By Mark Di Vincenzo. Mark Di Vincenzo is a journalist with 24 years of experience, and a New York Times best-selling author.
Are performance appraisals necessary?
Let’s say you own a small business with 10 or 15 employees, and you have great people skills. You do an excellent job of communicating with your employees, telling them what they’re doing well and what they can do better. And you tell them all this in the most professional and tactful way possible.
So the last thing you need to do is give your employees annual performance evaluations, right? Wrong.
Here are 8 good reasons to do formal staff evaluations:
- You’ll have a written record of your employees’ strengths and weaknesses. You need to know this, and so do they. Employees want to hear what they’re doing well, and they need to hear how to improve. Evaluations should include more facts than opinions, because your employees will respond more positively to them.
- Your employees get an opportunity to tell you what they think they’re doing well, and what they can do better. Even if you disagree with them, you can gain insight into their thought processes, which can prove invaluable.
- Formal evaluations show employees that you care about their performance and development. Many workplace studies show that employees prefer negative recognition to no recognition at all. They want to know that their supervisors are paying attention. A comprehensive and well-reasoned evaluation takes time, and workers will feel good knowing that you feel they’re worth it.
- Evaluations do more than just spell out what workers have done well and not so well. They actually motivate employees and encourage them to improve.
- You, and your employees, get a chance to meet privately to discuss work issues that might not otherwise be addressed. During these one-on-one meetings, you can learn things about your business from the worker’s viewpoint, as well as discover information about other employees.
- Evaluations identify the need to offer training to employees. Employees who see their weaknesses on paper, particularly if they’re based on indisputable facts, are more likely to agree that they need help to do their jobs better.
- They help you determine whether you’re making good hires. By analyzing data from multiple evaluations, you can figure out whether you’re hiring people who are getting the instruction and training they need before you hire them, or whether they’re learning on the job. Your analysis may convince you to improve the way you recruit workers.
- Evaluations document reasons why employees should receive pay raises or promotions, and whether they should be demoted, or even fired. This written record, which should include very specific information, will be your best friend if a disgruntled former employee decides to sue your company for wrongful termination.
When evaluations are done properly, business owners and employees find them to be a positive and beneficial experience. And if they help your employees do better, they’ll help strengthen your entire organization.
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