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Time to Revamp Your Performance Review?

Author(s):

Troy Harrison
Troy Harrison is the author of Sell Like You Mean It! and the president of SalesForce Solutions, a sales and management training, consulting and recruiting company in Kansas City, Kansas.

January 2013, Inside Supply Management^® Vol. 24, No. 1, page 44

Personal Connections: Work. Life. Balance.
Don't settle for a generic, by-the-numbers review process. Instead, focus on how the employee can develop new skills and habits or prepare for a future promotion.

What connotation does the annual performance review have in your organization? Depending on the answer, it may be necessary to re-examine its purpose and effectiveness. A performance review should be an opportunity for exploration, not indignation.

The review period is the best way to answer employee questions regarding personal performance and to assess job satisfaction. Let's face it — everybody likes to know where they stand. Managers who don't regularly review annual goals leave employees questioning their importance and relevance.

For reviews to be successful, they have to be done consistently and at regular intervals (consider quarterly) throughout the year. I've worked in companies where reviews were only done when someone was "in trouble" — which is the wrong approach. In those cases, employees know the review is simply a pretext to firing someone. It wastes the positive aspect of performance reviews, namely the opportunity for management to provide coaching that will enhance an employee's performance.

Areas of Focus

Regardless of how the review form is structured, there are certain elements that require inclusion: quantity of work, quality of work, internal relationships and external relationships.

Quantity of work. Nearly every type of work performed can be counted and quantified, whether it is sales made, invoices entered or deadlines met. What you're trying to measure is overall work effort, output and productivity. During that measuring process, are there responsibilities that require more time commitment than the employee currently has available? Is the current workflow appropriate?

Quality of work. Just because an employee does a lot of work doesn't mean he or she is good at it. The performance review should address the quality of an employee's work. Are contracts written accurately? Does the employee meet project deadlines? This is your opportunity to help with work habits. The key equation to any job is: Quality of Work x Quantity of Work = Results. In other words, the more you do something and the better you do it, the more successful you will be. Equally important, however, is whether the employee is best suited for the assigned responsibilities. Are there projects that play to the employee's strengths better than others? How can you capitalize on that while enhancing an employee's sense of job fulfillment?

Internal relationships. Does the employee get along well with co-workers? Being a good team member is a big part of being successful as an employee — especially in the supply management function. Does the employee work effectively with engineering to ensure final customer specifications? Are project expectations and metrics communicated to all team members?

External relationships. For employees who deal with people outside the company, such as customers and suppliers, how do they relate to these people? Are they good ambassadors for the company or do they leave a poor impression? Treating suppliers poorly is detrimental to your company's objectives. (If you're not convinced, try getting a favor at 2 a.m. from a supplier that has been mistreated by someone in your organization.)

These four components are key areas of an employee's work habits that should be measured. I prefer grading on a scale that includes:

• Consistently below expectations
• Sometimes below expectations
• Meets expectations
• Sometimes exceeds expectations
• Consistently exceeds expectations.

Grade the employee on each component and comment as appropriate.

Progress Makes Perfect

The next portion of the employee performance review should address progress, because employee performance shouldn't be linear. All managers want employees to improve. Two additional sections help address the area of improvement.

Progress since last review. If the employee has improved since the last review — particularly if he or she has accomplished certain goals — this is the place to record it. It's also an ideal time to discuss stretch goals that are specific to the individual's professional growth plan, a critical part of maintaining motivation.

If, on the other hand, the employee's performance has declined since the last review, note that, as well. Are there specific reasons for the decline in performance; for example, personal problems, health or workload? Discussions about underperformance are important to gauge whether the employee can rebound, or whether more drastic steps such as probation or termination need to occur.

Goals for next review period. Every employee needs a professional development plan. This section can be used to prescribe corrective action for employees who are not performing up to standard. However, it's just as important to have goals for your top performers. Don't settle for saying, "Great job, Steve, keep it up." Instead, list specific ways employees can develop new skills and habits that will put them in line for a promotion. Provide leadership training opportunities that prepare the individual for management roles. Pay membership fees for the employee to join professional groups such as Toastmasters to improve his or her communication skills.

The performance review meeting should be formal, and should include detailed discussions about various aspects of the employee's work. Be prepared with facts and figures as appropriate. Allow employees to comment verbally and in writing. It's also important to ask questions about their job satisfaction — it may help avoid the surprise of finding out your employee is looking for another job.

A good review program is essential to maintaining a high level of staff performance. Don't skimp on your efforts, and your bottom line will thank you.

For more information, send an e-mail to author@ism.ws.

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