The importance of performance reviews

While this neglect is seen among employers of all types, it seems to be much more problematic among small and medium businesses. The ECA is sympathetic to the fact that managing a small business can often times be quite demanding, but the importance of performance reviews and appraisals cannot be underestimated. This is a vital tool that not only offers invaluable insights into the strengths, weaknesses and shortcomings of your employees but can also save your business valuable dollars in the long run since these documents, together with a performance improvement plan, are considered strong pieces of evidence for employers dealing with performance-related matters and cases.

A performance improvement plan takes your performance review process a step further by giving struggling employees the opportunity to improve and succeed while still holding them accountable for past performance. This also establishes that the employer would have made legitimate and meaningful attempts to correct undesirable behaviour before the principle of progressive discipline is applied. Human Resource professionals are typically exposed to a variety of tools for preventing, and if necessary, defending against, inter alia, legal charges and lawsuits. However, performance evaluations are one of the most powerful pieces of evidence HR can use to demonstrate where an organisation would have legitimate, non-discriminatory reasons for termination or other adverse action against an employee or unsuccessful job applicant. In fact, most management-side employment lawyers may agree that performance evaluations can make or break the attorney’s successful defence of an employer against employee claims, charges and lawsuits.

The ECA is therefore a strong advocate for the implementation and use of a performance review system by all employers. However, there are several basic parameters that should be followed to ensure that the review system and process is effective, equitable, and efficient.

• Even before a review meeting is conducted, staff should be given real-time feedback about good or poor performance; as much as possible, the performance review should never contain “new” information
• Employers must ensure that employees understand how their performance will be assessed before the review
• Goals should be set in advance, ideally, in collaboration with the employee. A good measure of effective goal setting is to use the SMART approach, that is, goals must be specific, measurable, applicable to your strategic plan, relevant to the department’s purpose and time-sensitive
• Anticipate problems which may occur during the meeting and develop a strategy for dealing with them
• Be clear about your expectation that the employee participate fully in the review process as this should be a two-way process
• Always ensure that the employee has read and agreed to their appraisal results and that expressed commitment to change or modify performance is obtained Performance reviews may seem like a cumbersome exercise but despite the size of your business, its benefits are substantial enough to warrant the investment in time and effort. The ECA has developed several tools and templates that can assist employers in this regard, which will ultimately serve to foster improved employee performance, strengthen reward and incentive programmes, engender open and mutually beneficial communication and save money.