Be an Ethical Entrepreneur, Marketer, and Business Builder

Employee Performance reviews should be like a GOOD wedding anniversary

If you’ve ever been responsible for giving a performance review, my title doesn’t sound anything like what you picture or what you’ve ever done, right? After all, performance reviews are how we determine pay raises and you can’t exactly throw a celebration if their performance just isn’t up to par… Correct. However a performance review isn’t just about how well they’re doing… It’s about how well you, the manager or leader, is doing…

This is one of my longest, yet most powerful blogs so read all of it and offer your comments whether you agree or not. 🙂

Let’s start at the beginning. What are the goals of a performance review in most instances:

  1. Assess Performance
  2. Implement Raises according to number 1.
  3. Set goals for next year.

If those are your only goals, you may be missing the most important part… The primary goal of a performance review should be to determine if you’re getting the absolute best out of your team member and if not, what can be done to do so. That doesn’t mean you should ignore a performance assessment…

Before we get to the performance assessment, it’ crucial you, the leader, understand that according to First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham, the number one factor that affects employee satisfaction and performance is their relationship with their immediate supervisor. That’s significant enough that it needs to be repeated. The only way you will ever get the best from a team member is if they have a strong relationship with you, their boss. That’s number one. Keep that in mind when we review everything else in this blog. Your ability to foster a strong relationship is the key to this puzzle… Is your performance review designed with that in mind??? We’ll get back to that in a bit…

Let’s start with the performance assessment by considering how we measure success in school. Like it or not, all of your employees went to school at some point and were graded according to his or her performance with either letter grades or percentage grades. That’s how we teach our children to know if they are doing well or not… In sports we learn that points, wins, and stats for your position are the proof of doing well. And then we move into the “real world” and people like Michael Masterson suggest your top 7 people in a Stage 1 organization should have a job description of “taking care of customers”. Or something equally vague but in theory “empowering”. Even if you do have a job description, it’s loaded with vague descriptions like, “dress professionally”, “interact positively with coworkers”, “present our products in a positive manner”. So we teach our children (and every one of your employees were once grade school children) to grade and measure performance down to fraction of percentage results on tests and in youth sports and then we put them in the work force and tell them to do a good job. So you have 2 options… First, you can attempt to reform the schooling system to implement more fuzzy methods of measuring performance… OR, Secondly, you can develop more concrete ways of assessing performance with actual numbers and grades. Why do you need to do this? Because according to Buckingham, under-performing and unhappy employees are partially that way because, “they don’t know what’s expected of them at work.” In other words, when they leave work for the day, they have only a vague idea of whether they did a “good job” or not. “Well, I didn’t wreck my truck and the boss didn’t yell at me so I must be doing a good job.” In some form or another, that’s how the majority of the workers in America assess their days.

This blog doesn’t have the time to address how to develop these performance benchmarks and report cards since its focus is performance reviews, however I’ve discussed it a bit before in a previous blog.

So now that you have the Key Performance Indicators, this portion of the performance review becomes almost moot. Why? Well do you remember in school when you got your report card at the end of the quarter or semester? Were the results a surprise to you? Sure you might wonder if you were going to get an A or B since you were on the border, but you knew you weren’t getting an F. Well the same becomes true at work. When you go down the list during your annual review the results are mostly expected and so aren’t a negative even if they are negative. Moreover, if they’re failing in every important category then shame on you because you should have done them a favor and gotten rid of them a long time ago. If they’re failing in some areas but doing very well in others that gives you a great opportunity to be positive about their strengths and then positively ask (don’t tell) how they can do better in the other areas.  Or you can always readjust their job description so they’re only doing the things they are really good at and drop out the things they are struggling with. Review my blog on hiring based on the job description you write after the interview for more details.

Now it’s time to determine raises. Well do you think it’s going to be easier to create an incentive-based pay system AND accurately determine fair and reasonable raises if everything is outlined on a report card? Yes. So implementing raises also becomes a non-issue. This is almost too easy isn’t it?

The most important part, however, is getting the best out of your team member. I also mentioned that very long, detailed, and exhaustive studies show that the number one contributor to that is the team member’s relationship with their direct supervisor…  Which means, to get the most out of your performance review you need to know how your relationship stands AND you need to strengthen it! Are you starting to see how making it like a good wedding anniversary, in other words, an exciting celebration of a great relationship, is crucial. How do you improve this relationship?

