The Performance Review: Formal or Informal?

A performance evaluation is an opportunity for a manager and an employee to meet and discuss the employee's job performance, organizational priorities, and performance goals. For employees this process can be something they dread or look forward to. Despite being a star employee there might be things that they can still improve on but receiving that type of feedback can feel like being put in front of a firing squad. As new generations continue to enter the workforce the way they receive feedback varies. Formal processes can seem daunting, where an informal review might put them at ease.

Can the actual performance review, where promotions and raises are being determined, be informational and informal? Yes. The informal review process takes stress off the back of the employee and gives the manager the ability to connect with them on a level that is less daunting. What about the legalities in pay raises and formal coaching processes? Are those informal too? The way a manager handles a situation determines the answer to that question. No matter what happens, there should be a period where the manager takes a step back and collects their thoughts before handing out corrective action. Use this as an opportunity to build a better relationship with your employee.

Compensation is the number one question on your employees’ minds when it comes to any type of performance review. They’re thinking, “It’s been 6 months, do I get a raise? Will I get a raise after another year?” Unless you’re in Human Resources you may avoid questions that have to do with raises and bonuses because it’s a sensitive subject for many employees. Creating an informal communication channel about important topics such as compensation will allow for better work relationships.

Far too often supervisors avoid the crucial, honest, sincere, developmental one-to-one discussions between their employees and instead focus on taking the safe route and simply checking a box on the Performance Review when dealing with compensation. We are no longer in 4th grade where simply checking “Yes” or “No” is acceptable. We go down the road of formal compensation processes because we want to avoid doing, saying, breathing, moving wrong or anything else that’ll have recourse of legal action.

Along with the need to go away from the formal performance review is the connection between that and compensation increases. If no correlation can be made between the two, should they be separated? Can you really deny an employee a raise or some type of increased compensation if they don’t have any negative reports on file and their performance has been as par with the rest of the organization?

The review process of traditionalists no longer works for that of Generation Y or Z. Companies need to look for ways to effectively evaluate their employees in a way that doesn’t create mounds of stress, which could produce an atmosphere of fear of losing one’s job. This type of atmosphere decreases productivity and ends up making employee retention more challenging and pushing turnover rates higher.

Reprinted with permission from Pay Scale,

P•A•S Associates has expertise in human resources and other areas involving employment issues. P•A•S Associates, in providing this tip, does not represent that it is acting as an attorney or that it is giving any form of legal advice or legal opinion. P•A•S Associates recommends that before making any decision pertaining to human resource issues or employment issues, including the utilization of information contained on this website, the advice of legal counsel to determine the legal ramifications of the use of any such information be obtained.

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