Well, yes, someone does care, the employee. They care because it affects them personally. Let’s face it, most employees who come into your office for a review are interested in only one thing...HOW MUCH OF A RAISE AM I GETTING???!!?? You can practically see their brains smoking from the heat of anticipation. They don’t pay much real attention to what you’re saying about their performance because they’re scanning ahead to the bottom line figure. Anything you say to them before that is only white noise and anything you say after that is filtered through that percentage number. So, why DO you waste all that time going through the agony of filling out performance reports? Or, if you don’t, should you be? Are they really useful for anything other than paper airplanes?

Well, according to Edward G. Sakalosky, Vice President and Community Marketing Manager for Dauphin Deposit Bank, they are. In his 26 years of managing people and with 24 current direct reports, Ed has developed a clear understanding of the role of performance evaluations and what they can offer a canny manager. He feels they are useful and valuable tools, if used wisely, to help you and your employees achieve a clearer understanding of how to get from Point A to Point B without deviating through Points C and beyond. A performance evaluation should be used as a milemarker, feels Ed, not as the final signpost along the road to efficient and happy employees. Ed states that most people truly want to do a good job and be well thought of and will make an effort to be good employees. But, for people to do a good job, they must first know what is expected of them.

That’s where a performance evaluation can be helpful for a new hire as well as those who have been with the business for some time. If, right from the start, the employee is involved with the setting of goals and has a clear understanding of what they are supposed to accomplish, there’s less chance of a difference between what the manager feels that person’s job is and what the employee thinks their job actually entails. It’s an all too often occurring scenario where, when asked what an employee’s job responsibilities are, a manager’s response to the question bears a resemblance to the employee’s only by coincidence and the phase of the moon. If you, as a manager sit down with the employee when they are first hired and clearly outline what is expected and what constitutes doing a good job; whether it’s meeting quotas, selling percentages or the number of jelly beans jelled, there’s far less confusion, inefficiency and misunderstandings that occur during the course of the business year.

But, what if you’re the owner of a small business where you only have a few employees, do you really need to do formal reviews? According to George J. Justus, retired, former owner of MAACO Auto Painting on Carlisle Pike, the answer is no. A much more informal review format can be used in a small business environment where there’s no Human Resources Department and no intricate or tiered employment system. When Mr. Justus ran his auto painting business he had up to a dozen employees at a time working for him. He found that an informal annual review was all that was needed to clear up any lingering confusion and to make sure everyone was on the same page. Mr. Justus felt he could use an informal review format since he was intimately involved in the day-to-day running of the business and was very familiar with his employees. Mr. Justus agrees that once you reach a certain size, however, more formal reviews would be needed to make sure that fairness and continuity is achieved with each employee. A manager of a larger business is not able to be as familiar with the individual employees as those of a smaller business. Reviews are important tools for the small business owner as well, they just don’t need to be as rigid since there isn’t as much chance of an employee not understanding where their responsibilities begin and end when there’s only 12 people to deal with instead of 12,000.

One thing Mr. Justus and Mr. Sakalosky both stressed, however, is the importance of addressing any and all problems as they occur. Addressing an employee’s performance only during a review is one of the worst things you can do. Feedback and guidance on an on-going basis is a necessity, not a luxury. Mr. Sakalosky feels that an employee should already know how a formal review is going to go before they ever step into your office because you should have been monitoring and reporting on their progress (or lack thereof) regularly. Mr. Justus states that the small business owner should constantly be in touch with what’s happening in their business and act accordingly when problems occur. The worst thing you can do is ignore a situation and wait to address it in the performance review. So, even if you are a large corporation that does extensive formal reviews, ongoing feedback and positive reinforcement in an informal format is a necessity.

There is one time when a small business owner may want to consider a formal review and that is when they have a problem employee. Unfortunately, problem employees are also a fact of business life and the smart manager or owner keeps written records. In the case where informal feedback and verbal reprimands are not enough, those who use a looser review style may want to start putting something down on paper. Mr. Sakalosky says, “Document, document, document.” Make doubly and triply sure that you document what you did every single step of the way when it comes to reprimanding and/or terminating trouble employees. Prove that you honestly tried to help the employee improve their performance. Prove that it isn’t a personal vendetta. Documenting any behavioral changes and events that occur becomes worth the extra effort. Unfortunately, in these litigious times, it’s not just a precaution, it’s a necessity.

So, whether you’re the manager of teams or the proud owner of a small business, performance evaluations are a valuable tool. Both the formal and informal review method have their place.