Many HR professionals have asked me if performance reviews are important, or even necessary, in these difficult economic times. The corollary to this question is if it is even possible to effectively utilize performance appraisals when you can’t give raises.
Even in good economic periods, performance reviews do nothing for employees if they have not received feedback throughout the entire year. Employees need to receive continual feedback from managers in order to have the opportunity to make behavioral changes to meet goals. Managers need to be encouraged to have continual performance communication with their direct reports. However, with reduced budgets and less money, if any, available for raises and promotions, companies need to focus more on continually developing current employee skills and talents while helping them improve and develop. Performance reviews can be used as a tool to accomplish this and help employees advance in career development.
Some budgets now require the consolidation of certain positions. This is another reason why performance reviews are so important: to help develop employees enhance key behaviors , find new ways to work with difficult employees, turning their negative traits into positives. Is it the fault of employees if they are given poor reviews at the end of the year without having provided them with consistent feedback and mentoring throughout the entire year? Employees should be given the opportunity to hear about what they need to improve on and given the time to make those changes necessary to improve. To do this, managers can hold a performance goal meeting and give feedback in January, with follow-up meetings each quarter.
Management people are in leadership roles for a reason: to be leaders. A leader or coach would not wait until after losing a playoff series to tell players that they had played poorly the entire season and need to improve for next year. A good coach or leader addresses the issue right away in order to give that person the opportunity to improve performance.
1. Performance Appraisals need to be honest, forthright and a true evaluation and assessment of performance based on goal achievement.
2. Organizations struggling with an inability to honestly appraise employees because the organization can’t afford to pay bonuses or increase salary are cheating their employees out of opportunities to develop themselves and advance their careers.
3. Performance appraisals have always been and still are best when focused on business development directly related to achievement of goals and not the distribution of money.
Do the appraisals! Explain the economic situation of the company, but emphasize that, even in these difficult times, personal development can enhance employee skills and talents, benefit the company, and in the future, lead to an enhanced situation for all. Performance feedback, when done correctly, will involve employees, develop them, and strengthen the organization.