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Business Insights from Andrea Hill

An annual employee review process can be a powerful driver for business growth and innovation. Unfortunately, in most companies it's not used for that at all. Here's how to improve.

Getting Employee Reviews Right

Originally Published: 28 January 2015
Last Updated: 09 March 2021

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When my oldest child was eight years old, I stumbled upon a brilliant method of doling out consequences for less-than-desirable behavior. Instead of telling her what her punishment was, I asked her to decide on the punishment herself.

Invariably she came up with a more harsh punishment than I would have suggested – often more harsh than I could support. But what really struck me about the approach was how much she hated the process of creating her own consequences. On one memorable occasion she stomped her foot and ran from the room screaming “Why can’t you just punish me and get it over with like normal parents?”

Though we went through our fair share of trials and tribulations on the way to adulthood, now she is 25 years old and one of the most personally accountable, self-disciplined people I know, able to defer personal gratification for good cause, possessed of an incredible work ethic, and filled with a sense of purpose in her life. Can we blame it all on forcing her to come up with her own consequences? Certainly not, but even she credits that early accountability as among the most influential experiences of her life.

This reflection comes to me as I help clients prepare for the oh-so-common annual employee review process.

Recent publications indicate that human resource professionals are beginning to doubt the value of the employee review process, and many companies have abolished it altogether. Considering that most employee reviews consist of a manager making a hasty and vague list of canned desired improvements and delivering them impersonally in a 15-minute stress session, this is not surprising. Having been at the receiving end of that type of review myself, I see no value in wasting any corporate time on such activities. But what if the employee review could provide the adult version of the strong sense of personal accountability and purpose that my daughter gained when asked to create her own consequences? Isn’t there room for meaningful employee-manager exchange about goals, objectives, accomplishments, and potential?

I think there is, but it requires commitment and preparation on the part of the manager to achieve. It starts with engaging the employee in the process from the very beginning. It starts by asking the employee to be his own reviewer.

The most successful review process involves providing employees with a self review questionnaire, asking them to take time to consider their performance over the past year, and giving them the opportunity to present their assessments during a private, relaxed, sufficiently scheduled time for discussion. By putting responsibility for self-assessment in your employees’ hands you open the door to insight you could not gain if you were to review them and ask for their compliance. You also walk the fine line of approaching them as an adult peer while appropriately acknowledging your role difference, which can make all the difference between a successful or resentful working relationship.

When asking employees to prepare a self-review, suggest that they answer the following questions:

1. How did my performance contribute to my department’s achievement of our strategic goals?

2. What was the impact of my performance on the challenges faced by my teammates?
Did I accomplish goals that were set for me during my last performance review? (Please be specific.)

3. Please explain how you understand and are working to convey the company brand?
Please explain how you understand and are working to convey the company philosophy (or principles)?

4. Were there any actions or factors that inhibited your work performance? If so, please describe:

5. The new skills I have developed and demonstrated are:

6. How did these new skills add value to your team or the company?

7. How can my supervisor facilitate my contribution to the achievement of my personal goals?

8. How can my supervisor facilitate my contribution to the achievement of the company goals?

9. My goals for next year are:

Managers should answer the same questions for each employee they plan to review. A manager who doesn’t have enough information to answer those questions about each of her direct reports isn’t paying enough attention – an important form of self review for the manager.

On review day, set aside enough time (45-60 minutes) and a private space to have the discussion. Ask the employee to present his review first, in its entirety. This gives the manager the opportunity to listen carefully and learn about each direct report, which will help her be a more effective manager and will help the two of them together to provide greater value for the company and a better working experience for themselves. Once the employee has completed his review, the manager should first acknowledge all the things about which they agree, congratulating the employee on accomplishments and offering support for improvements the employee wishes to make. After that, the manager can offer insights from her own review that did not appear in the employee review. Finally, invite discussion about those points and come to agreement about the most positive goals and objectives for the coming year.

If you have a trusting relationship with your employees – and the requisite amount of confidence yourself – you can also ask for input on your own performance as a manager. Your employees possess insight about your performance that is relevant to your long-term success and different from what your boss has to offer (of course, none of this process has value without trust. If a manager has a conflicting relationship with an employee, the employee will feel set-up and unsafe when asked to come in and review himself).

One of the most common objections I hear to this approach to annual employee review is that it will take too much time. To respond to that, I like to retrieve a copy of the P&L/Operating Statement for the year. The largest company expense is almost always product cost. The second largest? Human resource. The ultimate key to competitiveness lies in the excellence and happiness of your employees. Invest in that, and you are investing in profitability.

Happy Reviewing!

© 2010 Originally published on the Hill Management Group/StrategyWerx Website, 8/29/2010.