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Spring is that time of year when managers will be preparing to conduct their annual performance reviews for their teams. We share some useful tips to help your employee evaluations go more smoothly and run more effectively. While performance reviews take some time, regularly reviewing the work your team members are doing can have a big impact on their performance as well as the overall goals of your business. A typical employee evaluation will cover the following: performance; whether goals have been met, not met, or exceeded; and feedback on how your employee works with others. Employee evaluations are the ideal time to offer positive and constructive feedback on an employee’s work and how they interact with others day-to-day. Here we take a look at why annual performance reviews are so important and what steps you can take to make them as successful as possible. Why are annual performance reviews important? There are lots of reasons why annual performance reviews are important. Regular performance reviews: Improve the overall performance of your team members Help you to identify the areas you need to improve. By looking at the work of your team over an extended period of time you will find solutions to help them improve in those areas Increase engagement of employees, which will lead to happier employees and better employee retention Regular performance reviews help employees to get a better understanding of how their position contributes to company goals and helps them feel more invested in the success of the organisation. Help you identify training needs and plan further professional development Identify employees who may be ready to take on additional responsibilities and opportunities for promotion Plan your professional development for the coming year Regular performance evaluations help you identify areas where team members need additional training. It also gives you the opportunity to identify whether team members are interested in specific types of professional development opportunities that could improve their performance. By investing in training to improve your team’s performance, you increase their engagement and loyalty to the company. Improve engagement loyalty By setting aside time annually for a one-on-one conversation with each person you manage, you can strengthen your relationship with them. It gives you the opportunity to praise their efforts, reward them for their hard work and dedication and listen to any concerns or complaints they may have. This regular communication helps your team members feel their opinion matters and that their company is invested in their growth. Increasing engagement can have a positive impact on retention and performance. Identify opportunities for promotion Meeting with employees regularly helps you better understand their strengths and weaknesses as well as their specific interests, which can help you identify promotional opportunities they may be suited for. How to conduct an annual performance review Research shows they have lots of benefits for you and your employees, so here we share the basic steps to take to carry out your reviews: – Start to prepare for the review Start by reviewing the employee’s performance review from the previous year and any mid-year check-ins that you may have conducted. Review the employee’s self-assessment as well as any notes you made throughout the year about their performance. Make note of specific progress they made towards goals, accomplishments, areas where they exceeded your expectations, additional responsibilities they took on, challenges they encountered and any areas where they need to further develop and improve their performance. Also, make a note of any specific information you want to share during the performance review, perhaps giving an update on how the company’s doing, plans for the future and feedback on how the team is helping to deliver the company’s plans. – Discuss the evaluation with the employee in advance Before beginning the review process, let the employee know about the review, tell them how you will be assessing their performance and what their role will be in the process. Ask them to complete their self-evaluation. Speak to your HR team about any paperwork you should be using to evaluate performance and record future training needs. A good approach is to get employees to give written feedback in their own words to assess how well they think they are doing. This can be done through a questionnaire on aspects such as an employee’s contribution to the team, role development and effectiveness. Your team members will approach this in different ways. Some employees will be very positive and may tend to enhance their ratings through self-promotion or ingratiation, others may underplay their achievements. – Write the review Next, write the employee’s review. You can use bullet points if you prefer. However, it’s important to use clear and concise language and provide examples of their strengths and opportunities for improvement. Include specific examples of successes to praise their hard work and position any challenges or shortfalls as opportunities for growth. Make sure the feedback you give is positive, constructive and actionable, where ever possible, so they can start working on making improvements right away. – Always prepare conversations in advance Always take time to prepare for the one-on-one conversation with the employee. By preparing in advance and making note of key messages you want to talk about, you can feel confident that you won’t miss any opportunities for feedback and improvement. The most important step in the annual performance review process is the one-on-one conversation you have after preparing the review. Taking the time to prepare for this conversation will help you make sure it’s productive and runs smoothly. Take some time to consider what you want to communicate and what feedback you would like from the employee. Plan to review the employee’s accomplishments, strengths and areas they can improve. Plan to discuss their interests, goals and what training they may need to reach those goals. Plan how much time you will need to have the conversation and where is a good place to do the review. – Review the performance evaluation with the employee Meet one-on-one with the employee, reviewing successes since you last spoke and identifying specific results they achieved for the organisation. Discuss any obstacles they may have encountered and what they can do to overcome them to improve their performance in the future. What goals can they work on over the next year? Goals should be SMART – Specific, Measurable, Achievable, Realistic