Tips for Delivering Successful Employee Performance Reviews
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- Margaret Conley
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1 Tips for Delivering Successful Employee Performance Reviews A commitment to regularly scheduled performance discussions can help you set expectations and motivate employees to outperform Performance reviews can be a source of apprehension and unease for employees and employers alike. The person delivering an employee appraisal may be uncomfortable sitting in judgment of someone else, while the employee on the receiving end may be anxious, especially if he or she is hearing about areas where significant improvement needs to be made. When executed properly, however, performance reviews don t need to be a nerve-racking experience. In fact, they can provide an effective way to create an open dialogue with your employees about their career goals. They also provide an opportunity to clearly communicate your firm s priorities and how each employee s performance plays a role in your firm s success. If you are a principal at a firm and responsible for managing employees, the first step in delivering effective performance reviews is to get comfortable with your role as a manager or business owner. While you may also maintain friendships with your employees, your top priority should be to ensure they can execute your business plan. The first step is acknowledging the fact that you are now in a different role and you need to step up your game, says Brian McDonald, vice president of human resources at Fidelity Institutional Wealth Services (Fidelity). If your focus has previously been more on actually doing the work, you will need to make a mental shift and start focusing on managing the work of others. Some advisors may argue that their core competencies are in money management or managing client relationships, rather than managing people. That s a valid response, says McDonald, but that doesn t mean you can afford to ignore employee performance and development. Whenever I talk to advisors about what is important in their practice, they invariably say it s their people. Assuming that s true, then I believe they owe it to their employees to provide them with the feedback they need to excel in their jobs and achieve their career goals. Every employee needs to understand what your performance standards are, along with your expectations for the particular role.
2 Setting Clear Expectations As with any other part of your business, performance reviews require careful planning. Ideally, you will have already created a detailed development plan for employees that clearly outlines what is expected of them to succeed in their job. This includes performance inventories that list areas of focus and specific behaviors within each focus area that employees must master in order to excel in a particular role. Performance inventories should identify the areas that a manager will observe to assess the employee s actions and behavior, which can lead to a productive dialogue between an employee and his or her manager regarding an employee s strengths and areas for improvement, says McDonald. Gathering Feedback Once you and your employees agree on what s important for them to succeed in their current position, the next step is to collect the information you will need to create a fair and comprehensive performance review. Start by asking your employee to conduct a self-assessment. This doesn t have to be a formal document, but employees should be prepared to discuss their most notable achievements and contributions, as well as potential areas in need of improvement. A self assessment provides you with a data point in terms of how an employee feels he or she has performed and then you can calibrate that against your own assessment, says McDonald. Next, collect feedback from your employee s co-workers, clients, and others who are in a position to directly observe the employee s performance. McDonald recommends asking employees to provide the names of people to contact for feedback, but you may also want to collect feedback from other people, such as key clients. Just make sure it s comprehensive and covers all aspects of the employee s job. Having The Conversation Once you have collected your data and documented your observations in a formal written performance review, it s time to deliver your feedback. Notify your employee about when and where the review will take place and be sure to select a private location that is free from interruptions. That means turning off your cell phone and providing your undivided attention. You want the performance conversation to be a dialogue, not a monologue, so you might even consider having the performance discussion over breakfast or lunch to provide a more relaxed atmosphere. There are varying opinions on whether it s best to deliver your written assessment in advance of your meeting. Some human resources experts believe it s preferable to allow employees to read their review in private to avoid overly emotional responses. Others, including McDonald, prefer to hold off on delivery of the written review until after employees have had a chance to provide their own perspective on their performance. 2
3 I like to get employees talking first about how they viewed the year because that way, rather than sitting across the table looking at you like a deer in the headlights, you are engaging them immediately in the conversation about how they view their own performance, says McDonald. By engaging them in an actual conversation, you are taking away some of the fear and anxiety that can build up. You are not only improving your ability to have a dialogue in the moment, but also on an ongoing basis. Talking Dollars and Sense Most employees want to know whether they are meeting their manager s performance expectations. But it can be difficult to get them to focus on performance issues when there is an elephant in the room, namely, compensation. Money is a motivating factor for most people, and until you address that issue, your employees may tune out what you re saying until you reveal those all-important salary or bonus numbers. Money is always a clunky part of the conversation and messages about performance often