A tendency to put off performance reviews belies their worth to both sides. Photo / Getty Images
A process which commonly takes place at this time of year is one employees either welcome or dread: the annual performance review.
Paul Robinson, director of recruitment specialists Randstad New Zealand, says it's the ideal time for employers to give constructive feedback, assess and set goals, check in on satisfaction and engagement levels and create an understanding of mutual expectations in terms of productivity and performance for the coming 6-12 months.
The temptation by employers to overlook or delay mid-year performance reviews is real, but could prove a costly mistake, says Jane Kennelly, director of Frog Recruitment.
The focus on tackling the hard measures and key business drivers can take precedence. However, the purpose of the performance review is not only to monitor performance, motivate staff and improve company morale, but to assist a company in achieving its objectives, she says.
Performance reviews are a vital communication vehicle with benefits including reduction of staff turnover, retained company information, and increased job satisfaction, buy-in and engagement, business performance and profitability.
"Employees both need and want feedback," says Kennelly. "The performance review creates a structure to look at promotion, training needs, career goals and goal setting. Well developed staff will perform their jobs to the highest level and are more likely to be proactive, productive and resourceful, which in turn helps give a company a competitive edge."
Kennelly says employer brands are built both internally and externally, and that attracting and retaining the right talent within a business is a critical aspect for success.
"A commitment to feedback within the review process is a tangible way for organisations to build a positive, transparent and recognition-driven culture," she says.
Preparation is key for both employers and employees before going into a performance review. "This is not a place to 'wing it'," says Kennelly. "Homework is needed as well as facts. Well documented goals and expectations should form the basis of each review, with no surprises. Employers should be specific and stay on task."
Employees should make sure they list all their achievements and prepare questions in advance. Kennelly says it helps to be able to translate accomplishments into benefits to the employer, for example in saved dollars or decreased customer complaints.
Kennelly recommends employers keep their emotions in check and remain neutral to ensure the process is effective. "Stay cool and calm when providing constructive criticism," she advises. "Be sure to keep the conversation non-personal and business-like. Humiliation is to be avoided as it will reflect negatively on you and your reputation. Provide the employee with time to respond to your criticism, as they might want to explain or clarify. Be a good listener."
Employers should list specific opportunities for improvement because they will want to deliver real ideas the person can use to improve performance. "This is the ideal time to discuss training, staff development or mentoring," says Kennelly.
Employees may not find it easy to ask for a promotion during the review, even if they feel they're due for one. "Even when the courage is mustered, there are no 'magic pills' that will guarantee your success but by being prepared and conducting the process in a professional manner, you will most certainly dramatically increase your chances," says Kennelly. "Emphasise the additional value you have provided and the areas you believe you can master. Outline what else you could add to your role. Prepare well and have your facts ready."
A delicate situation can arise if an employer doesn't feel an employee is deserving of a promotion but, managed carefully, the hurt and disappointment can be minimised. "While it's important to be honest, it is crucial to reassure the employee, keep things positive and focus on areas that can be developed rather than areas that were lacking," says Kennelly.
"Overview their strengths and discuss a plan for how they can grow and improve. Finally, discuss possibilities for advancement. People like to feel they have prospects."
If asking for a pay rise, Kennelly says it makes sense for employees to research the organisation's way of managing pay increases. She advises them to assess their own performance. Have they earned extra revenue or saved the company dollars? Received great customer feedback or met tight deadlines? Suggested solutions or improvements? Demonstrated initiative or worked extra hours voluntarily?
Kennelly says companies are still under pressure so the requested increase needs to be reasonable. She suggests employees check with agencies and look at recent online salary surveys to measure their worth against the real market.
A request for a raise may have to be turned down, and in this case Kennelly recommends honesty as to why, but with an assurance that it is not because an employee's work has gone unappreciated.
"If a raise cannot be awarded, offer the employee other rewards for a job well done," says Kennelly. "Non-monetary rewards could include paid time off, better benefits, a more flexible work schedule or whatever other perks are fiscally viable at the time."
The final point to cover in a performance review is goal setting.
In preparation for this, employers should know the organisational goals and their own managerial goals in order to translate them to the team and the individual.
"Avoid setting unobtainable goals," Kennelly says. "This is very de-motivating and can result in performance issues, so realistic goals that see attainments within the employee's control are the way to go."