  1. Focus on positive and not negative. Look, if this is an annual review and you’re bringing up a screw-up from 8 months ago, you just aren’t getting the point. When someone screws up, you address it IMMEDIATELY along with a way to prevent it from happening again and you forget it (of course you can keep it in their company file in case the relationship ends up in divorce later). Think of it this way, is your anniversary dinner going to be a lot of fun when you sit down and your spouse brings up all of your screw-ups from the last year? Of course not! So why would you do that in a review where you’re main goal is to build a relationship???
  2. Have quarterly performance reviews. Do you honestly think you can build a relationship with an annual assessment? That’s just silly so stop it.
  3. Use the 12 questions from First, Break All The Rules. You may be afraid once you read them because they have nothing to do with the employees performance… They have to do with how well YOU are doing at providing them with an environment in which they can excel. Hopefully by now you understand that that is exactly what we want.
  4. Call it a Quarterly Chat so people don’t fear it and actual look forward to receiving 20-30 minutes of undivided attention from their boss.

Think of this from a different angle… Think for a second about your favorite 3 teachers from grade school. Do you have a good mental image? Are you smiling just thinking about them? Great! Now tell me, what grade did they give you in the second quarter when you had them? Uh…. You don’t remember? Well they were your favorite teacher why wouldn’t you recall how well they taught you? Because that wasn’t how they built the relationship with you! Teachers build relationships with students in many ways, but grading is not one of them. We understood as children that the grading was a necessary evil however it wasn’t what made us love or hate a teacher (usually). Right now I can think of teachers I liked who didn’t necessarily give me the best grades and ones I hated and had no respect for who gave me straight A’s. Why? Because I EARNED my grades based on my own effort however my relationship with my teacher was something she EARNED with me separately. Granted, if she was a terrible teacher and never actually taught me anything useful, that might taint the relationship. Think that might be true of your direct-reports as well?

That’s the context in which you need to consider your performance reviews. Assessments and raises should be tied to such clear definitions of performance that it’s obvious before you ever have your review what the results will be and those results will have no affect on your relationship. That’s not entirely true… Your team member will respect and appreciate you more for your direct, simple honesty.

Let’s say you’re on the other side of the coin and you’re the employee who is stressed because your review is coming up and you have no idea what to expect or if they’re going to bring up screw-ups from your past year one-by-one. Before you start looking for another job here are a few things you can do:

  1. Buy your boss a copy of First, Break All the Rules and tell them you read the book and thought they’d really enjoy it. If you think your boss is going take it as a personal insult as if you were saying, “You don’t know how to do your job so you need this”, it may be time to look for a new boss. Simply say you read it, were super impressed, and know they’re always looking for great new ideas so thought they might enjoy it.
  2. They will have some sort of checklist or score sheet or something to review you “objectively” with. Ask for a copy. Look, if you don’t know how you’re being graded, how can you do your best to get good grades? And that’s exactly what you should say to your boss if they ask why you want a copy.
  3. Review your job description and make sure you can highlight how you’re doing really well on each point (with specific stories to illustrate if time permits) and point out that you did make a few mistakes, but you aren’t making the same mistakes twice. You’re making new mistakes and the company mission, culture, or you job description (hopefully) indicates that you’re supposed to be innovative and even take a few risks and try new ideas. In other words, turn your negatives into positives.
  4. Ask to have reviews quarterly so you know where you’re standing throughout the year and can work to get better without having to wait till the end of the year when your raise is on the line.

The bottom line is this, you want to do a great job and you may need some help from your boss to determine exactly how to do that. That should be the focus of your review particularly if you feel you’re being unfairly reviewed and held back from raises. If none of those suggestions make any difference, it may be time to look for a new job because you obviously don’t have a strong relationship with your boss.

So whether you are the reviewer or reviewee (yep, just made that word up), you need to focus on ways to improve your relationship and the system your company uses for evaluations.

To your performance-reviewing success, Bryan

P.S. I’m aware this is a rather unique idea… If you don’t like it (or absolutely love it) leave me a comment to tell me why.

About Bryan Trilli

Entrepreneurial Junky is probably the best way to describe me. I've bought, run and sold 3 businesses in 3 different states and started a 4th. The first 3 were brick-and-mortar service-based businesses and the 4th does internet marketing for service businesses. My team at Optimized Marketing guarantees to double your business' internet contacts in just 90 Days.

Comments

  1. Hey Bryan,

    Do you think that using performance score cards and checklists work for highly skilled or technical jobs (such as software development) where each daily task is unique to the day before? I know you write a lot about and have good experience with small business, but do you think those ideas can transition to large corporations?

  2. In a word, yes! The size of the corporation or the nature of the work does not change the necessity for a system for separating good developers from poor developers. Granted, my focus has been small business, however, the underlying idea applies since human nature is human nature. From what I’ve read and studied, I’d bet the ideas will even apply across cultures.

