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It’s that time of year.
Few people look forward to giving or receiving performance reviews. However, if they are done right, performance reviews can set the tone for a successful year (or six-months, if that’s how your company does it) going forward.
If the method is up to you, don’t just wing it! Prepare for each person. If your firm has templates or forms or other standardized performance review materials, use them, but keep these things in mind:
Consider each person as an individual—one size does not fit all, even if they are on the same team and working on the same projects.
Figure out what each person has done, including A) above-and-beyond extra efforts or successes, B) competent, standard work, and C) problem behaviors or underperformance issues. This is easier if you keep notes throughout the year, but also can be done by looking at past schedules, timesheets, etc.
Based on what you know of their performance, create a draft of what you think they should get for bonuses, raises, promotions, etc.
Based on what you know of their career aspirations and talents, create a draft of what you think they should focus on in the coming year (or six months). Think of this as a “ladder to success” you can show them.
Set them up for a successful meeting—give them advance notice that you would like them to come to the performance review ready to brief you on A) what they have accomplished since the last review and B) what skills or experience they would like to develop in the coming year, as well as C) their long-term career objectives.
When you have the review, start by LISTENING to them. Ask them about their past year. Is their perception of their performance similar to yours? After they have had a chance, discuss anything they mentioned that surprises you.
Give them feedback on their performance based on your perceptions of it. The A-B-C order listed above is a useful template.
Give them a chance to respond to your feedback. If done well, you are likely to get a response that is either: happy, relieved, or a nod and a “that’s fair” acceptance. However, if your feedback makes them feel stupid, or like a loser, or like you hate them, those people may get upset, angry, or defensive. Ideally, prevent this negative reaction by aiming any negative feedback toward “…and here’s how we can get that performance to the next level” rather than to make them feel bad or to punish them for any aspect of poor performance.
When setting them up for next year’s goals, ALWAYS give people ways to improve, even if they are doing great work already. “You’re doing excellent work right now. However, if you are looking to be promoted in the next couple of years, I’d like to get you some experience doing X, some training on Y, and have you take a greater leadership role in Z.” Surprisingly, many people don’t like the “great job—keep it up” feedback, since they are left without any direction for future development.
If you have final say on allocating bonuses, raises, promotions, etc., then you might choose to communicate what they are getting at the end of the meeting, assuming the person’s account of their performance and yours line up. In many firms, though, the supervisor’s recommendations need approval from the owner(s) and therefore sharing your recommendations is NOT a good idea, because if your recs are not followed, the person will either A) get mad at the company for short-changing them or B) get mad at you for low-balling their recs.
Consider retention factors as a primary benefit of a well-done performance review. People will stay at a company in which they see a path to the success and fulfillment THEY want, as long as their compensation is competitive with what they could get from a competitor. If they like the future they can build with you, they will stay and grow with the firm. If they are left unfulfilled or stagnant, your top performers will usually look for better options.
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