How Am I Doing? A Look at Annual Performance Reviews

The information contained in this article is not intended as legal advice and may no longer be accurate due to changes in the law. Consult NHMA's legal services or your municipal attorney.

It’s that time of year again—time for the annual performance review.

The folks in human resources are asking about it, and you’ve found that you’ve put off the annual review process yet again. You know it is important, yet it doesn’t quite make its way to the top of your to-do list.

So why do we, as employers, dread this annual exercise?

We want to be liked. It’s human nature. Most of us want others to like us, so sharing less than positive feedback worries us that the person on the receiving end will see us in a negative light.

Conflict avoidance. We know the importance of sharing constructive performance feedback, but we don’t want it to be taken the wrong way, to put the employee on the defensive, or, worse yet, get into an argument.

Not keeping track. Writing about performance annually is daunting if you haven’t been having regular conversations with your team about their performance. Trying to recall what occurred throughout the year is nearly impossible if employee performance hasn’t been noted along the way.

No raises this year. Many employees think an annual review means a pay increase, so how do you deliver the review message when there is a salary freeze?

Lack of training. Proper communication skills are crucial to the productiveness and effectiveness of an annual review meeting. Many employers are expected to know what to do, but without proper supervisory training regarding giving and receiving feedback, a stressful environment is created for both the employer and the employee.

You may be asking yourself, “Why should I care about the performance review process?”

If your municipality is doing the standard annual review with a 1 – 10 rating scale and nothing more, you may have a good argument not to care. However, this “old school process” is too subjective and not meaningful enough to be useful for either employers or employees.

Let’s take a look at why performance reviews can be useful.

Improve employee performance. To promote efficient local government, we need employees who are engaged and perform well. Many employers assume employees should instinctively know what is expected of them in their work, yet we often fall short of defining and effectively communicating our expectations to our team. Using the performance review process to communicate expectations is one step, but you should also consider integrating the job description into the performance review process to make it an even more effective way to manage employee expectations.

Encourage communication. For those employers who think they are too busy to communicate regularly with their employees, the annual review can force those employers or supervisors to have at least annual face time with their employees. The goal here is to also encourage two-way communication between the employee and their direct supervisor.

Document performance. Sadly, not every person we hire will work out. Should it come time to terminate an employee, one of the first things we take a look at is the annual performance review/all performance documentation. The reason for this is should a terminated employee file a claim, the Department of Labor (DOL) will ask to see the documentation to support the termination decision and look for documentation that demonstrates the performance concerns were communicated to the employee and the employee was given an opportunity to adjust their performance. The DOL’s perspective is if it’s not in writing, it never happened.

By now you’re likely asking yourself, “How can we improve our annual review process and make it more meaningful?”

Culture & Values. In developing performance review processes for employers, the first step we take is to gain an understanding of both the employer workplace culture and core values. Without incorporating aspects of your workplace’s culture and values into the review process, it has less chance to be meaningful.

Measure behavior. This is where your core values come into play. By measuring employees against the expectations outlined in your core values, you are looking at the total person including how the individual behaves, not just the duties performed. Experience has shown that when an employee is terminated, it is typically because he or she did not “fit” into the organization, rather than just a failure to perform work up to the company’s standards. Also, by using your core values during the interview or hiring process, you increase your chances of having that individual fit better into your organization long term and reduce the likelihood of turnover.

Increase frequency. If you only have one take-away from this article, it is to meet one-on-one with each employee at least quarterly. As an employer, your main role is to help your team be successful, and without frequent communication about performance, maximum success will elude you. An added bonus is that these quarterly meetings will take the weight off of the annual review itself. Employees should never be surprised during the annual review. If you regularly conduct performance discussions with your employees, the annual review is simply a “look back” and a review of conversations you’ve already had over the past 12 months. Plus, by the time the annual review rolls around, the review will write itself due to those regular meetings you’ve been having with each team member.

Goal setting. The standard review tool looks back over the prior year; however, setting goals is about looking forward, which is much more positive message. These quarterly meetings provide a great opportunity to review employee goals. Is the employee on track? Does he or she need support? Will the employee complete goals in the timeline set?

Professional development. Your role as employers is to have employees who are engaged and successful. In addition to regular performance feedback, understanding your employees’ career goals and doing what you can to help support them in these goals will increase your rapport and increase their commitment to you.

Request feedback. Another way to foster this two-way communication is to ask your employees for feedback about your performance and be open to blind spots you may have. Ask questions such as, “Do I communicate expectations clearly?” “What are your expectations of me as your employer or supervisor?” While its true employees may be nervous to give you feedback, the fact that you are asking for feedback sends a strong message that you want to improve too.

Once you incorporate the recommendations above, annual performance reviews will be less burdensome and will, as a consequence, rise up from the bottom of your to-do list.

Delise West is president and founder of Human Resource Partners, an HR outsourcing firm that removes questions and doubts about HR compliance and improves employee productivity for small/medium-sized businesses through its customized HR outsourcing model. Human Resource Partners is located in Concord and Dover, NH and supports clients in NH, northern MA and southern ME.  Delise can be reached at (603) 749-8989 or through www.h-rpartners.com.