The employee performance review. It’s an opportunity to congratulate workers on a job well done and celebrate their wins. It’s also a chance to provide constructive criticism and discuss ways to improve performance. But what makes for an effective employee performance review?
And, if pay raises are frozen or you simply don’t think the employee’s performance warrants a raise, how do you retain employees and motivate them to continue upping their game? It’s a question that supervisors and human resource managers have struggled with for years.
After taking into consideration the role of the employee being evaluated, most manufacturers consider one of the following two review approaches.
1. Appraisal by Production
This is “by-the-numbers” method looks at the most objective factors, such as quotas:
- Did the employee meet or exceed company or department goals?
- How many units did he or she produce in relation to other employees?
- What was the average speed per unit?
- Was the employee punching in and out on time?
2. Appraisal by Essay
This method involves questions of a more subjective nature, and may require input from others depending on the reviewer's familiarity with the employee. Here, discussions revolve around:
- Employee strengths and weaknesses
- Overall attitude and performance
- Willingness to help others
For small and medium-sized manufacturers that don't have the time-consuming task of evaluating thousands of employees, a more personalized combination of the two methods is recommended. Not only does it present a much more well-rounded picture of the employee, it shows the employee that, while their output is important and goals must be met, they are more than just a “cog in the machine”; that management has looked at factors outside of just speed and units produced to make their evaluation.
Other simple rules that managers in manufacturing and across all industries should keep in mind in order to deliver an effective performance review.
Some managers feel that overpreparation makes a performance review come off as too formal and rigid, when they want the employee to feel comfortable and make conversation. However, the opposite is true. If you’re unprepared, the employee will feel unprioritized—that even though this is his or her “moment,” you didn’t make time for it. So instead of winging it, review the employee documentation you have been maintaining throughout year or the quarter; speak with the employee’s direct supervisor; and have a list of goals they should be striving for.
Is praise as effective as a raise? Mary Kay Ash thought so. “There are two things people want more than sex and money,” she once said. “Recognition and praise.” And she may have had a point. Gallup Research reports that praise has been shown to produce a 10-20% increase in revenue and productivity, whereas employees who report they are not adequately recognized are three times more likely to quit within the year. So unless you’re dealing with a habitual problem employee, the positive should outweigh the negative during a review. Highlight some of their achievements, and share positive comments you’ve overheard from others.
Too much talking on your part can make the review seem more like a lecture. That’s why it’s important to create a dialog, one in which the employee is speaking as much (or perhaps more) than you are. This is as much a chance for them to discuss their successes and setbacks as it is yours. Lucas Group, a recruiting firm for manufacturers and other industries with offices throughout California, recommends some of the following conversation starters:
- What accomplishments are you most proud of and where would you like to improve?
- What have I done to help or hinder your job performance?
- What are your goals for the coming quarter/year and what do you want your next position at this company to be?
Even with California becoming the first state in the nation to require manufacturers to raise the minimum wage to $15 per hour by 2022, employees may still come to a performance review with the expectation of more money. Unfortunately, that’s not always an option. So how do you motivate employees without money? We’ve identified three different ways.
Create a Company Culture
In the past, employees punched in and punched out. Perhaps they still do. But that’s beginning to change to meet the needs of millennials, now the largest generation in the workforce. Unlike their parents and their parents’ parents, millennials want to be part of the “big picture,” and to be able to contribute to the company. Tom Gimbel of Fortune writes that “for a lot of millennials, [money and title] matter less than the company mission, feeling challenged, and making a difference in the organization.”
There are many ways to create a company culture, but it should develop organically. One way for this to begin happening is open communication. Don’t keep your leaders behind closed doors in executive suites; instead, have them near the ground floor and accessible to employees. Create an open-door policy where anyone can feel comfortable at anytime speaking with upper management. And allow employees to contribute regularly, offering ideas for improvement and innovation.
Recognize Employees the Right Way
We’ve already mentioned the desire each of us has to be recognized. But not all employees want to be recognized in the same way. That’s why a “one size fits all” approach to recognition such as an Employee of the Month program often does more harm than good. If it’s the same face every month, resentment builds; and if it’s just a rotating sea of faces, then it becomes the equivalent of a participation trophy and cynicism builds.
Jim Harter, co-author of the New York Times bestseller 12: The Elements of Great Managing, says the best way to find out the right way to praise an employee is to simply just ask. “Great managers are extremely effective in figuring out the best form of praise for each person,” writes Harter. “Some managers worry that they can give employees too much recognition. But research shows that it’s extremely difficult to do that, as long as the recognition is right for the person.”
Allow for Flexibility
The number of Americans telecommuting, or working from home, has grown by over 115 percent since 2005. In manufacturing, where this is often not an option, you can still offer employees some flexibility in a number of ways:
- Work days
- Work hours
- Break times
- Days off
Perhaps it’s letting them put in ten hours per day Monday through Thursday so they can have Fridays off. Or maybe it’s letting them work 7am to 3pm so they can be home when the kids get back from school. Any flexibility you can offer shows them that you respect their time and their schedule.
Motivation comes in many forms, but it doesn’t always have to come in cash. Delivering effective performance reviews while building company culture, recognizing wins, and offering flexibility can help grow both your company and your employees.