ignored. For a review to reflect accuracy, an individual's performance should be assessed only in regard to specified goals. Granted, there are numerous less tangible factors to be considered, but unless a manager has a full understanding of what an employee is supposed to do, how can it be decided whether the employee has done it? (The value of that carefully crafted and thought-out job description proves itself once again.)

The purpose of a review must be clear in the manager's mind and be made clear to employees, preferably ahead of time. This not only puts employees at ease, but also simplifies things for the manager. Like a good interview, an employee review should focus on a minimal number of objectives, the most important of which is to encourage each individual to perform to a higher standard.

While many managers structure in-person employee reviews based on aspects of the individual's appointed tasks and responsibilities, there is a growing number who prefer to view performance in terms of the past, the present, and the future. For them, discussing job performance is only worthwhile if strengths and weaknesses are keyed to the demands of the moment and, more important, what the future holds for the department and company.

To my knowledge, managers who espouse this approach generally apportion approximately 25 percent of the review to past performance, perhaps 15 percent to the present, and the greater percentage to future goals and expectations. These percentages will, of course, vary from manager to manager, but it is the future that should receive the most attention:
  • What must each employee be prepared to do to attain the company's future goals?
  • What deficiencies currently exist that might get in their way?
  • What remedies are available to correct those deficiencies?
Employees whose performances are seriously under-par pose the biggest problem. If there has been regular dialogue throughout the year, the task is made easier at review time. No matter how difficult it is to confront an employee about serious inadequacies (especially a nice employee), it must be done in a forthright and clear manner. Two important things are at stake.

First, failing to bring up negative points that could impact on an employee's future employment does that person an injustice. Most people like to know where they stand, even if their standing at that moment isn't favorable.

The second consideration must be the manager's own career. An employee's failure to produce as part of a team places the manager in jeopardy, not only because work isn't completed satisfactorily, but also because the work of others on the team is invariably compromised.

A negative evaluation demands back-up and documentation. Chronic lateness or absenteeism cannot be discussed effectively as a vague concept. Provide dates and times. Discussing a succession of missed deadlines only has impact when specifics are laid on the table.

Subsequent regular meetings with an employee whose performance is substandard, but whose motivation and attitude are positive, may result in eventual improvement. A good worker, despite areas of weakness, is worth keeping, provided, of course, that the weaknesses can be corrected and the employee wishes to correct them. The manager in this situation must also make a commitment to help the individual grow. This takes patience, the amount of which can only be determined by demands on the department and its workers. When patience pays off in a better employee, the results are rewarding for all concerned.

Personal Problems and Performance

Not all employee problems stem from work. Perplexing personal challenges can arise and adversely impact job performance. A marriage may be in trouble. A parent could be facing major surgery or suffering from a terminal disease. A child is having trouble in school. An employee's debts have gotten out of hand. Perhaps alcohol or drug addiction could be the underlying problem. The right approach to take with good employees whose work has suffered because of personal problems has been the source of management debate for years. On the one hand, there is human compassion to be considered. On the other, there are businesses to be run.

The answer depends, of course, on myriad factors. For example, how long has the individual worked for the company, and during that time has the standard of performance been sufficiently high? It's often easier to help an employee get over a personal problem than to seek a replacement. When this approach works, the company retains a good employee, and a worthwhile human being is salvaged.

It isn't always easy to determine whether a personal problem is at the root of diminished performance. It takes keeping an ear to the grapevine (which managers should do anyway in order to stay informed). Although employee grapevines are rife with erroneous rumor, they are also the source of a surprising amount of good information. In addition, a good manager should be alert to changes in an employee's behavior pattern. A sudden spate of lateness or absenteeism by someone who has not demonstrated such behavior in the past could be a sign that something has changed in that person's life. (Various community and self-help groups are a good source of information on telltale signs of possible drug or alcohol abuse.)

Handling Substance Abuse Problems

Company policy toward helping employees with addictions will run the gamut from instant dismissal to company-sponsored support groups. In many cases, the human resources department will refer employees with such problems to outside agencies. In smaller firms, this offer is made by individual managers.

What's most important is that a company develop a sound policy that bridges the gap between undue harshness and excessive accep-tance of untoward behavior and diminished performance.

Decades ago, the Union Carbide Corporation, in concert with physicians and Alcoholics Anonymous, developed an approach to alcoholic employees that embraced what became known as "tough love." An extensive training program was launched to enable managers to detect alcoholics within their employee ranks. The method of confrontation was codified and taught. The message was: "We value you and your contributions to the company, but your problem with alcohol has impacted on your work. We want you to seek help, and we stand ready to support you while you recover. If you choose not to seek help, we'll have no choice but to terminate you."

Union Carbide meant what it said in this visionary program. Employees were backed as long as they participated in structured recovery programs. Those who chose not to avail themselves of the company's generous offer were dismissed, which often was sobering enough to send them for help on their own.

Reviews Can Help Retain Good Employees

With today's leaner workforce, companies might not have the luxury of "carrying" problem employees. Only a reasoned evaluation of an individual's worth to the company can determine whether an altruistic program for such people will, over time, benefit the company.

For less serious personal problems, managers are usually called on to be counselors, therapists, or clergy. Again, extending this extra effort can help a company retain otherwise productive and loyal employees.

One thing seems certain. For a manager to be truly effective, every effort must be made to separate strictly professional and job-related problems from those fueled by personal anxiety. Good people are hard to find. Once you have them, walking the proverbial extra mile can be smart business.

Union Carbide's program was predicated on the belief that to avoid confronting a problem employee head-on is to do that person and the company an injustice. What invariably happens when problems are ignored is a subtle mistreatment of the employee. The manager becomes distant, hands that individual unpleasant and increasingly meaningless assignments, and, in general, creates a tense and adversarial atmosphere, and is usually not even aware that he or she is doing this. The result? The employee becomes confused and even less productive because of the manager's passive-aggressive behavior. No one wins.

Because of the current changes in the way business must function, the manner in which business leaders deal with and motivate the workforce must also change. The employee review is one area in which great strides can be made. Using it to find fault accomplishes little, but utilizing to inspire workers to reach new heights in their careers almost always brings about a parallel improvement in company performance.
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