Performance evaluations are a crucial part of the overall performance management process within any organization. If done correctly, employees will become more engaged and more trusting in their organizations, providing for a healthier culture and a more profitable organization. If done incorrectly, employees may become disengaged, and will likely begin to look for employment opportunities elsewhere. Generally, the performance management process starts with the creation and implementation of a well-defined job description, then the assessment of an employee’s performance compared to the essential duties and responsibilities as stated in the job description, which then intertwines with a merit-based performance increase that aligns with a salary administration plan. While this is a very broad definition of performance management, making sure that performance evaluations are completed fairly is essential to its success overall.
More and more, employees are seeking out candid and transparent feedback and discussions about their performance and how they may be able to do better. If it is not conducted properly and effectively, the performance review process tends to do more harm than good. According to a 2019 study completed by Gallup, only about 10 percent of U.S. workers felt engaged after receiving negative feedback on the job. And nearly 30 percent were so put off by a negative review that they began actively looking for a new job. In addition, a 2019 Workhuman Analytics and Research study found that 55 percent of workers believe that annual reviews don’t improve their performance.
There are two types of performance evaluations. The first is a standard form-based evaluation where employees are given a numerical rating based upon whether the employee achieved (or didn’t achieve) a job-related competency, which is typically related to the essential duties and responsibilities of the job. The second is a documented conversation that is conducted by a manager with an employee on either a quarterly, semi-annual, or annual basis to talk about the employee’s performance and goals that the employee and the manager have discussed that are tied back to the essential duties and responsibilities that are stated in the job description. Yes, the first is really a process that looks back at performance and the second looks forward at expected performance. Deciding upon which one is best for your organization depends upon the organization’s culture and how well trained the managers who conduct performance evaluations are on the process that they are engaged with at the time. However, whichever type of performance evaluation is used, managers need to remember to avoid the following nine pitfalls when conducting and/or completing the performance evaluation.
- Failure to Seek Input – The manager who is evaluating the employee’s performance should actively seek input from the employee with regards to their performance and work habits, or otherwise the evaluation will be one-sided. An effective performance evaluation involves the employee in establishing performance goals and obtaining buy-in.
- Evaluation is Not Timely – The performance evaluation should be done on time or the employee will believe it is not important to the manager, or the organization.
- Failure to Invest Enough Time – The manager should allow enough time to prepare and conduct the performance evaluation with the employee. One of the biggest mistakes managers often make is to try to prepare for and conduct the performance evaluation in a short-time frame.
- Lack of Verification – The manager fails to take the time verifying and observing the employee’s job performance and work habits.
- Devil Effect – The manager believes employees are all poor performers and that they have poor work habits, without having objective data to base having such low ratings.
- Halo Effect – This occurs when the manager bases a rating on one prominent characteristic of an employee. The Halo Effect results in all employees receiving a positive evaluation.
- Recency Effect – The manager bases the rating on work performed, or a work habit displayed most recently rather than basing the evaluation on performance or work habits over the length of time being evaluated or between evaluations.
- Central Tendency – This is the tendency of the manager to rate most employees’ performance near the middle of the performance scale.
- Leniency – This occurs when the manager groups the ratings toward the positive without having objective data to do so.
Managers who are responsible for preparing for and conducting performance evaluations need to remember that there are two things that employees may be evaluated on. The first is actual job performance related to the essential duties and responsibilities as defined in the job description. The second has to do with the employee’s work habits. These are things like absenteeism, tardiness, dependability with regards to meeting deadlines, physical appearance, etc. Employers need to remember that evaluating an employee based upon their attitude is not acceptable unless it is directly related to their job performance with a specific task and/or a work habit. Making sure that there are facts and specific examples that relate to each job performance situation and/or work habit is essential in order to make sure that the statement is considered to be legally acceptable. Remember, performance evaluations become legal documents and are discoverable by a court, once they are prepared and discussed with the employee.
Evaluating an employee’s performance should be an ongoing process, meaning it should not take place just one-time per year. Managers and employees should be discussing performance-related issues and work habit-related issues well in advance of a formal performance evaluation, so that the employee has the ability to adjust and improve. It is proven that feedback is more effective when check-ins are more frequent. Workers who check-in with their managers at least weekly are five-times less likely to be disengaged than those who never check in, or don’t check in as often, Workhumans’ 2019 Analytics and Research study found. In essence, an employee should not be learning of an issue that the employer has with either their job performance and/or a work habit at the time of the formal performance evaluation discussion. If there are job performance and/or a work habit issues that arise, managers should be utilizing a progressive disciplinary action process, performance improvement process (PIP), or something of the like to address problems, issues, or challenges with employees in advance of the formal performance evaluation. If the employee does not improve over time and with support and coaching from the manager, then it may be time for the employer to involuntarily terminate the employee. Thus, the last pitfall to avoid with completing a performance evaluation is as follows:
- Failure to Complete an Action Plan – The manager should provide a work improvement plan which encourages the employee to correct performance deficiencies and poor work habits, at the time the deficiency occurs or is witnessed by the manager.
Many organizations have access to Human Capital Management (HCM) software or a Human Resource Information System (HRIS) that is able to aid their managers in tracking the performance management process and the performance evaluation process for all employees. Adapting the software and/or a system and the tools within them to meet an organization’s needs is sometimes a challenge. However, if utilized appropriately may take some of the burden of the process off of the manager, thus making is more enjoyable for the manager to prepare for and conduct the annual performance evaluation with each employee. Like anything, with a successful implementation and training of all managers on how to utilize the software or system, the organization’s employees will be the benefactors over time, which may ultimately lead to a more successful and profitable organization.
While performance management may not be at the top of the list of things that managers are excited to do, it really should be. Well-rounded performance management will develop a more engaged workforce that are performing to the best of their abilities. Managers should be having more frequent conversations and check-ins surrounding their employees’ performance. In doing so, the organizations culture will be healthier, and employees will be more productive and efficient, ultimately resulting in a more profitable organization.
For additional information on performance evaluations and the performance management process, please contact us at www.newfocushr.com.
Written By: Patrick McKenna, SHRM-CP
HR Consultant
09/12/2022
