Small businesses can use all sorts of tactics to keep employees happy, but one old standard that shouldn't be overlooked is a well-managed performance review system. Employees tend to stick around when they feel that their contributions are recognized, appreciated and rewarded.
Many smaller companies don't have formal employee review programs, figuring that because the company is small, employees can easily see how their performance affects business. But it makes an important statement to employees when a company — no matter what size — takes the time and effort to provide feedback, and it can also have significant impact on how well the overall business operates.
"But this review business takes up too much time," you say. Fortunately, you can find some quick and helpful solutions on the Web.
No more blank slates
Several online services are designed to help you write employee reviews. Such services typically start with one or more standardized review forms, pre-populated with five to 10 core competencies (adaptability, quality and communication, for example), on which you can evaluate an employee. You can add or delete competencies to create a form that is tailored to individual jobs.
Three similar solutions are Performance Review Performance Now and Employee Appraiser. Only the first is truly Web-based. The other two require software downloads (which took less than two minutes each over my DSL line, but would take longer over a regular modem). Performance Review.com and Performance Now both are created by Knowledge Point; not surprisingly, they are very similar in functionality. Employee Appraiser is made by Success Factors.
All three solutions try to help solve the "blank page" problem of managers procrastinating because they don't know what to start writing. As you fill out the appraisal and assign a rating ("meets expectations" or "exceeds expectations," for example), the software writes appropriate words to go along with the rating. For example, if you rated someone's communication skills as meeting expectations, one of the products suggests the following text, "Erin is a good writer and speaker who communicates well with others. She listens attentively and keeps team members informed." But if you said her communications skills exceeded expectations, it suggests the following: "Communicating with others is one of Erin's greatest strengths. She speaks clearly and concisely, adapts her style and wording to each listener and can explain complex issues to co-workers and customers."
Be sure to tailor the text
Obviously, you can (and should) tweak the wording, adding specific examples to demonstrate the point, or crafting words to reflect the specifics of the company's and the employee's situation better. But the canned text generally provides good ideas for unbiased ways to describe an employee's skills, and helpful suggestions about how to word difficult messages.
Employee Appraiser varies the text to correspond to different levels of accomplishment:
"Susan is determined to get results and does not let roadblocks slow her down for long. Several times she has had to deal with unexpected setbacks."
(Exceeds Expectations)
"Susan is a reliable, persistent worker who keeps a positive outlook and does not let unexpected problems stop her from successfully completing her work."
(Meets Expectations)
"I'd like Susan to try handling: more unexpected problems on her own."
(Doesn't Meet Expectations)
These products also provide ideas that can help a manager clarify her thinking about why a person isn't meeting expectations. For example, when you indicate that someone is not meeting expectations for communications, you get a list of 10 specific ways that he may need to improve communications — everything from disorganized, confused writing, to needing to be better prepared for presentations.
Still, a word of caution is in order. Some of the text can seem frighteningly Orwellian in its generality. If you just used the software without adding specifics you could easily come up with an appraisal document that could be fodder worthy of a Dilbert comic strip. The software-generated text should be used as a "scratch pad" for beginning a review, not as the final document. Software prompts you to add supporting examples when you rate someone's performance either very high or very low. Even for mid-range ratings, editing and specifics are important.
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I found the Employee Appraiser's text a bit less general and more subtle. It has a feature that lets you "tune" the text, making it slightly more positive or negative. Still, it's best used as a starting point, one that you edit for specificity.
Another caution: None of these solutions offers a clear way for employees to fill out a review form for themselves, a task that many firms consider an important step in the review process. Still, it's easy enough to create a blank review form and send it as a Microsoft Word document to employees, so they can provide input into their review.
Many competencies, few objectives
All three solutions suffer a bit from focusing strongly on rating employees on various competencies, with much less emphasis on objectives. Partially, this reflects the history of performance review trends.
Another solution, WebMBO.com takes exactly the opposite approach, focusing its solution entirely on objectives, with little assistance in the area of competencies. Its solution is geared more toward larger firms seeking to mesh individual goals with broader departmental and corporate goals. The tiered-down goal approach is intriguing, but is probably overkill for smaller companies. KnowledgePoint also offers a higher-end product that adds hierarchical objectives management to its lower-end solutions, but for smaller companies it's probably sufficient to enter objectives and results in the appropriate sections of the PerformanceReview.com or Employee Appraiser products.
Overall, some nice pricing
These solutions won't break your piggy bank.
Employee Appraiser and Performance Now are sold as software packages. Employee Appraiser runs $260 to $275 per copy, and Performance Now is $119 per copy. You'll probably need separate copies of the software for each manager who does reviews. Both products have free trial versions you can download to try before you buy.
Since Performance.com is an online service, its pricing model is somewhat different: It charges $9.95 for one review. If you decide that you want to use it on an ongoing basis, it runs $89.50 per year for each manager who does reviews. Discounts are available if you have several managers. WebMBO also has annual service pricing; at $144 per employee per year, it has the steepest fees of the services discussed here.
Performance management? What's that?
Nearly 20 years ago, I put together the first employee appraisal program for the small business I was then managing. I am amazed at how much employee reviews have changed since then. Some of it is superficial — you're not supposed to talk about employee reviews anymore, it's all about "performance management." But there are some very real questions you'll need to answer as you create or update a performance management process for our business. Some of the recent controversies in the world of performance management include:
Should you use number ratings (typically 1-5) or not?
Should you rate employees based on performance versus expectations, frequency of demonstrating desired behaviors or on a more absolute scale of "poor" to "excellent"?
Should you ask employees to review themselves as the first step in the process?
Should you use 360-degree feedback techniques to include input from peers, direct reports and others?
It's worth catching up on the latest thinking on some of these issues. Some of the best articles I found are at About.com.
Start off with a paper appraisal
If you are creating a performance management process for the first time, you probably won't find the educational information you need on the Web. Fortunately, there are several books that explain the overall concepts of performance management.
If your company is ready to begin doing performance appraisals for the first time, or you want some assistance to help get over the procrastination hurdle, check out these online and software tools. It's an easy, cost-effective way to keep good employees happy and to help employees who are struggling. Giving your team members acknowledgement of their accomplishments, feedback they can act on and clear goals for the next year adds another entry on your employees' list of reasons why they should stay in their current jobs. |
