Often greeted by manager and employee alike with an enthusiasm level befitting a root canal, reviews can - and should - do more than provide a forum for venting frustrations or communicating a raise (or lack thereof). Done right, a good review process:
- reinforces company culture
- keeps the right people in the right places as company evolves
- creates paths for professional growth
- identifies training needs
- ensures one-on-one time for employee and supervisor
- and builds a philosophy of continuous improvement.
Remodeling firms with quality human resource programs in place use an evaluation system that begins before hiring and continues until an individual's last day. The system should be applied universally, keeping both the reviewer and reviewee accountable to set standards rather than letting the reviewer's personality drive the evaluation.
"Some bosses are halo people: rose-colored glasses; 'Everything's fine'; they like everybody; 'You're all superstars,'" says human-resource consultant Bob Hand-werk, president of RLH & Associates in Delavan, Wis. He works with builders and remodelers throughout the Midwest. "Then you have the draconian guy or gal on the other end who says, 'Everybody's terrible; nobody's as good as me.'"
What does a good process look like? Interviews with remodelers and human-resource consultants reveal the following checklist.
Must-haves for a productive performance review
1. A job description. Every position in the company should have a written job description. The description should be shared with prospective hires during the interview process, but shouldn't just get shoved in a folder or drawer after the first day of work. "I don't know how you do a job review if you don't have a job description," says Julia Spence, vice president of human resources and communications for Neil Kelly Company in Portland, Ore. "We each have a job description that lists our primary responsibilities and expectations for everybody."
Those expectations include items such as "be a team member," "abide by safety" and "speak up and participate." Neil Kelly, a 57-year-old remodeling firm, employs 95 people among its design/build, new home and home repair divisions. Ultimately everyone reports to owner Tom Kelly, but a six-person management team that includes Spence directly supervises most employees.
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In addition to a job description, some companies put job requirements shared by everybody on staff in a company manual. HomeTech Renovations in Lansdale, Pa., has a policy and procedure manual that addresses paperwork processes and dress code, for example. Owner David Cerami, who handles the bulk of the human-resource functions at his 10-person interior remodeling firm, appraises employees on compliance with the manual as part of their reviews.
2. An evaluation form with defined criteria. Like any other business document, personnel reviews come in many different formats (see Related Information for examples and resources). "Every company is structured differently, every company needs the right plan for them," says Spence. "We're after continuous improvement and people having a sense that what they're offering is valued and on track."
To foster that spirit, about eight or nine years ago she eliminated a numerical form where managers rated employees on a scale of 1 to 5 in different areas. Instead, Spence developed a narrative format with open-ended questions to elicit more information from the participants and keep them focused on substance, not scores. "With the check-off sheet it was more, 'What does this mean?' or 'I want a 5, not a 4,'" she explains. "People got hooked on things that didn't really matter."
The questionnaire asks about performance based on job description, changes in job duties, performance against previously set goals and potential goals for the year ahead. It also reminds employee and manager alike of the shared commitment that achieving these goals will require.
A numerical format has advantages, though. Based on his prior management experience in the food service industry, Cerami developed an evaluation form that rates workers in nine different areas, from attitude to quality of work. Using numbers helps to benchmark performance even in areas like attitude, which has more to do with behaviors than results or skills.
The important thing, he says, is to back up those ratings with measurable criteria that can be discussed during the verbal review. For instance, determining an employee's score on customer satisfaction would include analyzing client feedback and scores from customer surveys.
"Many pieces are intangible, so it becomes hard for an employee to fully grasp his grade or his score," says Cerami. "We try to document and track so there's no gray area where employees can feel they're getting the short end of the stick or, 'He just doesn't like me.' We don't want that situation."
Barbara Truman, who has worked for Cerami for six years as HomeTech's office manager, says, "You, as the person being reviewed, know what areas he's going to be looking for." She adds: "You never get the perfect score, and unless you're really, really bad, you never get the lowest either. It's more important to have the commentary underneath it."
3. Self-evaluation prior to the review. As Truman implies, having a set of criteria against which to measure employees does no good unless they know what those criteria are from the day they start. That could mean giving employees a copy of the evaluation form upon hiring or verbally reviewing expectations during orientation.
Having employees evaluate themselves before the actual review reinforces the idea of being responsible for one's own actions and puts non-managerial employees in a manager's shoes.
"We ask employees to complete it and grade themselves," says Truman, who has no direct reports but often provides feedback on HomeTech's field employees. "We need input from them as to how they want to continue to grow within the company. Sometimes they give feedback more freely that way."
In a small office with lots of interaction, she says, most people know their strengths and weaknesses. Even so, she acknowledges, "sometimes you feel your efforts might get overlooked in the hubbub," and the self-evaluation gives employees a chance to point out accomplishments and indicate training needs.
