When you are running your own business, several areas will need your attention at the same time. But one of the most important is knowing how to make the most efficient use of the resources you have available. This extends not only to facilities, equipment, or software but also to your employees. Conducting internal evaluations can help both a company and its employees to streamline their work and make sure that no side is left wishing for more. But how to go about when evaluating your employees?
Step one: know what you are looking for
The first step towards an effective employee evaluation process is to pinpoint what it is you are looking for. This will help you decide on a methodology and criteria. You can take inspiration from other industries when choosing your game plan, especially companies that review and evaluate for a living. When reviewing new traders, for example, the top-rated forex brokers use over 200 criteria points, including account types, fees, and trading platforms. To identify these criteria, they have leveraged their own trading experience of over ten years. In particular, they have looked back on their own experience as new traders to develop a reliable methodology.
This is the same approach that would work for most businesses. You need to identify which criteria are important to you, and, in order to do that, it is good to go back to the basics. Think back on what the original mission of your company was, the values and the goals that should guide your operations, and how your current state reflects that. It is also important to put yourself in the position of your employees, perhaps by looking back on your own experience when you started in another firm, and identify what you would like to have learned about your performance to improve.
It is crucial to also include your employees in this process: before settling on a methodology, reach out to them. They will let you know what they would be most interested in understanding how they perform and in which areas they would want to receive feedback. The results might surprise you.
Step two: set up the mechanism
Every company needs its own distinct evaluation process. But for it to function properly, you have to make sure that your employees feel at ease to be truthful. Setting up a separate internal service to deal with employee reviews, for instance in the context of HR, can be more effective than having superiors evaluate their employees. While input from supervisors is important, when people work together for long, they tend to have their understanding distorted. Positive and negative bias can work against effective evaluation and you need to make sure that you eliminate as much bias as you can during the review process.
The best way to do that is to be transparent and objective. After you have selected your criteria, make sure that everyone is up to speed. Set up an awareness event and give training to your employees on how to provide the material needed for review, what factors they will be evaluated against, as well as on how to handle constructive criticism. Make sure that employee evaluations are conducted regularly so that everyone knows what is to be expected and they do not associate a review with being considered for layoffs. But make sure that these reviews are not carried out too often, as this can disrupt your operations and lead to low morale.
Step three: give feedback
The most important function of evaluating your employees is actually giving them a chance to improve and build on your feedback. Take notes on their performances throughout the whole year, do not just rely on the information gathered in the context of an evaluation. Compare findings across reviews, as this will help you to identify employees who struggle – and those who might be underperforming due to personal issues. Finally, offer support and make sure that you do not compare employees. What works for one might not be the best solution for another.
The key thing to remember is that employee evaluation works best when both sides are honest about their expectations. That way, regular reviews can help both the employee and their manager better plan ahead and harness the employee’s potential.