Creating an Employee Evaluation System That Works
And Reduce Employee Turnover in the Process...
For the most part, personnel evaluations are to good business what bleeding with leaches is to good medicine – a practice mistaking activity for benefit. If your company does not understand how to get actual benefit out of personnel evaluations, don’t schedule them. This would be unfortunate, however, as a good system of personnel evaluations can lead to increased moral, and can show benefits that go straight to the bottom line.
To garner these benefits, business owners must take a hard look at what they hope to accomplish through personnel evaluations. If the evaluation is solely used as a mechanism to document performance come bonus or termination time, the business owner is seriously missing the boat. While documentation is important, the primary benefit to an evaluation system has nothing to do with employee discipline. It has to do with value.
In essence, personnel evaluation can be used by the business owner as a review of business practices and personnel decisions. It is virtually inevitable that employees, particularly those on the front line, know more about the day-to-day operations of any business than does the owner. Consequently, the evaluations should be at least two-way, where the employee is encouraged to provide suggestions and insight into what would make his or her job easier and more productive. The evaluation should be a substantive dialogue in which both participants described expectations and performance of the other. Correctly structured, the evaluation can be the best method of matching person to job, job to function, and function to profit.
Each participant must be adequately prepared for the evaluation. In many cases, this should involve a written questionnaire to be completed by the employee, as well as a standardized evaluation form to be completed by the employer. The integrity of these forms is paramount. If the employee feels that he or she is being evaluated on either unfair or inapplicable standards, the evaluation will be nothing but an exercise in lowering moral.
Once each participant has prepared for the evaluation, the conversation should be structured in a non-threatening exchange designed to evoke the most benefit from the meeting. Both participants should leave the meeting with a clear understanding of the other’s thoughts and positions. In addition, a follow up session, however brief, should be scheduled to air out the inevitable “things I wish I had said.” This is especially true where the employee’s evaluation may be construed as negative in certain important respects.
In addition to content, scheduling is also a very important consideration. While many if not most businesses schedule annual evaluations, it is frequently advisable to schedule smaller, more frequent meetings – perhaps quarterly. The benefit is not only the reduction of the intimidation factor, but also the greater likelihood that small issues will be caught and dealt with before they develop into large problems.
Business owners with fewer than 10 employees often dispense with evaluations in the belief that close day-to-day contact eliminates the need. While this is true to some extent, there is still a benefit to be had by a scheduled time to discuss performance. Often, particularly in small enterprises, employees are so busy with day-to-day concerns that they do not find the time to consider and address larger, more fundamental issues. Scheduled evaluations provide this time; and it is even more crucial where the employees are a tight-knit and happy group. The reason for this simply lies in the greater likelihood that employees would have and be willing to provide insights into better business practices, if only a specific time were scheduled to discuss them.
Finally, as alluded to at the outset of this section, documented personnel evaluations are invaluable in substantiating reasons for disciplinary actions, demotions or terminations. Few pieces of evidence are more powerful than paperwork showing that the employee had been repeatedly advised of unacceptable performance when termination becomes an issue.
Bottom Line: Every business owner should establish a well thought-out evaluation policy which matches the tenure and culture of the company. What works for General Electric will not work for a four person landscaping business. Nevertheless, both companies can reap huge rewards and avoid large pitfalls with a well-crafted system.
