How to Do End-of-Year Evaluations Right

As the year comes to a close, it’s time to start evaluating how the company did and developing plans for the coming year. For most employees, the year ends with the dreaded performance evaluation.

Often a source of stress and fear, evaluations have come under debate in recent years, some arguing that the traditional performance management system is dead and others that it requires a major overhaul. The main source of fear among employees seems to stem from getting it wrong — whether it’s an exceptional employee who doesn’t get the credit they deserve or an employee who thinks of the scoring criteria differently than their manager does.

Call me old-fashioned, but I still believe that the performance evaluation has a part in our professional culture and plays an important role in employee development. However, how you conduct end-of-the-year evaluations matters, and to do it effectively, you need to start planning on January 1.

Here are four tips to get the performance review right.

Start with a Scorecard

Jeff Smart and Randy Street’s book Who? deals primarily with hiring the right people. They discuss creating a scorecard during the hiring process to ensure that you end up with the right employees on your team.

According to them, “The scorecard is not a list of job requirements. It is a description of the results you want the person you hire to achieve.”

At the start of the year, use this framework with your management team and encourage them to sit down with their employees to develop a list of 5-6 results that they’d like to see that year. It’s easy to be bogged down in day-to-day activities when thinking about goals, but basic job responsibilities like “oversee newsletter creation” have no place on a scorecard.

Likewise, be wary of creating goals that can’t be quantified or proven. “Improving communication skills” sounds like a nice goal, but push employees to think of what the results of that look like. Did they attend a professional development course on communication? Did they receive higher client survey results in that area?

Start with the end goal in mind, and evaluations will be much easier down the road.

Provide Feedback Regularly

Once the scorecard is in place, managers should meet with employees monthly to discuss it. It’s likely that employees already have a monthly one-on-one with their managers, so encourage them to blend the scorecard into that discussion.

What progress have they made on their goals? What are they going to do over the next month to achieve them? Is there anything they want to add to the scorecard?

As you discuss, allow employees to amend the scorecard throughout the year if they need to and give them honest feedback on how they are progressing. Regular feedback from managers helps ease the stress of an end-of-year evaluation.

Encourage Praise

At my company, Greenleaf Book Group, we celebrate employee successes by sharing praise twice a month — one instance focusing on praise coming from our clients and one focusing on internal praise among employees.

The sharing of praise is not only a great way to boost employee morale and show appreciation for the work they’re doing, but it also provides employees with another form of feedback that they can easily tuck away throughout the year to use during their evaluations.

Encourage employees to keep a list of wins throughout the year that they can pull out when it comes time for evaluations, rather than trying to pull information from memory later.

Tie Your Evaluation to Core Values

As the end of the year approaches and it’s time to start gearing up for evaluations, there are several things to keep in mind when creating the evaluation itself:

• Tie the categories in the evaluation back to your company’s core values. Our company values empowerment and stewardship quite a bit, so the evaluation categories tend to focus on initiative and client communication. This keeps the categories broad enough that all employees should be able to respond to each section thoroughly.
• Go back to the results you asked for on the scorecard. Don’t just ask employees to give themselves a rating and a vague explanation of why. Ask for the results they achieved in each category. The scorecard should provide a framework for this. If they failed to achieve one of the results on the scorecard, they can’t claim to have done “Outstanding” in that category.
• Clearly define numerical scores. If employees are being ranked on a scale of 1-5, make sure that everyone in the company understands what each number on that scale means. One of the most common sources of disappointment for employees is coming into an evaluation and finding that their own appraisal of their work is vastly different from their manager’s. Especially in bigger companies, this data can have a big impact on compensation, so make the scale as clear as possible.

Performance management does not need to be a scary process. As long as some work is put in throughout the year to set employees up for success, the end-of-year evaluation will become much less painful for everyone involved.