The performance review

• provides the basis for equitable reward for the employee’s contribution. [rewards contribution]
• Highlights the employee’s strengths
• Identifies areas in which the employee may improve to achieve higher ratings and/or more responsible assignments.
• Provides the basis for fair salary administration across the organization. [makes salaries equitable]

The performance review is a formal, scheduled meeting.  The manager asks the employee to prepare a self evaluation prior to the meeting.  Using the employee’s self evaluation and the manager’s project and task information, the manager writes the review.  The review considers and documents factual, observed performance and rates the performance using the position description as the standard for acceptable performance.  I suggest a 4 category rating system.

• A zero rating means that the performance criteria was not met.
• A one rating means that the employee’s performance met the requirements of the job.
• A two rating means performance exceeded requirements in some aspects of the job.
• A three rating means that the employee’s performance exceeded requirements in all aspects of the job.

The manager rates each of the employee’s assignments using this rating system, then computes or derives an overall rating using the individual assignment ratings and their relative weights or importance.

The manager notes and comments on the employee’s strengths and areas of improvement and documents these comments in the performance review document.

Having completed the review documentation, the manager schedules the review with the employee.

The performance review is a formal, scheduled meeting.  In the meeting, the manager provides the employee with a copy of the review and provides the employee the opportunity to read the review.  They discuss the review, the manager answering any questions the employee may have.  The manager may change a rating if the employee provides factual comment that the manager did not consider. In matters of opinion, the manager’s opinion prevails.

During the conversation, the manager discusses the employee’s strengths and areas of improvement. The manager and the employee will schedule a separate meeting to discuss a development plan to address these areas of improvement.

Both the manager and the employee may then comment on the review.  The manager should summarize the meeting in his comments.  The employee may comment on the review too. If the employee disagrees, the employee’s comments should so reflect it.

The manager and the employee sign the review.  The employee’s signature states that the employee understands the review.  The signature does not signify agreement.

The employee and the manager set a meeting to create a performance plan for the next year.  They also set a meeting to create or update the employee’s development plan.

Summary:

• Based on facts only
• Rates 0-3
• Comments on each task
• Notes strengths and areas of improvement
• Conduct the review
• Manager and employee write summary comments and sign

Counseling takes two forms.

The first are scheduled interim reviews during the performance period. The manager meets with the employee and discusses what the performance review would be if it were conducted now, today. The manager discusses the basis for the assessment, identifying deviations from the plan. The manager and the employee investigate the reasons for the deviations and devise an approach to address them. Both individuals may have assignments in the corrective plan. The manager also recognized the employee’s demonstrated strengths. The manager and the employee discuss how these strengths may be further enhanced and utilized. The manager documents the counseling session and provides a copy to the employee.

The second form of counseling is immediate, occurring when the manager or the employee identify a significant deviation from plan. The manager and the employee meet and discuss the deviation. They jointly identify the issue, identify corrective action, and agree to address the issue. They also schedule a meeting to follow up on the issue and its correction.  It is important to note that either the manager or the employee can initiate this discussion. [Added Nov 13, 2008] It occurred to me today that constant immediate counseling would be demoralizing.  The compassionate manager should reserve immediate counseling for those situations that require immediate attention.]

These mid course corrections are essential in maximizing individual and organizational performance.

To summarize:
Feedback is essential.
Impromptu meetings address issues that require immediate correction.
Periodic reviews summarize performance to date in the plan cycle, providing areas of improvement and identifying strengths to exploit.

The expectation stated in the performance plan should be based on the position description that describes the employee’s job.  If the position description and the performance plan are not congruent, then the employee is not being appropriately evaluated or paid.

The goals stated in the performance plan should be SMART goals.  Refer to my earlier podcast for a discussion of SMART goals.

I don’t think that the goals should be behavioral.  For example, a goal to “maintain good customer rapport” is behavioral or not measurable.  Such goals are not quantifiable and contribute only indirectly to the bottom line.  Behavioral issues should be addressed when the manager observes deviations from the organization’s standards.  Behavioral features like attendance, respect, team player, etc., are conditions of employment.

Plans should be brief, ideally documented on one type written page.  I think if plans can not be so briefly described either the performance objectives have not been completely thought out or the plan is describing how to accomplish the objectives.

Plans should state what is desired, not how to do the job.  The employee will select the appropriate strategy and behaviors to accomplish the job.  Doing so is the value add that the employee brings to the organization.

Plans, while based on the position description, should provide some possibility for growth, challenging the employee to develop new skills or to perform at the next level.  Plans should contain and identify objectives that exceed the requirements of the job, thus providing this challenge for performance and growth.

The plan should be a working document.  The employee and the manager should each maintain a copy of the plan and should periodically review the plan together.  I will discuss Performance Counseling in another podcast.

To summarize:

• Base performance plans on the job description.
• Use SMART goals.
• Define task objectives, no behavioral objectives.
• Be concise.
• Make the plan a joint working document.
• Write the plan to provide a challenge.
• Review performance against the plan periodically.

A position description should exists for each position in the company and should be the basis for determining the compensation for each job and subsequently for each person in the organization.

the position descriptions allow the company to set salaries consistent with the industry and also to ensure that the individuals within the organization are being fairly and equitably compensated in relation to each other.

Position descriptions are also the basis for hiring.  They define the skills and abilities of the desired candidate and suggest where the candidate should demonstrate experience in the required duties and responsibilities.

Second, the job description is the basis on which the manager writes the performance plan, in cooperation with the employee.  It defines the level and extend of the tasks that are valid for an individual in a particular job.

to summarize:

• Job descriptions describe each job in the company.
• A job description describes the duties, responsibilities, authority, and skills associated with the job.
• A particular job description describes the expectations that an individual in that job should meet.
• It allows the organization to establish salaries consistent with the industry and consistent within the organization.
• It is the basis for hiring.
• It is the basis for performance planning.
• It sets the acceptable level of performance in a performance evaluation.

A search on the Internet will reveal several sources from which an organization may obtain a set of job descriptions if the organization does not have descriptions for their job categories and does not wish to independently develop a collection.

This framework contains 4 elements:

• The Position Description
• The Performance Plan
• Performance Counseling
• Performance Evaluation

The position description describes the job that the employee performs in the organization.

The performance plan describes management’s expectations of the employee in terms of results.

Performance counseling provides the employee relevant comment and feedback, during the performance period, allowing the employee to capitalize on strengths and improve when needed improvement is identified.

Performance evaluation formally reviews performance during the performance period and serves as the basis for salary administration and employ development planning.

In the next 4 podcasts I will discuss each of these items in more detail.