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Three Performance Review MethodsThat Will Boost Employee Retention
Employers, how often do you hold performance reviews? Many employers realize they’re important, but knowing they should be conducting reviews and actually doing it are two different things.
Consistently communicating with employees about their performance and company expectations is crucial. It can save your company thousands in hiring and training costs by increasing employee retention rates. Regularly scheduled performance reviews are also useful for avoiding wrongful termination and discrimination lawsuits. Performance reviews are not just about having a performance review process; it’s about running and protecting your business.
Conducting performance reviews
Each company’s review process should serve its specific needs. Different review styles are appropriate for different businesses. Here are three examples:
- 360° feedback — Customarily annual or semi-annual, this type of review looks at the overall performance of the employee. It involves feedback from peers, supervisors, and human resources. Attendance, attitude, productivity, and quality of work are addressed. During the review process, corrective action and goal-setting also take place.
- Management by objective — Often used for sales positions, this review looks at results and objectives as a gauge for how well the employee is performing. Did the employee meet the set goals or expected productivity? New objectives and expectations can be set. Employee assistance such as training or support should be offered to improve performance.
- Rating scale — This type of review rates employees’ performance in various aspects of their job using a one-to-five scale. A rating of one signifies unacceptable performance and should include probation and disciplinary action, possibly even termination. A rating of five signifies exemplary performance. Ratings are applied to everything from productivity to attitude.
Documentation is important
Regular communication is key to getting the best out of employees, maintaining morale, and increasing your retention rates. Performance reviews are an excellent time to address problems. Do not wait until review time to address situations that need corrective action.
Employers should be clear about company expectations and be fair and consistent with disciplinary measures. When a problem arises, document every action taken, including conversations, emails, warnings, and write-ups. A paper trail is the best way to support necessary disciplinary actions.
Having the right performance evaluation system in place for your company will allow your managers to make the right decisions when dealing with performance and other related employee relations issues. Managers will be able to operate their department(s) with confidence and they don’t have to be intimidated by their employees.
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