Effective Performance Evaluations Is Not an Oxymoron

Performance evaluations, reviews and assessments have been causing some talk by the HR water cooler these days.

Currently, most performance evaluations are executed yearly, performed either on a common anniversary date, around the hire date of each employee, the beginning of the calendar year or the beginning of the fiscal year for the organization.  Typically, a salary increase is associated with the evaluation and is contingent on the rating of the employee.

Human resources’ negative perspective of this task is not exactly discreet.  The main reason that HR professionals believe that the yearly evaluations are not effective at appropriately assessing an employee is because they are performed only yearly.  Gauging an employee’s performance for an entire year’s worth of work at one point in the year is not an efficient way to provide feedback, especially when compensation increases are tied to it.

These annual reviews are meant to be a summary of the regular evaluations that managers should be having with their staff.  Evaluating on a regular basis and providing feedback to the employees not only improves overall productivity but can set expectations for all parties involved, help employees see how their work contributes to the bigger picture of the organization and increase work satisfaction.  Company performance relies on employee performance. 

And Here Lies Issue One A common fault is that as HR professionals, we don’t always have a system in place to train managers well enough to provide proper evaluations.  The intent of the evaluation process is to deliver quality feedback on a regular basis, but if managers are not qualified to coach and evaluate employees, we are sending them in to do a job they are not prepared to do.

However, HR professionals realize that there is a need to train managers on the expectations of regular evaluations so that the evaluations, or coaching, occur at appropriate intervals.  This training/coaching could go in a few different directions, but the easiest yet usually most expensive route is to outsource professional development.  Training in general is expensive, but multiply the cost across the number of managers and you could see a portion of your budget getting swallowed away.

A less expensive route can be found in the mentoring process, where seasoned managers mentor the less experienced managers on how to provide proper coaching to their employees.  The problem with this is time.  Your mentoring managers have their own workload to perform, adding training to their plate might not always yield the best results.

One way companies are trying to combat the cost is to move to online performance evaluation software programs.  These programs may require regular check-ins with an HR person, managers and employees, allowing for self-reporting, reviewing and rating on the employee’s competencies.

Issue Two: Stagnation When the employee has been at the organization for an extended period of time and has sat through multiple performance reviews with the same stale information, it then just becomes an exercise that is not showing the true benefit to the employee.  Add in the coaching aspect from managers and you will find that changes can in fact be made.  The ‘stale evaluation’ is a common occurrence and is why the HR community has expressed concern for change with performance evaluations.  Having the manager take a vested interest in the employee’s regular performance (from an employee that would like to keep their job at a minimum) will bring about a fresh perspective and may even generate some ideas from the employee themselves.

Let’s Get Started In order to help the evaluation begin, have the employee provide self-observational feedback, a list of achievements and suggest goals that are then reviewed by their manager.  The point is for the employee to describe how well they perceived that they did at their work, and to set goals/objectives to be accomplished by the next annual performance review.

The manager can then review the self-assessment and further evaluate the employee on established competencies. There are multiple ways to conclude, but HR can rate based on the provided information and then determine rating for overall achievements.

Next, the manager should be able to determine an overall rating for the employee and submit the documents back to HR.  Once all the ratings are in for all the employees, HR can determine pay based on the pool of money available and everyone’s ratings.  Communication between the manager and the HR department during the entire process is paramount.

Other organizations are looking for ways to try something different, the example being GE, Gap and Adobe doing away with traditional performance evaluations all together and trying a mixture of methods to give advice and documentation to their staff.

Our Take-A-Way Please note that the evaluation process is dependent on HR to be in regular communication with the organization’s managers regarding the employee’s work performance.  The reason for having evaluations is to provide documentation on employees so management can make compensation and future career path decisions as well as to notify an employee on their overall performance regarding their contribution to the organization.  It allows the employee an opportunity to know and provide feedback on their work efforts.  It all comes back to the questions of “are we providing the feedback to let employees know if they are doing a good job?”

Comments Necessary To this open-ended issue, I pose a few questions for our members to answer.  If no performance evaluation- then what?  Information or formal evaluation on a regular basis?  What are the changing methods you are using and what are you trying to drive them to?

About our authors:

Pamela Smith is the HRA-NCA Survey Director and oversees the Compensation and Benefits Committees in the annual production of the HRA-NCA Compensation Survey, Benefits Survey, Government Contractors Survey, and Salary Survey reports.  She also oversees production of the HRA-NCA Compensation & Benefits Summit.  By day, she provides leadership in developing and executing human resource strategies as the VP of Human Resources for National Association of Home Builders.

Maria Gupta is resident marketer for HRA-NCA and their survey products.  Touring local HR groups in the DC metropolitan region provides her with the pulse of what is current water-cooler talk within the HR community.  By day, she provides marketing expertise as Director of Marketing at AKRON Inc, the administrators of the HRA-NCA surveys.