Can I ask you a question? Who benefits from the employee performance appraisal process? I think there's four constituencies that benefit, number one the employee. The employee benefits because they will have better performance and good solid feedback. I think the managers will benefit through having a better team. And sort of selfishly, they look pretty good when their employees perform well. The organization benefits in that they have a stronger performing team which translates into return on their investment. And finally, the customers do benefit. You have better customer service and you have better quality of service. So I think there's a lot of benefits in the performance appraisal process. After this video you'll be able to understand purposes of performance reviews, and identify uses of performance review data. Some key things to think about. First of all, align your performance reviews with goals. These are organizational goals, if you have them aligned with goals, the productivity is kept in mind, and that all employee performance feeds into the larger goals of the organization. Another thing is that it's a great development and administrative tool. Development of the employees so they can grow, that's a key thing of performance management as a whole. And we also have to always remember that it is a legal document and used for administrative decisions. Third, as a fair process. Employees need to know this is fair. If I do a great job, I think I should be rewarded. And if I do a poor job I don't necessarily think I should not be rewarded, but my fellow employees need to know that performance matters. And another one is document and defensible. When you're doing a process, if you have clear documentation the employee tends to accept the reviews more readily. Especially when it's a difficult conversation, and it also serves later on if needed, as a legal document. There are a couple of types of reviews. One is the formal process, I think we know what this one is. This is where the manager and employee sits down on a regular basis and has a discussion. Then there is the informal one, it could be the hallway conversation, it could be the weekly meeting, it could be pulling you aside. You often see an informal one, to use a sports analogy, during a sporting event if a player makes a mistake, you'll often see the coach on the sideline giving him some feedback immediately. This is so that you can correct the behavior on the spot, that just in time concept. Those are the two types to think about. Both are very important. Here's some purposes you should think about when doing the review process as well. Let's look at the couple of those. First, it's all about assessing my performance. I need to know where I stand with my manager, how I'm doing? We all want to know this. When I have students in class, the first thing they ask after atest is, how did I do? They want to know where they stand. Secondly, it's a platform for feedback. Any time you have any sort of informal review, formal one, it's a great time to have some discussion on how you're doing, how you can do things better and give that employee positive and corrective feedback. It's also a dialogue for positive outcomes. We often don't take the time to look at employees and say you did a great job and give them some feedback, the pats on the back, if you will. This is a great time to build that into the process. Development, one of the things that I try to underscore with all the managers, it's all about the development. Sometimes we think about other things that we do reviews for, the documentation etc., but it's about how I make my employee better whether it's correcting some issues that they have, and behaviors or if it's just making them better and helping them grow. Motivation. If done well, it can be a very motivating experience because you can give them the positive feedback, you're setting goals, you're giving them a vision of their future with your organization, and this also helps engagement. Also evidence for rewards, discipline, and terminations. Obviously in a rewards department do better, tend to get better increases in pay. It also is necessary if the behavior is not as well as we want it to be and there might be some other reasons later on. Let's look at a standard process you might use in the review process. The first thing is always set clear expectations. Employees often say that, that it is one of their biggest complaints of managers, I don't know what is expected of me. And think about that, if I don't have clear expectations, how do I know where to focus my time energy? So we really need to think about, are we really clear on expectations? A great example I once heard is of an individual who was teaching his son to take care of the yard. And he told him his expectations, that the yard was green and clean. These are great examples of the son really knew what was expected of him. And it could be a visual one, so be as clear as possible. You should always talk about past and future behaviors and accomplishments. You want to talk a little about the past obviously because you're reviewing their performance. But you also want to talk a fair amount on the future and the behavior and accomplishments that you expect going forward. This is part of that motivation process. Goal setting for future growth. Goal setting is crucial, and we've all heard about different types of goals but in this process in general, you need to focus on the future and what you're going to do to continue the growth of the employee. Job-relevant skills and knowledge assessments. One of the things I really stress is the review should focus on the job-relevant skills. It's easy to get off on other employee issues, but focus on their relevant skills and the knowledge of the job that they currently need. In general, it works as a really nice piece of advice. The last one is there should always be a review and recap. This is crucial too. At the end of a report or a movie, there's sometimes a review and recap. This is what you want to have. But one caution, no surprises. That is something I try to drill into managers brains that you don't want surprises. Anything that hasn't been discussed during the year shouldn't be discussed during the review. The reason it is called the review is it is reviewing the highlights of the year. So do not have surprises at the end of the year, save it for another feedback discussion. I'm going to talk a little about the individual uses of data. First of all, is a category, administrative. There's a number of things we need the performance data for. Increases, it could be just documentation in general for legal purposes, but administrative function is crucial. As much as we talk about the development side, we do need to do the paperwork. Development. This is the one I focus on most, although it's not any less important than the administrative. This is about the growth and development of the employee. As I mentioned earlier, the key thing on performance management in my mind, is that it's all about developing people. If I have an issue with an employee where they're not performing well, how do I correct it so they can grow? If I have a star performer, how do I keep them growing? All of this data is used to help the individual grow and develop, whether they're a mediocre performer or a star performer. Organizations need data too. Organizations love to collect it, but there's some really good macrodata that we can use. A couple of examples. One is to look at the strength of the organization. When I look at strengths of individuals, I can develop them. But when we look at individual strengths, we can use this in strategic decisions such as SWOT analysis, is what is the strengths of our organization and how do we leverage that? Training needs. If I have a number of people who say, have computer skills, deficiencies, time management, customer service, I can use that in to my training plan on a macro level. And rather sending individuals out one-by-one for expensive one-on-one training, I can do classes within my organization. Leadership. We always want to fill out a leadership pipeline. In the performance appraisal process we can really identify who some of our key leaders are and what we're going to do to help increase their leadership capabilities, grow in the organization and become the next leaders of our organization. Succession planning. This is a little bit like the leadership, only it's really about the whole organization. How do I fill the pipeline? Do I have people in place who will be able to take the spot of their manager when they leave, all this data is present within the performance review process if we are mine that data. Compensation. This is one we all know about and we know if we do well in the job we're likely to get compensation increase. But again, by having the organizational data we can look at it from a big picture and making sure we are consistently administering compensation, which is being a legal issue if we don't. Terminations. I've saved this for last because it's the most difficult. Unfortunately, if we do poor performance management and people just aren't performing well, we eventually may need to have a termination. The data we collect through the performance management process will help us. It also can help us look at it from a macropoint. And our certain managers, why does manager a have 100% turnover and manager b have 5%? What's going on in that organization? So you can look at that for issues that you might have in the organization that could be problems within the organization.
