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Employee reviews are important

As a small business owner, you might feel you already have good communication with your employees & are uncomfortable with formal reviews. However, evaluations -- performed properly & consistently among employees -- provide evidence for promotions, disciplinary action & termination.

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Employee Reviews

Source: Layne

As a small business owner, you might feel you already have good communication with your employees and are uncomfortable with formal reviews. However, evaluations — performed properly and consistently among employees — provide evidence for promotions, disciplinary action and termination. Reviews can protect businesses from charges of discrimination, for example. But, they also help employees find satisfaction in their jobs, saving hiring costs for the business. There are three basic types of employee reviews.

General Characteristics
There is no universal set of criteria for what to include in a review. Employers must decide what skills and qualities are important to them, with the help of a human resources professional, if necessary. The Dun & Bradstreet Small Business website states the first part of the employee review can include questions that reflect the quantity and quality of the employee’s work relative to job requirements. A receptionist, for example, might be evaluated on how well she takes messages. The second section of the evaluation might include questions on employee attitude, such as willingness to help other employees with their work. For this section, the receptionist might be reviewed on how frequently she volunteers to help other employees, such as by assisting with data entry.

Employees usually fill out a related self-assessment and, afterward, meet to discuss the results with their manager. The manager should make the review a two-way conversation, asking the employee to discuss issues most important to him. Reviews should be done regularly, at least once a year, with the aim of boosting employee morale and productivity, not fault-finding, advises Dun & Bradstreet.

Traditional Reviews
Traditional, or top-down, reviews are those in which an employee’s manager conducts the review and has the authority to appraise the employee, discuss plans for the future and award raises. The review is conducted solely between the manager and employee. Although an employee’s manager might know her work well, the major disadvantage of traditional reviews is that the employee is reviewed from only one person’s perspective, and that person might be biased or not know all the aspects of the employee’s performance, according to the University of Rhode Island.

Peer Reviews
Peer reviews allow employees to give input into their co-workers’ strengths and weaknesses, providing more insight into an employee’s work than a manager might glean alone. The employee benefits from receiving information from multiple sources on specific issues from those in the organization working at the same level. Peers also gain a sense of teamwork. The disadvantage is that co-workers might evaluate each other more critically if they are in competition for promotion or pay raises. As a result, this method should be divorced from decisions for promotions or raises, and those decisions should be left to a manager. Peer reviews can be done in groups or anonymously. Staff training helps them provide fair evaluations.

360-Degree Reviews
In 360-degree performance reviews, employees receive feedback from multiple sources — those whom they interact with most — such as their boss, co-workers, subordinates, and even customers and vendors. People provide feedback by answering standardized questions regarding the employee’s competencies and performance outcomes using a computer or paper format. Feedback is anonymous. The employee receives a report detailing his strengths and areas for improvement. This method is also used for employee development only, according to the University of Rhode Island.

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