and Time-bound. It’s a good idea to set some short term and well as longer term goals. To set objectives: Identify key areas of responsibility – think about particular priorities for the coming period. Consider what result is realistic to achieve for each area of responsibility during the review period. Think about how to measure achievement of an objective and then set standards based on quality, cost and deadlines. – Document throughout the year To make a performance most effective, it’s best to document positive and negative events throughout the year. This makes it easier for you to give a thorough evaluation that examines your employee’s performance throughout the entire review period, with specific examples. It also makes it easier for you to make notes of accomplishments and obstacles when you’re preparing the review. – Get feedback from colleagues Request feedback from other managers and co-workers who worked closely with the employee during the review period. The review needs to be balanced, and you should avoid bias with employees that you naturally get on with more than others. Getting feedback from others will help you get a balanced view of how well the employee works with all team members with examples. – Consider giving the employee their review in advance If there is a form you fill out as part of the evaluation or if you have a written document detailing their performance, consider giving it to the employee before meeting them in person. This will give them the opportunity to review and process the evaluation in advance before having a conversation with you. This will help make the conversation go more smoothly and be more productive. We provide examples of forms you can use in our Performance Review Toolkit. – Focus on accomplishments and growth The majority of the conversation should focus on the positive aspects of the employee’s performance and their accomplishments, as this will motivate the employee and make them feel rewarded for their efforts. If you’re meeting with an employee who consistently performs above-average, the discussion should centre on steps they can take to grow professionally and further improve their performance. – Encourage the employee to talk The best reviews are those in which the employee spends a large portion of the conversation talking. Encourage them to talk by asking lots of questions. Question about what they expect to be most challenging, what they hope to accomplish in the coming year and what you could do to be a better manager will encourage them to talk about their aspiration and how you can work better together. – Reward and recognition Discussing pay and performance in the same conversation as your performance review can compromise honesty, company culture, and the ability to grow. That’s why it’s becoming more popular to separate performance reviews from conversations that lead to pay or promotion decisions. By separating the two and having an alternative framework for determining pay, companies can maintain a pay-for-performance culture without sacrificing opportunities for employee development. However, if you do discuss pay as part of your review, remember there are other rewards that you can offer employees, particularly in an environment where companies are struggling to manage spiralling costs. You may want to think about giving a low cost reward. Remember to consider the tastes, and values of the person you’re recognising when deciding which low cost reward will deliver the highest impact. Here are some examples used by other companies: Buy them breakfast, surprise employees with pastries, or a breakfast bap in the morning as a gesture of appreciation. Give away company merchandise such as water bottles. Provide educational rewards, for example sending them on a course lets employees know you’re invested in their long-term success and continual development. Boost mood with plants – plants in a office also help increase productivity and happiness. Buy new office equipment, upgrading their lap top or providing an ergonomic keyboard and mousepad are easy and low cost. Recent surveys have indicated that people are seeking other work-life balance benefits from their employees too and these can help offset restrictions on pay increases. Download our salary guide from the toolkit for some alternative options to pay reward such as hybrid working. Use the guide to compare how competitive your salaries are in the local areas of Staffordshire and Cheshire. – Follow up Plan to check in with the employee at a later time to see if they have questions or want to discuss further. Follow-up conversations also give you the opportunity to check on the employee’s progress working towards goals. Share notes from the review with your employee after the review, so they have a copy to review before next year’s review too. Although Annual Performance reviews are a really valuable tool for managers, they shouldn’t be used instead of more regular conversations, catch ups and reviews with your employees. There’s good evidence that shows it helps to give frequent and immediate feedback throughout the year to keep your employees engaged and striving to improve their performance. Top Tips Do… Take notes on performance throughout the year – it’ll make it easier Prepare notes for the review and what you’re going to say Focus on being positive Try making negatives into areas to improve Choose a suitable place with no interruptions Get employees to review themselves Listen and show you’re listening to the employee Share the review notes beforehand, so there are no surprises Get feedback from others for a balanced view Ask lots of questions to encourage the employee to talk Be responsive Recognise your own blind spots and prejudices Make new objectives during the review Share notes of the discussion after the review Don’t… Focus entirely on the negative Don’t associate constructive feedback with specific individuals Don’t spring the meeting on your employee Don’t interrupt or show impatience Don’t take over the discussion, it’s a conversation not a dictation Forget to follow up More Support If you’re planning reviews, use our Performance Review Toolkit to help you prepare. Check out our salary guide which will help you assess how competitive your salaries are in Staffordshire and Cheshire. The guide also gives you suggestions of other benefits you can offer employees. Download our It’s not all about the money infographic , which shares what benefits are valued by candidates and how businesses are responding to retain their talent. Give us a call on 01782 338787 for more support or email contact@appointmentspersonnel.co.uk.

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