10 TIPS TO A MORE EFFECTIVE PERFORMANCE/BEHAVIOR REVIEW PROCESS

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1 (Exhibit #5) 10 TIPS TO A MORE EFFECTIVE PERFORMANCE/BEHAVIOR REVIEW PROCESS 1. Offer One Week's Notice Give the employee at least one week's notice so he/she can prepare their thoughts, ideas, and goals. The employee should be given a blank performance evaluation review form to complete on themselves and submit that form to you a day or two prior to the actual review. This will give you a glimpse at how the employee sees his performance and to identify any areas of disagreement which may require additional thought and preparation. If you find your associate s rating and your rating are off by 20% or more, (your score was a 4 and they had a 6 on a 10 scale) be sure to clearly identify examples to support your score or be prepared to change it. 2. Be mindful of the 50/50 Preparation/Presentation Guideline This means you should spend as much time preparing for the review as you spend conducting the review! For example, a full-timer's performance review of 60 minutes will require 60 minutes of prep time to do the job correctly. The thoroughness of the preparation will set the stage for a productive review. This preparation time is needed to review the employee's self-review, to talk to previous supervisors, review their current job description, peruse the employee's file, and to create goals for the next 12 months. 3. Arrange for Privacy, Comfort, and Sufficient Time Ask your assistant to hold all calls during the review. Make the request in front of the employee so he or she sees that you attach a great deal of importance to the review. There can be no interruptions. This practice shows the seriousness of the matter at hand. Also, offer a beverage to relax the employee. Reviewing a part-time employee requires a minimum of 30 minutes. A full-timer requires 60 minutes. Plan on 90 minutes for a middle manager and two hours for top management. These time frames are only guidelines. Don't ever look at your watch during the review process. In fact -- take it off and leave it in your desk drawer. You want the employee to feel that you have time for the session. Don't make them feel rushed or like they re an imposition.

2 4. "Two-on-one" Reviews To maximize the positive impact on the organization and because the performance review process is a vital and strategic experience for both the employee and the company, the evaluation meeting should include at least three persons: the employee, the reviewer and the reviewer's immediate boss. With the reviewer's boss in attendance, the tendencies for the reviewer to do a better job, increases dramatically. This 2 on 1 arrangement is a win, win, win, situation. The employee gets to "shine" in front of two levels of management. The reviewer can demonstrate to his boss how well he develops his/her people over time. The boss gets to conduct an informal personnel inventory to identify future stars or potential areas in need of improvement. To lessen the fear of intimidating the employee by having the image of "two against one," be mindful of the seating arrangement. In year one, the reviewer should sit on one side of a rectangular table and the employee and boss sit on the other. Positioning the big boss on the same side as the employee bolsters his confidence. In year 2 and beyond the seating arrangement really doesn t matter because the fear and misconceptions about the process have dissipated and mutual respect and trust has begun to form. 5. The "70/25/5" Rule Here is a guideline on how much each of the three people should talk during the review: The employee should command 70% of the conversation. The reviewer should talk about 25% of the time. And the senior manager or boss is restricted to occasionally guiding the conversation not leading it, occupying only 5% of the air time. This ratio (70%/25%/5%) is difficult to achieve in the organization s first year of performance reviews due to the reviewee s apprehension. As they realize that all parties present are there for only one purpose; to make them a better associate, they will begin to relax and converse more. If the reviewee speaks 70% of the time the reviewer gets a much better understanding of what makes the associate tick. 6. Show that You Listen and that You can be Flexible It is a good practice to use two colored pens when doing an evaluation. The reviewer completes the form in advance in one color. The second color should be used when making changes, additions and deletions on the appraisal form during the review. If the employee makes a reasonable argument regarding a score or comment, you might change yours to agree with the employee. It shows that you listen, respect the other's viewpoint, and are willing to change. 7. Avoid the Effect of "Haloing" and "Sandwiching" The halo effect is when you as the reviewer, have a personal bias towards one performance category and mentally "skew" all the other scores in that direction. For example, you might personally believe that customer service is the most important attribute for an employee to possess. As a result, you give higher scores on all criteria to an employee who is real good with customers. It s important to measure each criteria separate and apart from the others.

