We all know that the employment landscape changed considerably since the 80s. In 1989 & 1990, we saw employees at the middle-management level get wiped out when their jobs went away. Even to this day, some of those folks who lost their jobs in massive layoffs, are still underemployed. Since then, we’ve seen some real slowdowns in the economy, right after 9/11 and then again in 2008. I have spoken to many, many business owners who have not been able to give raises since 2008 because the money just isn’t there. This is not a good excuse not to do performance reviews.
I strongly recommend to my clients that they keep raises and performance reviews as separate events. An exception would be if an employee performs well above normal expectations and is receiving a merit raise for his/her efforts. The 10% raises that some of us enjoyed back in the 80s are gone forever. When companies had that ability and budget, it was easy to differentiate a star performer like Gertude with a 9.5% raise and give Ivan, a less-than-stellar performer, a 2% raise. But even if companies can’t give their employees additional money, they should at least do written performance reviews. People want to know how they are doing and good employees also truly want to know what areas where there is room for improvement. A fairly painless process involves letting your employees do self-evaluations. A good method is to hand the review form out with paychecks and ask your employees to return their completed forms in sealed envelopes with their names on the outside. You, in turn, complete the employee’s review BEFORE you look at what the employee wrote. In this way, if there is a disconnect in your communication, it’s easy to find out. If Gertrude thinks she is exceeding your expectations regarding her quality, and you think she is failing to meet those expectations, this gives you the basis for a discussion. You might say, “Gertrude, I’m concerned with your assessment of your quality, given the (8) rejections we received from Customer A and the (6) rejections received from Customer B. I’m curious as to how you reached your conclusion that you were exceeding our expectations.”
The timing of reviews is also pretty important. Your employees know the day (and sometimes even the first hour) that they started working for you. If your Employee Handbook or guide says that you review everyone on or around their anniversary date, that is what your employees expect. Then, when you are late delivering the review, it creates anxiety for the employee. For small companies, it is an easier process to do twice per year. In March, employees hired between Jan – June could be reviewed. In October, employees hired between July – December could be reviewed.
For help with this process, don’t hesitate to ask HR Compliance 101. We’ve helped put good review systems in place for several clients and would be glad to help you with yours.