I Hate Annual Performance Reviews



By: Ruth King

This statement was told to me by a manager during a class I was teaching recently.  Almost everyone in class agreed. I asked why.

The most frequent answer:

“All they care about is how much more they are getting an hour.  They don’t care what the review says.  They leave either happy or pissed off.”

If you hate performance reviews too, then it’s time to change how you do them:

  1. First, if you hate doing them, your employees will hate receiving them. Your attitude affects their attitude.  Find a way to be positive about the review process.
  2. Reviews should NEVER be a surprise. If you do them only once a year, then it probably is a surprise.
  3. Reviews don’t have to include raises. Performance reviews are just that – performance reviews.  Raises for great performance or cost of living can be separate. Many companies do cost of living raises each January.  And, this year, it will be important to have those raises since inflation is starting to “rear its ugly head again.”
  4. Reviews should be based on KPI’s – key performance indicators. What are the minimum performance metrics for their job?  What happens if they exceed these metrics?  This is where the raises or bonuses come in.
  5. Employees should know where they are with respect to KPI’s at least quarterly. Then the annual review is not a surprise.  Many technicians know what revenues their truck has to generate each day and each week.  They get their “report card” weekly.  No surprise at review time.
  6. Service and production personnel have minimum revenue numbers, as well as callback and warranty call percentages they can’t exceed.
  7. Salespeople have quotas and required closing rates – their KPI’s.
  8. Office personnel KPI’s could be:

a. Their call booking percentage

b. The number of enrollments in maintenance programs

c. Accurate financial statements due by the 10th of the month

d. Receivable days under a certain number of days

e. Inventory days under a certain number of days….and more.

 

These are example KPI’s that can be tracked so the employee knows how they are performing. Employees should always know this as well as the bonuses for exceeding these minimum KPI’s.  Remember bonuses don’t have to be money – they can be time off oriented too.

Communicate the KPI results frequently.  When you do this, reviews are never be a surprise and they are much more pleasant for everyone.

 

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