Bracing for that perennial chore: Performance reviews

It’s performance evaluation time at many companies, and for managers it’s time to brush up on ways to break good and not-so-good news, such as:

• “We’re giving you more responsibility but no raise.”

• “You hit all your goals, and now you get tougher ones.”

• “You’re still employed, but we’re putting you on a performance improvement plan.”

A frank discussion with employees about work performance, salaries and bonuses can get emotional, sometimes resulting in anger, defensiveness, arguments and even tears. 

“Honesty is the best policy,” said Bill Rosenthal, CEO of East Hampton, N.Y.-based Communispond, a business-communications consultancy. “Tell [employees] that you have feedback to help them improve their performance at work, and then be specific. The key is to frame it as offering help, rather than just criticizing. You’ll be surprised how much more receptive people are to feedback if they feel it’s given to help them, rather than to punish.”

Needs improvement

Among a manager’s more difficult tasks is telling a subordinate that his performance isn’t up to snuff. Rosenthal recommends “sticking with the facts” and avoiding subjectivity by being as precise as possible.

“If you force yourself to look for specific examples of work you want to praise and work you want to improve, you’ll be surprised how you can make evaluations more objective. Ask the employee if he [or] she would like some feedback to help them be more successful. If he or she says no, then you won’t be wasting your time giving feedback that merely bounces off. If they say yes, then you already have them invested in the process.”

Be prepared for excuses, defensiveness and arguments -- but also be prepared to consider the worker’s point of view.

“When they present an excuse, it’s often effective to show you are listening by acknowledging what you’ve heard,” Rosenthal said. “Sometimes the opportunity to vent over an issue and know the boss hears your side of the story can make someone feel better and more open to hearing your feedback. If the facts warrant consideration, then give it. Sometimes things beyond someone’s control really do happen, and you’ll be seen as a more effective and understanding boss if you recognize when an excuse is honest.”

Praise where due

On the other hand, Rosenthal warns against being too vague or stingy with praise.

“Flowery, purely emotional words, like ‘great,’ ‘super’ and ‘well-liked,’ don’t really say anything factual and can lead to claims of subjectivity,” he said. “Telling somebody they are ‘great’ or their work is ‘wonderful’—this kind of nonspecific praise wears off very quickly.”

Some companies refrain from giving top scores on performance evaluations, in part because doing so may inspire too many demands, such as for higher salaries or promotions. This can be disheartening for your top employees, Rosenthal said.

“If you are not being truthful in giving someone a deserved high score, others find out, and it stirs mistrust with management,” he said. “Sometimes people rise above expectations, and when they do, it is good business to be fair and give deserved recognition.” 

And while no employee is perfect, don’t hunt for areas of improvement just because you fear an evaluation is too glowing.

“If you can honestly tell someone that they’ve aced their goals, you are proud of them and want them to continue to succeed, then do so,” Rosenthal said. “You may even ask, if appropriate and applicable, if they have any suggestions to help others to perform similarly, thus getting them invested in the success of others.”

Moving target

Many companies set what they call “stretch” goals for their workers. Managers should indicate whether salary, bonuses or other compensation will be tied to meeting those goals.

“If you want to give stretch goals, then you should be clear at the outset of your expectations,” Rosenthal advised. “Do you expect everyone to meet these goals? Then maybe calling them ‘stretch’ is a misnomer. Or be clear that the stretch is just that, so people don’t start to feel as if [the result of] missing the stretch is punishment.”

If it’s a raise your workers want, they may be dismayed by Forbes magazine’s Thanksgiving-week column titled “Seven Ways to Increase Employee Satisfaction Without Giving a Raise” -- or that government labor data show the large majority of U.S. workers have endured more than 10 years of anemic wage growth, whether they’re men, women, blue-collar, white-collar, in the private sector, in public service, armed with a college degree or a high school diploma.

But that may not soften the blow when a manager must tell an exemplary employee that her salary isn’t going up.

While a bigger paycheck is important to a lot of people, Rosenthal said, managers needn’t worry about high performers heading out the door if the workplace values leadership, integrity, community, flexibility and other qualities that don’t have a price tag.

“A quick Google search of what makes a good workplace will yield, literally, millions of results, and many will show that compensation and money aren’t usually at the top of employees’ lists,” he said. “If you honestly can’t provide more money -- or even if you can -- there are many things you can do to keep employees happy.”

Dana Wilkie is an online editor/manager for SHRM.

© 2013, Society for Human Resource Management.

Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).