Performance reviews are supposed to be an opportunity for management and an employee to discuss how the employee's performance could be improved. It should be a chance for the employee to tell management what he needs and a chance for managment to offer feedback on these needs and on his performance to date. If there are problems which are preventing the employee from reaching his full potential, these should be addressed at this time with the aim of finding solutions.
Instead, management in large corporations often uses the performance review as a tool to allow management to promote or get rid of an employee. You got more new orders than anyone else but you also got a bad performance review? Better dust off your C.V. There's a pink slip with your name on it in the pipeline. Your year has been a disaster but your performance review is great? You've got general manager written all over you. Not that that's good news - the old general manager made VP just in time to hand his mess over to you. Your performance review is ambiguous? OK, your job's safe for now. Here's a clever Dilbert link to demonstrate.
So, here's a competitive advantage for a small business. If you handle performance reviews properly, you'll get better performance from your employees than the large corporations. Properly means:
- formal, regularly scheduled performance reviews for all employees;
- constructive discussions of both employee and management concerns;
- concrete solutions where possible;
- explanation of the company position where it is not possible to meet an employee concern;
- acceptance of an reasonable position if an employee cannot meet a management request;
- follow-up to make sure the solutions are implemented on both sides.
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