Employee evaluations

Everyone knows the rhetorical importance of conducting employee performance evaluations: praise strengths, document weaknesses and develop a perfunctory action plan that will not be reviewed again until next year’s performance evaluation meeting.

Developed by Odiorne (1984), a more strategic approach to employee performance reviews requires that all employees be evaluated on their current level of performance effectiveness (i.e., performance), as well as the likelihood that they will be promoted in the next 18-24 months (i.e., potential). Thus, using the diagram to the right, consider evaluating each employee using a 1-5 scale (“1” being low, “3” being average, “5” being high) on current performance and future potential. That two-fold rating paradigm yields four possible combinations of employee value.

Dead wood: Employees who are below average on job performance and below average on potential –these employees are not performing well in their current position and lack any likelihood that they will be promoted in the next 18-24 months. These employees represent significant risk to the company and should be put on a 30-day action plan, with the probability of dismissal being very high in that they possess neither current nor future value to the company.

Problem employees: Employees who are below average on job performance and above average on potential – these employees need ongoing coaching for 3-6 months to overcome some hindrance (e.g., family problem, bad boss, personal issue, no connection to the company, insufficient communication) preventing them from growing with the company and adding future, albeit latent, value.

Work horses: Employees who are above average on job performance and below average on potential – these employees are solid performers, though unlikely to be promoted to the next level. These bedrock employees are critical to company success: steady, responsible, ethical. Stated succinctly: They get the job done, day in and day out. These employees must be appreciated frequently, treated with respect at all times and never ever taken for granted. Employee recognition ceremonies are perfectly designed for them to receive sincere and well-documented gratitude from ownership, peers and staff.

Stars: Employees who are above average on job performance and above average on potential – these employees are transformational, coupling a strong work ethic which positions them as current role models for others, while at the same time demonstrating advanced insight necessary to take the company to the next level.

These employees need a well-designed development plan to keep them engaged and challenged, motivated and rewarded, explicitly underscoring the company’s succession plan, organizational culture and growth plan for years to come.

To support this dual-focused performance evaluation model, managers must evaluate their subordinates on both dimensions, though only sharing the job performance ratings with the employees at the time of the annual review. The potential ratings are kept strictly confidential to avoid any sense of entitlement or fraternal schism with other employees.

A high-quality, non-bureaucratic performance evaluation system that focuses attention on both employee performance and employee potential can achieve all of those goals. L&L

Contact Steve Cesare at harvest@giemedia.com