Many managers have a love/hate relationship with performance reviews. They understand how these reviews can help employees improve in their jobs with targeted goals, but they dread coming face-to-face with employees when there is a behavioral or performance issue that needs to be addressed.
So what are performance reviews?
“For most organizations in the United States, performance reviews are used to support decisions related to training and career development, compensation, transfers, promotions, and downsizing or termination. jobs,” says the Society for Human Resources Management (SHRM) in its online toolkit “Employee performance management“Typically, the performance appraisal process includes setting clear and specific performance expectations for each employee and periodically providing informal and/or formal feedback on employee performance against these stated objectives. .
The group adds that recent trends are moving away from a formalized process and “focusing on more feedback and coaching”.
Recent trends are moving away from a formalized process and “focusing on more feedback and coaching”.
For wholesale distributors looking for tips and best practices for conducting effective performance reviews, the National Association of Wholesaler-Distributors (NAW) offers a Section “Developing your workforce” on its website.
Jia Wang’s performance reviews article says: “[R]esearch evidence tells us that to increase the effectiveness of performance appraisal[s]we have to extend
In other words, managers and subordinates having positive and healthy working relationships result in feelings of trust, support, loyalty and commitment. When employees receive more positive reinforcement, they may view the performance review process as fair, even if they receive an unfavorable review.
“How a supervisor provided appraisal results affected subordinates’ perception of the entire performance appraisal system,” the NAW article notes. “If the supervisor shared performance ratings and feedback in a timely, candid, respectful and unbiased manner, supported by detailed explanations, the employee perceived the process to be fair and accepted the results positively. [D]Dissatisfaction indicates that employees’ goals have not been met, as evidenced by the feedback they receive.
Coaching and periodic feedback
Unfortunately, the performance appraisal process is not well organized in many companies.
“Typically, managers scramble at the last minute to document each team member’s accomplishments and areas for improvement to provide an objective assessment,” explains Oracle. “They then struggle to find information on individual performance. In the end, they arrive ill-prepared for the annual interview and adopt a checkbox approach without realizing the poor impression this makes on the employee. This is a time consuming process every year and does little to improve performance.
A once-a-year approach can catch an employee off guard with an unfavorable review, especially if the manager is unprepared.
“The fundamental principle of performance appraisal systems is that people perform better when they have concrete goals, continuous feedback, and clear links between individual performance and important organizational goals”, explains the American Supply Association. “All employees should have a clear understanding of what is expected of their job performance, how their job performance is measured, how well they are meeting performance expectations, and how which they can improve their performance at work.”
Streamlining this process through software is an option. At the very least, a few informal chats throughout the year are beneficial, whether it’s congratulating the employee on achieving a goal or expressing concern about unusually poor performance.
“[E]employees do not value a single performance review,” the Oracle article notes. “In order to develop them and improve their performance, they need to be coached throughout the exam period, evaluated and recognized on smaller achievements. Coaching provides a better opportunity to improve performance because employees can see how the assessment of small accomplishments adds to the overall assessment.
SHRM agrees – an effective performance appraisal system includes a “continuous and timely feedback process throughout the appraisal period so that employees know how they are doing and what is expected.”
NAW notes that small-to-medium sized distribution companies “fall behind other industries in performance management.” It highlights five general guidelines for wholesale distributors to set up a effective performance management system.
1. Clarify the general objective. What do you expect from the performance evaluation? Make sure you have this in mind when you start the review process.
2. Set SMART performance goals. SMART stands for specific, measurable, achievable, relevant and time-bound. Well-defined performance goals are important, but they shouldn’t be set in stone. As the business environment is constantly changing, objectives should be reassessed throughout the year.
3. Select the right performance metrics. There are four dimensions of assessment: generic traits, work behaviors, knowledge and skills, and produced results. “[U]understand the pros and cons of each approach and select one, or a combination, that will match your performance goals and organizational needs,” says NAW.
4. Focus on the future. “While looking back can help you predict future performance, it’s essentially a reactive approach,” NAW notes. “Therefore, instead of focusing on what didn’t work well in the past, redirect your attention to what can be improved in the future.”
5. Solicit employee feedback. This is where the quality of the relationship between manager and subordinate is directly correlated to the perceived effectiveness of the performance appraisal. “If employees react negatively to how their performance at work is measured, they are less motivated to perform better,” says NAW.
Wholesale distributors must balance employee satisfaction with company goals. With ongoing coaching and feedback, employees won’t be caught off guard during the formal performance review; they will know what is expected of them at all times. And managers will have continuous insight into how subordinates are achieving their goals or experiencing setbacks.
Kelly Faloon is an editor for Contracting Business magazine and director of Faloon Editorial Services. Former editor of Plumbing & Mechanical magazine, she has over 20 years experience in the plumbing and heating industry and over 30 years in B2B publishing. Faloon holds a journalism degree from Michigan State University.