03 Nov Performance Reviews are simple to do and they’re effective

Performance reviews are an important tool for any business that employs people. They provide an opportunity to give feedback and to clarify direction. I know from experience with a number of clients that when done well, performance reviews can drive improvements in individual performance, and overall business performance.

Performance reviews and the pay review process

Leading up to or immediately following the end of financial year is a good time to do performance reviews. It’s also good to coincide performance reviews with a review of wages.

Before Award wage increases take effect

In a market where it is becoming increasingly difficult to attract and retain staff, most employees in the auto industry will be paid significantly above the relevant Award. However, employees will start hearing about increases to the minimum wage and increases to Award rates.

So it is a good time to review the pay rates of all your employees, assessing their pay rates in relation to the new Award, in relation to the market, and also in relation to the performance of each individual employee.

A simple performance review process

Managers often find the performance review process frustrating, because they can be so time consuming, because of the complex forms and performance review systems many organisations use. Nobody wants to do them! In larger organisations, HR people like me, have had to push managers to do them. But the process doesn’t need to be difficult or time consuming. I believe the process can be simple and effective, and I’ve seen them work really well for a number of my clients. Performance reviews are a good way to set expectations and to give feedback on the areas of performance that a manager is happy with, and not so happy with. If you do them right and conduct them honestly and respectfully, this simple process can have a significant impact on performance.

There are forms you can download from my website (www.girardi.com.au) at no cost, under “resources”. You’ll find two forms there:

• a Self-Assessment Form (to be completed by the employee before the review meeting); and
• the Performance Review Form (to be completed by the manager).

They are simple to use and can be completed in as little as 10 minutes. The key sections on both forms are:

1. What has the employee done well over the last 6-12 months?
2. What could the employee be doing better?

Using psychology to drive improvements in performance

This simple process is based on behavioural science, drawing on two key concepts that we know can improve the performance of individuals and work teams. The first is to provide employees with feedback, which helps to drive performance improvement. Feedback should mostly be focused on the positive. What has the employee done well over the last 6-12 months? That should be the focus. Behavioural science has taught us that positive feedback is associated with performance improvement.

What about negative feedback? In effect, you are delivering negative feedback using the second concept, but you are going to reframe it as your expectations for the future. The second key concept is to provide employees with direction (i.e. setting expectations for the next 6-12 months). This draws on the power of goal-setting, the effectiveness of which is backed by decades of research. We know it works.

Some tips for conducting the performance review process

Here’s some quick tips for making the performance review process positive and productive.

1. Be empathetic

Think about the fact that a lot of people get nervous about performance reviews. I like to think about how I’d like the person to feel when they leave the meeting. If there are negative messages I want to get across, I don’t want to avoid delivering those messages, but I also don’t want the person to feel destroyed by the process.

2. Focus on the positive

This doesn’t mean you ignore poor performance, but positive feedback helps lock in and build on the behaviours you want to see more of, so it’s good to focus a lot of your feedback on the positive aspects of a person’s performance. And remember, the idea that an employee will get a ‘big head’ and ‘drop the ball’ as a result of positive feedback, is a myth. Positive feedback is energising. Done right, it builds performance.

3. Be honest

While it’s important to focus on the positive, if there are negative aspects of the employee’s performance that need to be addressed, don’t ignore them. It takes tact, and diplomacy to do this well, but it’s important and only fair that an employee is told about the aspects of their performance that may be restricting their opportunities and affecting their ability to achieve a promotion or to simply increase their pay. It’s only fair to let people know why their not progressing as quickly as someone else, and what they need to do differently if they do want to progress.

4. Paint a picture of what good performance looks like

The part of the performance review form that asks “what could the employee be doing better?” is an opportunity to clarify expectations, to help the employee understand what you, as the manager, believe a good job looks like. It’s also an opportunity to address areas of poor performance, by contrasting what you expect, compared to the behaviours and performance you have been observing. What are the behaviours you want to see more of? Talk about them and focus on them, so the employee has a clear understanding of your expectations.

This item was first published in AUTOMOTIVE ELECTRICAL & AIR CONDITIONING NEWS (June/July 2022 edition)

John Girardi is a human resources consultant who runs Girardi Human Resources. He works with a number of employers in the automotive industry to provide outsourced human resource support, including providing Fair Work advice, drafting employment contracts, performance management, management training, and recruitment.

If you need assistance with conducting performance reviews or any other staff issue do not hesitate to contact me.