It’s that dreaded time of year again for many managers. Human Resources Managers send out the memos to make sure that all managers complete the annual performance evaluation form for their direct reports on time. This is akin to asking a guy to go out shopping with his girl on Black Friday. It is probably the most dreaded task next to firing an employee that a manager has to do. Is there any hope? What can managers do to make it an easier and effective task?

We have come to an impasse in many organizations when it comes to giving employees feedback. Most managers are terrible at it because at the core a manager is still a human being and human beings hate conflict and will do whatever they can to avoid it. The effect begins to snowball and a problem employee that throughout the year was performing below expectations all of sudden is meeting them when the manager reluctantly hands in his evaluation form. Fast forward to the next year when the manager comes screaming into HR and demands that this very same employee who was cutting it at year end is no longer meeting goals and must go! Documentation says otherwise so the manager must hang on again to a substandard employee. Talk about a time waster.

In addition to the plain old task of completing the form, managers are also faced with other perils associated with managing employees’ performance. I have compiled a list of the top 5 perils and describe some of the new ways managers are tackling this task and getting better results.

Peril #1 Completed form does not equal feedback.

Completing a form in and of itself does not constitute “giving accurate feedback” to your employee. Performance management is about managing performance through ongoing consistent and accurate feedback. This means actually engaging in a live conversation with your employees and sharing the good, the bad, and the ugly. Believe it or not most employees do want to hear what they are not doing well so they can aim for improvement. Get talking and don’t worry so much about a form. It’s about the conversation and using real life behavioral examples to back up your ratings.

Peril #2 Short Term Memory

What have you done for me lately? Most managers get stuck in the short term memory rut and when they wait until the end of the year to complete their reviews the unsuspecting employees only gets remembered for what they have done at the end of year. Our memories are not that good. Take the time throughout the year to jot yourself a note or keep an online file of the results your employees achieved. Make sure the evaluation encompasses the whole 12 month of your employees work.

Peril #3 Halo and Horn Effect

“Blair has always been a great employee in the past so he must have been a great employee this year too.” Be careful not to subject yourself to the Halo or Horn effect when evaluating your employees and really look at detailed results and demonstrated on the job skills. Just because someone has performed well or really poorly in the past does not mean that they automatically should be at the same rating year after year. Look closely at the goals and objectives and how and if they were met. Consider raising the bar each year in terms of level of performance desired. Keep challenging your employees to raise their level of performance too– that will do more to keep them engaged as long as they see where their work adds values to the overall organization’s goals.

Peril #4 No one ever gets a 1 or a 5.

We do not all live in Garrison Keillor’s “Lake Woebegone where everyone is above average”. If your performance evaluation form has a scale then use the full range of the scale. Give your lowest performers the 1’s and 2’s and save your 3’s for those who are meeting expectations while your superstars should get the 4’s and 5’s. I have worked for clients whose unwritten policies were that “no one ever gets a 1 or a 5.” Well then why do you have those on your scale? The key here is to truly differentiate between performance and you have to do that with actual results and feedback from others on how this person works –especially if your firm ties pay to performance this is critical that you get this point right. What to do if you use the full scale but your colleague in the next department does not? Get HR to help you set up calibration sessions or use HR to double check rating to ensure they are not under or over inflated.

Peril #5 Career path? What career path?

Managers deliver the feedback and then move on to the next year’s goals. Employees want more. They want and deserve to know what to do with the feedback they have received. If you can put it into an individual development plan – show them how and what they can do to leverage their current strength and build stronger competencies in the areas needing attention. Connect the dots for the employees between how their efforts on improving their skill will lead to better performance in the job or in preparation for the next job. Don’t just leave them hanging. Discuss future career opportunities and how you as their manager will help them achieve their goals. Again this means setting up a planned integrated way of having regular conversation about their development, progress and future with the organizations.

If managers can avoid these 5 perils then they will have a greater likelihood of having easier conversations with their employees. Easier conversations mean less dread around the task. Delivering powerful performance appraisals is as critical for organization not just for the obvious reasons but the Workforce Intelligence Institute research found that companies who did Performance Management well experienced the following:

• Strong correlation between a company’s financial performance and an effective goal setting process.
• Employees in the weakest performing companies did not clearly understand the connection between their individual efforts and the overall goals of their employers.
• Employees reported feeling less confused as to their roles which resulted in greater productivity
• Quicker execution of company strategy
• Better allocation of resources
• Reduce redundancies
• Decrease employee turnover by increasing employee engagement and “ownership”

Future Trend: A new trend in performance reviews is what is called “Open Performance Reviews”. Companies that use this approach open up the review process to contributors outside the formal management chain by using social connections, mobile access and Web 2.0 services. This results in effectively socializing performance reviews so that managers get better real-time analysis of workforce capabilities and can accelerate the employee’s development