Improve Business Performance with Employee Reviews

Employee performance reviews serve multiple purposes. They provide reinforcement for good performance, offer a roadmap for career development, and build a foundation of reasons for termination if a forced separation is required. The assessment of the contribution—good or bad—is of critical importance so that all parties have a clear picture of the employee's work. As the business continues to grow, performance reviews will play an important role in business planning, hiring and firing decisions, and productivity needs.

Reviews should be conducted at least twice per year: one formal review to evaluate performance to goals and a second mid-year "benchmark" meeting to see if additional guidance or support is needed. Quarterly reviews may be required for difficult or troubled employees.

Assuming that the laboratory has not conducted any regular, formal reviews of its employees thus far, everyone should recognize that the process begins with a review of the business itself and setting goals for improved performance. Typically, the laboratory sets its sights on such things as increasing sales, reducing remakes, increasing output per technician, or improving its profit margin. Once these have been identified, then the actual employee review process can begin.

One particularly helpful tool for employee reviews is known as "360° feedback" (Figure 1). This simple 1-page questionnaire is used to gather information from a handful of the employee's peers—including their supervisor—regarding the their performance. Those who give their input are not identified to the person being reviewed. This tool allows the reviewer to get honest and unbiased information about the employee's performance, whether it is good or bad. Employees are often able to express their opinions freely about each other's contributions, and the reviewer gathers their ideas as to how the employee can improve, both technically and personally. The next step is to solicit feedback from the employee being evaluated. Have them complete their own 360° questionnaire and see how it compares with the peer feedback. This will help the reviewer identify goals for the employee and help set the stage for the next part of the review.

The next phase of the evaluation is to capture details as to the employee's success or failure to achieve previously established goals/objectives/assignments. The reviewer should document four key areas:

1. The purpose of the review;

2. Summary of the 360° feedback and accomplishments discussed with the employee, along with any comments the reviewer adds;

3. Mutually agreed goals/objectives for the coming year; and

4. Any written comments made by the employee and employer.

Setting goals for your employees is both a simple and challenging activity. The simple part is drawn from a combination of the 360° feedback and the employee's own desire to improve. The challenging part comes from linking the business goals—such as reducing remakes by 25%, increasing sales revenues by 10%, etc—to actions the employee takes on a daily basis. This may require additional training, overtime, and/or equipment upgrades without which the employee cannot improve.

Finally, provide copies of the summarized 360° questionnaire (making sure no peer names are noted) and the agreed-upon goals/objectives and comments to the employee and their supervisor, and add to their personnel file. These documents provide justification for promotion, salary adjustments, additional responsibility, and employee growth. At the same time, they can also contribute to the documentation that many state laws require as evidence in age discrimination or improper termination issues.

Personal growth goals, number of skills achieved, and knowledge of laboratory standards are all required to properly evaluate employee performance. Reviews, when done properly, provide guidance for both employees and owners of the laboratory in achieving the business's yearly goals and objectives.

Bob Yenkner is the owner of Practical Process Improvement in East Hampton, Connecticut.