get lost when everybody s waiting for the punch line on their compensation, says McDonald. You can also have an employee with phenomenal performance, but if the budgets you have to work with aren t great or if you need to use your budget to reward somebody else who is lower in the pay range, that can detract from a really strong performance conversation. For these reasons, McDonald suggests decoupling compensation reviews from performance reviews. Instead of an annual review that includes performance and compensation, consider conducting separate semi-annual performance and compensation reviews. I think one reason why performance reviews are difficult for some managers and why they don t deliver them regularly is that they associate them with a compensation event. If you have the ability to decouple those conversations, that s my recommendation. If separate reviews are not feasible for your organization, then McDonald recommends revealing compensation numbers early in the performance review. Ideally, this will occur right after the employee delivers his or her self-assessment. By setting the overall tone of the performance review near the outset, you will relieve the suspense and hopefully get your employee to focus on the details of your performance assessment. Gaining Agreement on Your Assessment In some cases, your assessment of your employee s performance may not jibe with his or her selfassessment. When that happens, McDonald recommends that managers explain the process they followed to collect their data and feedback and then ask the employee to explain why he or she disagrees. Make it clear that you re willing to keep an open mind, especially if your employee can provide examples or data to change your opinions. This doesn t have to happen on the spot. Offer to schedule 3
4 another meeting within a few days to allow your employee time to consider your feedback and do some research. Sometimes, you may just have to agree to disagree. In either case, however, it s important to get your employee to provide a signed copy of the written review for your personnel records. Should there come a time when you need to terminate an employee, you want to have proof that he or she received performance feedback. If your employee refuses to provide a signed copy (it happens), simply write a note to that effect, sign it, and place it in the personnel file. Remember that semi-annual or annual reviews are not the only time you should be providing employees with feedback on their job performance. Any time you observe employee behavior that deserves praise or constructive criticism, be sure to deliver that feedback immediately, says McDonald. Regular performance conversations and informal feedback really motivate and drive an employee s level of engagement, which is directly correlated to the amount of discretionary effort an employee is willing to put forward. It s something that motivates and drives people to outperform. Getting Started Below is a summary of some of the key tips for delivering effective performance reviews that were discussed in this article: Do your homework. Talk to your employee s co-workers and clients to gather feedback and document your observations. Schedule a meeting. Give your employee advance notice of the performance review and allow one hour for the meeting. Give your undivided attention. Reserve a conference room or consider taking your employee out to breakfast or lunch for a more relaxed atmosphere. Turn off your cell phone! Make it a dialogue, not a monologue. Invite your employee to provide his or her selfassessment first to get them talking and participating in the review. Tie your review to your employee s development plan. Make sure the feedback you provide is consistent with the priorities that have previously been identified in the employee s development plan. Take money out of the conversation. Decouple compensation reviews from performance reviews, or reveal compensation early in the review to get the employee to focus on your performance assessment. 4
5 Fidelity Institutional Wealth Services provides information and tools to help you evaluate and develop your employees, including: A Guide to Building a Compelling Story for Current and Prospective Employees Tips for Completing a Development Plan Individual Development Plan template Performance Inventories (Senior Planning, Professional, and Technical Support) Tips for Delivering Performance Feedback To learn more, please contact your Fidelity representative. For investment professional use only. Not for distribution to the public as sales material in any form. The information contained herein is as of the date of its publication, is subject to change, and is general in nature. Such information is provided for informational purposes only and should not be considered legal, tax, or compliance advice. Fidelity does not provide legal, tax, or compliance advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Federal and state laws and regulations are complex and are subject to change. Laws of a specific state or laws that may be applicable to a particular situation may affect the applicability, accuracy, or completeness of this information. This information is not individualized, is not intended to serve as the primary or sole basis for your decisions, as there may be other factors you should consider, and may not be inclusive of everything that a firm should consider in this type of planning decision. Some of the concepts may not be applicable to all firms. Always consult an attorney, tax professional, or compliance advisor regarding your specific legal, tax, or regulatory situation. There is no form of legal partnership, agency, affiliation, or similar relationship between an investment professional and Fidelity Investments, nor is such a relationship created or implied by the information herein. The Fidelity Investments and pyramid design logo is a registered service mark of FMR LLC. Fidelity Institutional Wealth Services is a division of Fidelity Brokerage Services LLC. Clearing, custody, or other brokerage services may be provided by National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC, 200 Seaport Boulevard, Z2B1, Boston, MA All rights reserved
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