I believe most of the problem stems from the fact that performance reviews are regarded as an “annual project.” If employees and managers regard performance reviews as an everyday thing, the dread factor is reduced to zero. But, who has time to do reviews every day?

Suppose for a minute that you could wave a magic wand over your operation and have every employee know exactly what is expected of them all day, every day. Now, consider the possibility of your management team monitoring the performance of your business by managing the employees' expected work outputs. You would be providing specific objectives and managing based on accomplishment. Would there be any doubt in either the employee's or manager's mind about how he/she was performing?

Those who might be skeptical about this approach and believe it would cost far too much time should consider the time it would save - not just in the review process, but in the day-to-day operation of your business.

As far as performance reviews themselves go, they are an opportunity to tie the company's mission and strategic plans into the individual employee's daily tasks. And, they are an opportunity to develop and guide employees toward their career goals. When properly executed, performance reviews result in the employee becoming more “engaged” in the success of business.

Regardless of the business size, all managers should fully recognize that performance evaluations are an integral part of the employee development system. It is a tool to measure the strengths and weaknesses of an individual, and a platform to effect positive change and growth. And, in the event of continued weakness, the performance review is solid file documentation of your attempts to identify and remedy the situation.

Finally, performance reviews help you build the skills and competencies anticipated for the next possible position that an employee might move toward in an overall succession plan.

Sidebar: Best Practices

8. Have a formal, annual performance review requirement for all employees.

The performance review process becomes much easier once job descriptions are in place. Then, all measurements can tie back to the competencies listed in the job description. The employee knows his/her responsibilities and the metrics to be used in assessing his/her performance. This takes the surprise factor out of reviews, by allowing you to set clear expectations and goals. And, it allows you to get employee “buy-in” prior to the start of the review period.

You should also evaluate your performance review process on a regular basis, to ensure that it aligns with the overall company mission and strategic goals. At the same time, you should verify that all managers are linking company goals to the individuals' goals. The final step is to make sure that your managers properly apply merit increases and other incentives to individual performance and company success.

9. Train all managers on the proper use of the performance review system.

For a variety of reasons, performance reviews never rank among managers' highest priorities. Regardless of company size, senior management is responsible for changing that perspective in the new millennium. In some respects, smaller companies are more vulnerable to a single poor performing employee - you're only as strong as your weakest link!

Train managers in contrasting job descriptions to actual performance and on monitoring performance all year long. Train them in proper review writing and delivery techniques and on how to handle the tough issues, like salaries and raises. Concern about these issues often fuels manager procrastination.

Provide the employee with a copy of the review ahead of time, so he/she can review it - and, always make certain that reviews occur on time.

For more information on quality performance review techniques, visit a special Web site page we've set up for the purpose at www.hawsco.com/gm.