Employee Performance Reviews

by Richard Avdoian

For many years businesses and health care facilities, along with practically every other industry, has emphasized, taught and expected business owners and management to implement formal performance reviews of all employees on a regular base, typically biyearly or at a minimum yearly.

Although when asked, employers generally agree that these reviews are often delayed and in many cases neglected for years.  

The question is then: Why do we need performance reviews at all? Has this practice actually made an impact on the performance of employees? Do they really offer an authentic appraisal of an employee’s performance and capabilities?

The answer is no, they really do not work at all and are generally a waste of time and energy.

Rather than the typical performance review format, consider using “management by objectives” (MBO),  a completely different approach to measure, monitor and encourage an employee’s performance.

This process brings the business owner/manager and employee together to identify areas for personal improvement, establish specific job performance goals, or objectives, and develop a plan of action and timeline to reach or surpass them. The goals need to be clearly defined, measureable and achievable; otherwise they may have an adverse effect on both the manager and the employee.

MBO is not a new system and is used primarily as a tool for enhancing productivity and employee motivation and, it is hoped, resulting in increased profitability. It serves as a means to improve communication and relationships between employees and management, increase employee understanding and buy-in of the company’s goals, and provide a clear connection between pay and performance. The MBO system emphasis is on the employee’s personal achievements and not on the general duties associated with their jobs.

Periodic review sessions help monitor, measure, and advise employees on meeting or exceeding the established personal and professional goals. The use of RBO sessions eliminates subjectivity and perceived favoritism; the process is specifically related to meeting, exceeding or failing to meet goals and objectives in a timely and efficient manner.  

These sessions can also serve as a means to revise and develop additional goals and to discuss what has worked and what hasn’t. The frequency of sessions will vary from employee to employee based on the complexity and length of the goals and their significance to the overall operations of the company.

Owners and managers need to be consistent with sessions to emphasize their commitment to being supportive, mentoring and monitoring progress.

The advantage of this process over the traditional method of evaluating performance is that both parties involved benefit. Employees learn, improve and accomplish the goals established because the owner/manager has the opportunity to be directly involved in guiding, mentoring and teaching them as they work toward their goals. Employees know exactly when and how they are being measured and what is expected of them. The business owner benefits because employees respond positively to the process and guidance and become actively engaged, motivated, proud and rewarded for their performance.

Richard Avdoian is founder/CEO of the Midwest Business Institute Inc., a business coaching, consulting and training firm. For more information about coaching and training, contact Richard at 618-972-8588 or Richard@RichardAvdoian.com.