Performance Appraisals - The dreaded annual event

Performance Reviews — The Dreaded Annual Event

March 1, 2003

No review process is perfect, but performance reviews can be improved.

It’s not usually a favourite task, but employee performance reviews are an important tool in a manager’s repertoire.

Ideally, performance reviews should assess how employees are meeting the goals and expectations set for them over the evaluation period. It also provides an opportunity to set new goals, develop training plans and expose the strengths and weaknesses of both employees and managers.

Performance reviews can be a very effective management tool but, like all tools, they must be used properly or they lose their value. In many cases, according to Dr. Maria Rotundo, a University of Toronto management professor, many employee reviews are ineffective. “Part of the reason is that many managers don’t like the performance evaluation process and they don’t understand it. It’s foreign to them.”

For three years, Dr. Rotundo studied the way North American managers address performance reviews. The results of her survey of 504 North American managers were published in the American Psychological Association’s Journal of Applied Psychology.

The problem with performance reviews

The root of the problem is that many organizations do not plan for a formal performance review process. It’s left to individual managers to develop their own criteria, so employee reviews are applied unevenly. “Because organizations don’t have consistent criteria to rate their employees,” says Dr. Rotundo, “two employees working for two different managers engaging in the same job, exhibiting the same behaviour, may receive completely different ratings depending on who their rater is. Organizations must ensure that managers have the same frame of reference. A manager in company “A” must be able to recognize what constitutes an excellent employee.”

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Making sure that managers know the frame of reference and how to apply it is very important. So managers must be trained.

Dr. Rotundo admits that no review process is perfect. “There will be variations. But if a framework is in place and managers are trained, employees will be evaluated fairly and consistently.”

Communication among managers is another key to an effective performance review process.

“Managers should be given the opportunity to regularly discuss performance reviews with other managers,” says Dr. Rotundo. “For example, they can discuss cases of effective and ineffective behaviour that they’re seeing and how they would rate each behaviour. Keeping managers on the same page is half the battle.”

Most organizations conduct performance evaluations once a year. Managers can’t be expected to remember everything that’s happened in the workplace over that year. “We have to train managers to think about performance all the time,” Dr. Rotunda says.

To do this, Dr Rotunda encourages managers to keep a diary. “It doesn’t have to be formal or fancy, just take a piece of paper and keep track of effective or ineffective behaviour as it happens.”

Much of the fear and trepidation generated by the performance review process can be relegated to the pages of history, she says. “Once managers and employees understand the process, the performance review will be viewed favourably.”

Of course, performance-related issues should be addressed with an employee as they arise, not filed away for the annual review. Regular interventions by managers and supervisors let employees know that the company is paying attention and offer an opportunity to resolve problems before they grow worse.

Once the cause is determined, employees should be challenged to propose ways to change problematic workplace behaviours, which invariably means they must either start to do things differently or stop doing certain things.

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