Having the self-evaluation before the in-person meeting allows the manager to identify disparities in perception and to investigate further if necessary.
"The fundamental purpose of an evaluation is to allow the employee to understand the expectations of his immediate supervisor and vice versa so expectations are met on both sides," says Cerami.
4. Feedback from more than one person. Asking co-workers or other managers to participate in an evaluation garners a wider range of information, especially in growing or larger companies where a supervisor can't know what's going on at all times. Neil Kelly Com-pany requires employees to choose a handful of colleagues from whom to request supplemental reviews. Spence, for instance, says that her review with owner Tom Kelly would include feedback from other members of the management team as well as the office manager, who reports to Spence, and possibly an employee in another department with whom she has collaborated.
"Because employees have the opportunity to be choosing some of the other people who are going to be reviewing them, it helps people to feel confident that what's being seen is the real picture," says Spence. The supplemental review forms go out about 10 days ahead of the sit-down meeting and go back to the boss, not the employee, although the boss does share them at the review. If the manager suspects the deck has been weighted too heavily in the employee's favor, he or she can seek out additional supplemental reviews, says Spence.
This type of review, which involves evaluations by supervisors, peers and direct reports, is called a 360º. For company owners, who don't get a performance review unless they have a board of directors, a 360º can be invaluable as a management development tool.
Dan Griffin, owner of 15-year-old remodeling firm Griffin & Associates in Mundelein, Ill., has been working with consultant Bob Handwerk for 18 months to improve hiring and review practices. Griffin quickly decided that he needed to grow as an owner and manager if he wanted his company to grow, so he started using a 360º online program from Profiles International that Handwerk favors.
"Oftentimes the only way we evaluate ourselves is, 'What does the balance sheet look like?' and 'What's in the checkbook?'" Griffin explains. "That's never the right way to do that, not if you want to be in a growth pattern."
The form rates an individual on 70 leadership behaviors organized into 18 skill groups that in turn fall under eight competencies. Griffin's employees go online to complete the form anonymously, rating him on a scale of 1 to 5 in each of the 70 areas. Griffin rates himself online in the same way. Profiles International then creates a report that shows where Griffin and his employees agree and disagree. In a larger company with more levels of management, the report would compare the self-evaluation not just to the overall average responses but also with responses from just the employee's manager, just the employee's peers and just the employee's direct reports.
"It has been a good evaluation tool for me," says Griffin. "It keeps me focused on where I need to improve and where I'm doing well." He does this review twice a year and plans to roll the 360º out to his two lead carpenters soon, hoping to grow one of them into a production manager role as his company's volume grows.
5. A one-on-one meeting - accompanied by regular communication throughout the year. Typically reviews are conducted annually, often at the end of the fiscal year or around an employee's anniversary. The in-person meeting allows the manager to discuss feedback from the evaluation forms, ask about his or her career goals, talk about how to improve performance and explain future opportunities at the company.
"I not only like to meet with Tom and be reviewed, I like to give reviews," says Walt Hardow, vice president and general manager of Neil Kelly's home repair division. "It gives us uninterrupted time to talk about them and business and what they like to do, how we can help them do better. A review shouldn't be a surprise. I don't wait until I meet with somebody once a year to tell them good things or bad things."
Hardow joined Neil Kelly seven years ago and now manages about 20 employees, including sales people, carpenters and "sales carpenters," who did both functions. "One of the first things I did was hold one-on-one meetings and ask them if they were happy with what they were doing," he recalls. "There were eight sales carpenters. Seven of them hated it, so they went back toward doing just carpentry. They were either uncomfortable selling or didn't have the organizational skills to do both. That was very helpful, and I think they appreciated it."
6. A resulting action plan. No doubt about it, conducting formal employee appraisals is a lot of work. Don't let it go to waste by emerging from the meeting without having set goals for the year ahead. Goals should be measurable and have deadlines attached. This plan should be written out, agreed to and signed, just like the evaluation form. It also might call for rewriting a job description or adding an item to the evaluation form.
"I list some things I'd like to see, they list some things they want to do, and we agree on some," offers Hardow. "Some are business and maybe some are personal." Data from customer surveys and from project reports, such as whether jobs came in on time and on budget and any warranty requests, help inform his decisions on technical and communication training needs. Personal concerns might require a referral to the employee assistance program.
Griffin looks back at the "bloodless autopsies" that follow each remodeling project as well as any skill gaps identified during hiring to help his employees spot areas for growth. "There is immediate feedback," he says. "We're not waiting once a year to have an evaluation; we're having one every month or two."
For his own growth, Griffin looks to the report he receives from Profiles International after each 360° evaluation. It includes suggestions on areas for improvement as well as ideas on how to do so. "We have no one to answer to but ourselves," he says. "Sometimes it's good to have someone to take you to task and hold your feet to the fire to do that."