I am a believer that employee reviews should not happen once a year, or once every three months. Employees should know where they're at and how they're doing regularly.
The reason is because a review once a year or once a quarter isn't impactful enough--not for the individual employee, and not for the company as a whole. If an employee is under-performing, and they don't hear about it until their next review, then that's only going to cause problems: the employee is going to think they're doing a great job, when they're not, and the company is going to suffer as a result.
On the flip-side, if an employee is working really hard and doing great work for the company, but nobody ever gives them that positive reinforcement, they're going to wonder if their efforts are even being noticed. They may burn out. They may get discouraged. They may even quit, simply because the feedback loop is broken.
This is a topic I feel strongly about, and I make mention of throughout my book, All In. Employee reviews should not be treated as one-off events you hold to say, "We held an employee review." An employee review process should happen regularly, and be used with the intention of improving employee performance.
Here are seven things every manager needs to communicate to their employees on a regular basis:
1. Employee reviews should be a general recap, not a surprise.
If what a manager shares with an employee during a review is a surprise, then there's not enough communication happening.
Employee reviews should be a general recap and a helpful reminder, not a surprise critic. An employee shouldn't be shocked to find out something they're doing isn't working. These things need to be pointed out in real time.
2. Set clear expectations the moment you make a new hire.
Too often, companies make hires without first establishing exactly what those new hires will be responsible for.
As a result, company leaders then get frustrated when their new hires don't deliver, when really part of the ownership falls on the processes within the company. If an employee fails, it's not just the fault of the employee--it's also a reflection of what's happening within the business.
Make sure that the moment you bring on a new hire, they know exactly what the expectations are. As long as you are clear and open about what they're going to be measured on, the review aspect should be fairly easy and straightforward.
3. Deliver both the bad news and the good news.
Don't sugar coat it.
If an employee isn't performing well, they need to know. I have watched so many managers sugar coat poor performance or use words like "opportunity for improvement." That's ok when the performance is satisfactory, but not when things are barely struggling along.
4. Raises are not synonymous with performance reviews.
This is a big one.
Is a performance review a good time to ask for a raise? Well, that depends how often the reviews are taking place. Some employees feel it's a good time to ask for a raise, simply because it's the only time they get actual face-time with decision makers. That, in itself, is a problem.
For the most part, reviews are either done at the year's end, or on an employee's anniversary. I am a believer that unless there is an arrangement made in advance, or they are on commission, everyone should receive an annual raise to at least keep up with inflation. When raises are expected beyond that, metrics need to be referenced to help an employee understand your decision--whether you gave them a raise or decided against it.
It's on the leadership team within a company to communicate those expectations.
5. Reviews should not be a "checking of the boxes."
Excellent, Satisfactory, Unsatisfactory, or Poor.
None of these words really help an employee understand what they're doing well or not doing well. Many managers take the easy way out by using these types of forms without giving clear, constructive feedback.
"Satisfactory" doesn't tell an employee anything.
6. Consistency is a promise--keep your promises.
Regardless of how often you hold formal employee reviews, what's most important is that you do not miss them.
One of the worst things that could happen is when an employee has to remind you, the leader or manager, that their review is due. This is disrespectful, and reveals an underlying problem in your communication practices within the business.
Employees that have to remind you that their review is due are clearly looking for feedback.
7. Have an employee do their own self-evaluation before their formal review.
Whether the self-evaluation is written or verbal, make sure you acknowledge all of the positives and contributions they make to the company.
In addition, you'll be surprised at one's opinion of themselves and how often their perceived contribution varies from reality. It can be surprising in both a good way and sometimes a bad way--but either way, it tells you important information about how they see themselves, and how you may be able to better empower them as an employee.