    The checklists, grades, and tools you provide people will DRASTICALLY change depending on the nature of the work as Dan Pink points out in a video I discussed in a previous blog. However, even in the very dynamic, creativity-driven world of a Results Oriented Working Environment (ROWE), you can’t escape the fact that Results are the first step and have to be measured in some capacity.

    The goal with my recommendation for meaningful job descriptions (that relate to the company’s vision and mission), grades, and checklists is not to micromanage or pigeon hole, but the exact opposite. It frees people to focus on creativity within an easily understood framework. The book, How We Decide, talks about the paralysis our minds experience when we have too many options, choices, or possibilities. People are actually MORE CREATIVE and productive when they’re given structure and focus. Watch the video from the link above and I think it will clarify the similarities and differences between small, simple businesses and large, complex organizations that I mention in my response.

    Thanks for the comment and let me know if my response makes sense or you disagree.
    How does your company approach performance reviews, pay raises, and getting the most out of team members?

  3. I somewhat agree that performance reviews can be a good thing. If they are done correctly. If there are clear guidelines for how reviews and ratings relate to pay, bonuses, and promotions. That is really what employees what to know.

    Unfortunately my company has a pretty horrible performance review system. Rating categories are often vague and don’t relate to your job description or activities. Most employees are forced to do a self review and then the manager just reviews and signs it and gives you somewhat random numerical rankings in each category. As for bonuses, promotions, and raises, there is no clear standard on how they arrive at an amount. It’s like voodoo magic.

  4. Unfortunately Jon, That’s what I’m trying to stop since it’s so common. :-/

    Think you can use any of my suggestions to help improve your process? Or maybe you have some other ideas or things you’ve tried.

  5. I’m working on it :). I have tried to make my ideas known to my manager and those around me. I continue to make improvements to how I work to show that the ‘status quo’ is not how things always have to be.

    Because our process is so archaic, I have approached the situation from a different perspective. Research has shown that employees are happier even if their pay isn’t at the top as long as they have freedom, flexibility, and a good work environment. I have been pushing for the company to make changes in the areas that many managers have the freedom to, as they are currently chained down to the current employee appraisal process by HR.

    We will see how it goes :). Good luck with your businesses!

  6. Jon, Check out this book. Just finished reading it and it’s got some great ideas on how employees can improve a business from the bottom up.
    Heroz: Empower Yourself, Your Coworkers, Your Company

  7. Wow, very impressed Bryan. You know I’m sitting here thinking to myself I may have for the first time met someone outside of the IT business that actually thinks about small business owners the same way I do. You clearly ask owners and managers to challenge the status quo by looking at something like performance reviews in a new way. I think you analyze small business activities in a deep and analytical way and really get down to “what does this thing really need to do” and then come up with some smart and novel ways to look at and implement them.

    I think one thing worth mentioning is the idea of goal setting. Most “employees” are people uneducated in the “science of success” and so it’s often on the shoulders of business owners/managers to create and implement goal setting systems like a performance review.

    On a side note, an odd and perhaps coincidental trend I have noticed in the last 20-odd years as a software engineer and small business consultant: It seems that people with an IT background have been permanently “hacked” with a stronger moral and ethical compass and it’s sources are Silicon Valley where openness, sharing, flat systems (like TCPIP), freeness rule supreme. Am I off base on assuming this to be the case? Would love to hear your thoughts on this.

  8. Mayur, Thanks again for the input! Do you have a blog or website where I can read more about your ideas and business? It sounds like you have some novel approaches to business consulting/coaching as well. I can’t really take all the credit for being novel as I do “steal” and modify a lot of ideas from books, blogs, clients, and my own mentors. My strength is taking all of that information, applying it to the real-world, and developing systems to leverage it across multiple businesses. And I absolutely love doing it! 🙂

    You’re absolutely right about goal-setting. Most employees, as well as employers, have only a basic understanding of the “science of success.” At my business I tried a thing called “Expert Goals” to help each person become an “Expert” at some part of their job in the next quarter. One of these days I’ll blog a bit about the goal-setting process in more detail. What have you found has worked well in your personal experience?

    As for the ethics… It is basically a coincidence. Though my background was IT (started working professionally in the field at 17), my ethical and moral compass stems more from my Christian faith than anything else. Granted, it’s my sincere belief that being ethical in business is ultimately the most profitable path as I blogged about here: http://ethicalbusinessbuilder.com/2008/09/21/why-being-ethical-is-always-more-profitable/

    One of these days hopefully our paths will cross so we can chat and see what we can learn from each other. A motorcycle trip through BC on the way to Alaska is on my to-do list.

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