3 Also avoid sandwiching criticism between compliments. For example: "You're very personable with the guests, but your cash control is poor. But don t get me wrong, I m grateful you re so friendly. Instead of sneaking past poor performance areas in this manner, take time to discuss the problem and find ways to resolve it. 8. Complete the entire form If there is space available on the review form fill it up with comments, examples, elaborations or clarifications. When you leave your present position, your reviews remain behind to be used by the next manager. A score of "B" or a "3" mean nothing without some supporting words. The managers after you need to know what you meant by a 3 or a B. Help them by clarifying with some details and examples. Vagueness doesn't help anyone and can work against you. Clear, specific and honest comments vs. examples will build mutual trust and a better review process. 9. Separate Performance Reviews and Pay Adjustments Discussions Although pay and performance are, more often than not, in lock step with one another, it s a good idea to separate the discussion on any associate s performance with the discussion on a pay adjustment by at least a month. My biggest mistake in conducting reviews was to end the performance review session with the determination of how much the associate s pay would be changed as a result of the review and their performance for the year. I quickly learned that the associate wasn t listening to anything until the long awaited show me the money statement was made. The worse case scenario, which happens far too often, was when the associate received less than they had hoped. Their disappointment far outweighed any positiveness generated in the previous 90 minutes. By creating some time space between the two discussions, the performance goals can be digested and work can begin on them before any disappointment about pay arises later. 10. End with a positive goal setting session This session should consume 60-70% of the review process and it will have the most positive impact on all parties concerned. Specific goals give the employee a clear direction on what he or she must do to improve and grow with the company. S.M.A.R.T. goals should be written carefully (see attached.) They should address the associate s strengths, how can we best utilize this asset in other parts of the company? and should consider the associates weaknesses or areas of improvement, what can we do to fix what s broken? The number of goals decided on should range from 3-7 depending on their degree of difficulty. For those associates whom you ve already developed a rapport, I found it effective to make one of their S.M.A.R.T. goals of a personal nature. For example, I would ask, what one personal goal would you like to accomplish this year and how can I help you achieve it? In asking this question of about 1/3 of my associates, I was instrumental in helping many stop smoking, go back to school, read more, and even improve their golf game. Your people really don t care how much you know until they know how much you care.

4 HLp s Setting S.M.A.R.R.T.E.S.T. Goals If you have ever taken a business course in school you were most likely exposed to the acronym S.M.A.R.T. as it applies to setting goals. It is a helpful way to remember the most important components of a properly written goal. A S.M.A.R.T. goal is one that is: Specific; with who and what clearly stated. Measurable; goals must be quantifiable and objective not qualitative and subjective. Actionable; with the what and how spelled out. Realistic; not blue sky or wishful thinking. Timed; both when s are answered. When to begin and When to expect completion. All goals have a greater likelihood of being achieved if they are more specific than general, more measurable than vague, more action oriented than theoretical, more realistic than hopeful, and bracketed by a beginning and ending time-frame. But after 25 years studying this business, I have identified four more characteristics that need to be included to make S.M.A.R.T. goals the S.M.A.R.R.T.E.S.T. All the letters in S.M.A.R.T. goals still apply. The additional R stands for Relevant. What s the point of committing to a goal that s not meaningful or low on your priority list? The E stands for Ethical. I urge you to reflect on the goal you re creating to make sure society, your company or your family will not be slighted when the goal is achieved. The second S stands for Shared. When you share your goals with your team or your family you are more likely to commit to it. The new T stands for Typed. A goal that is committed to paper, typed or written, is far more likely to be acted on and achieved. Here are 4 basic goals submitted to me by students prior to learning S.M.A.R.R.T.E.S.T. goal writing then rewritten by the student using our S.M.A.R.R.T.E.S.T. template. Learn to write S.M.A.R.T. goals for yourself and with your people. And you ll find you and your team becoming infinitely more accomplished. Goal 1 (Before S.M.A.R.T.) My goal is to lose enough weight to fit into last summer s swimsuit. Goal 1 (After S.M.A.R.T.) My goal is to fit into last year s swimsuit by losing 8 lbs. by walking 2 miles a day, 3 days a week for 4 months starting this Tuesday. I will purchase a new scale by Saturday to measure my progress each week for the 4 months. I will share this goal with my best friend.

5 Goal 2 (Before S.M.A.R.T.) My goal is to become a better reader and to read more. Goal 2 (After S.M.A.R.T.) My goal is to increase the amount of reading I do at least 1 book per every 2 months beginning March 1. I will also join the Book Club in my neighborhood next month to improve my retention and reading comprehension. Goal 3 (Before S.M.A.R.T.) Our goal is to reduce the amount of employee turnover. Goal 3 (After S.M.A.R.T.) Our goal is to reduce employee turnover by 27% by doing 3 reference checks per candidate and by increasing the orientation/ training time for all new hires beginning on January 1 from 10 hours to 24 hours. 7 of the additional hours will be spent shadowing a seasonal associate. Each store manager will champion their own stores goal. Goal 4 (Before S.M.A.R.T.) My goal is to improve customer service in my store. Goal 4 (After S.M.A.R.T.) My goal is to improve customer service in my store by instituting a two part customer feedback system. Part 1 will be in place by September 1 and involve the establishment of a suggestion box by all entrances/exits. Part 2 will be implemented by February 1 and involve the creation of a Customer Advisory Panel which will meet semi-annually for 2 hours. I will Display the feedback we receive in the employee s break room. Of course, each of the After goals above requires even more detailing to be considered sufficiently complete. However, it is readily apparent that the Before goals are woefully underdeveloped and have virtually no chance of success because there is no stated quantifiable method to measure their outcomes. Be mindful of all 9 letters in the acronym especially the M and the A. They are the two most frequently omitted or understated..

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