Contributed Column

Personnel Points

by Dave Mount

Appraising Employee Performance

One of management’s most tedious tasks is completing performance reviews, and I want to spend some time talking about their importance and imparting some things I have learned over my 40-plus years in business.

I should say at the outset that I hate reviews as much as the next person does, perhaps more.

Okay, that said, here’s what I’ve learned over the years. First, it is important to separate salary reviews from performance reviews. It is much better if our employees understand this. That way, they will not necessarily expect a salary adjustment every time there is a review, and, in this way, we can give salary reviews annually and performance reviews whenever needed.

Giving good and timely performance reviews can nip poor performance in the bud and help keep your company moving forward. Good reviews also help management motivate employees by recognizing their value.

I happen to like reviews that dwell on the subjective, rather than try to fit everything into a box, so our reviews have a lot of space for writing. Also, we tend not to use a 1-to-5 or 1-to-10 rating system. We use the subjective comments to guide the reviewer. The only exception is that we have a box for unacceptable performance in each area.

I got away from the rating system because of experiences I have had when every department manager had rated all his people above average or outstanding. I remember one time when the HR director came to me and showed me a review of the administrative assistant of the VP of marketing. Every box was checked as outstanding.

My opinion was that she was the worst admin in the executive suite. I challenged the VP, and he simply told me that every one of his people was outstanding.

That incident was over 30 years ago and it had a profound effect on my philosophy of performance reviews. It is specifically the reason why I no longer grade every employee according to a scale.

Another effect the incident had on me is one that makes a lot of people angry with me but, in my opinion, forms the essence of the system. The sum total of all employees in a company constitutes the average for that company. You do not have sufficient information to judge against employees elsewhere. That means that for every above-average appraisal, there has to be a below-average one. Of course, managers and employees don’t like this, but it is true. If everyone in a department is outstanding, then, happily, outstanding is average.

A far better way to do appraisals is either the way we do it, with a lot of subjective comments, or the way a lot of other companies do it today. They use a system that measures employees against our expectations. So instead of measuring against peers, the review measures against expectations by judging whether a person meets, exceeds, or does not meet expectations.

Performance appraisals, in whatever form they take, should become a permanent part of an employee’s personnel file.

The history of an employee’s progression through performance appraisals helps a company. This is a two-edged sword, though, and it can bite a company big-time if the appraisals are not done honestly.

I have seen employees terminated shortly after an “above average” appraisal. When I would ask the manager why, the answer invariably was that they gave that appraisal to “motivate” the employee to do better. That is a wrong answer and a really poor way to motivate. It also can possibly open the door to charges of wrongful termination.

If the history of appraisals shows a pattern of below-average performance, the issue of termination becomes easier. It also makes choices in a layoff clearer. •

Dave Mount is the owner of Westaff in Burlington.

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