It’s that time of the year: the time for employee reviews, business assessments and an evaluation of whether this year’s goals were met. It’s an opportunity to reflect, evaluate what worked and what didn’t and set goals for the new year. According to GPS, a business development firm, one of the most powerful closing tools a business manager can use is performing these annual reviews before the end of the calendar year in order to get a jump on competitors who may wait until the new year to do their performance review. But regarding employee performance reviews, Barrie Gross, founder of Barrie Gross Consulting, disagrees on the importance of timing and worries more there’s only one employee review per year.
“Most companies do only one per year, but the successful ones are incorporating a larger process that takes place throughout the year,” Gross said. “Even though they may only be doing one formal review at the end [of the year] or at the beginning of the next year to address the employee’s performance over the prior year, the successful companies have created a program where that one review really is a part of what has been ongoing performance feedback throughout the year.”
Gross said that constant communication throughout the year allows for more flexibility in when the all-encompassing employee performance review should be conducted; at year end, beginning of the next year, or on an anniversary date system. In regards to business reviews and assessments, timing in relation to budgeting for resources is a key issue to consider.
“Doing it at a time when you’re in a position to budget for the following year is a great opportunity,” Gross said. “They should be done at a time when you’re in a position to make changes for the next critical period. If you can do that in association with budgeting, terrific. If you can do it at the beginning of the following year and still be able to get the resources you need for addressing negative aspects of the analysis you just did for the prior year, then that’s appropriate, too.”
The issue, according to Gross, is not poor timing on employee performance reviews; a big problem is the lack of training in utilizing performance management programs within an organization. If done well, ongoing performance management feedback allows for a balance of performance appraisal and evaluation with the entire spectrum of performance and improvement strategies. Training managers to utilize performance management systems properly will enhance the content, consistency and timeliness of employee performance reviews. And those same general concepts can be applied to annual business reviews too.
“Sometimes the challenge for a company is that they spend a lot of time, money and resources in creating these wonderful systems, but then they don’t necessarily put the same time, money and resources into conducting the training that needs to go hand in hand with a performance review and management program so that the managers know how to use it effectively,” Gross said. “A performance review should be part of an overall performance management program. That involves, among other things, giving ongoing feedback to employees throughout the year; setting individual and department goals and objectives with each employee; defining the metrics used to measure performance; and creating opportunities for open two-way dialogues between management and individual employees.”
An effective performance management program improves productivity, increases profitability and creates loyal employees with high morale. Training managers to apply these programs properly is key.
“Some companies have put the metrics in place to analyze the ROI of having an effectively run performance management program,” Gross said. “If a company has seen the ROI, the odds are that they’ve already invested in training managers properly. Companies that may not appreciate yet the advantage of having a thoughtful performance management program should think about using their education-and-development professionals to help managers understand the quality of communication as it impacts the performance and productivity of their entire department.”
Performance management need to be explained to employees as well so they can realize the benefits for themselves. Employee feedback is a valuable way to determine the success of performance management.
“A good manager understands that people management is the hardest part of [the] job no matter what [the] job is and takes seriously [his or her] need to look at the effectiveness of communication to enhance performance,” Gross said. “That manager is really going to take to heart how to use that performance management program and how to use it to benefit everyone.”