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Employee Performance Evaluations: Best Practices and Technologies


Peak performance is the goal of every business. It's important to find the right tools to define peak performance, measure your team's progress, and provide coaching for to help underperforming employees improve. Sixty-five percent of HR managers in a recent Society for Human Resource Management study indicated that performance evaluations were either a top priority or would be receiving strategic focus in the year ahead. Employee performance management is the key to increasing your firm's productivity and offering growth opportunities to your staff. Developing a comprehensive employee performance evaluation program includes training, communication, documentation, and technology. Here's a closer look at what business leaders need to know.

Leverage technology to support your process

Today's HR technologies can provide critical support to any process. Many systems offer review templates, as well as the capability to customize your own review forms and documentation. Scheduling applications allow managers and HR professionals to schedule specific events, from data gathering to employee conversations to compensation reviews. If you're using a 360 review style that solicits feedback from peers, managers, and others throughout the organization, many systems allow managers to email out requests for information and collect all the responses automatically. Taking this approach increases efficiency, improves confidentiality, and reduces administrative burdens throughout the review process.

Integrate payroll and performance information

When a company's HR system is fully integrated, it's possible for managers to access payroll, benefits, additional compensation, and time and attendance data through a single interface. What has a specific employee's attendance looked like during the review year? What is their current salary and total compensation, individually and compared with their peers? An important component of the review process is adjusting total compensation, employee raises, and bonuses. Giving managers easy access to this information through one interface is an important part of streamlining these financial discussions.

Develop a clear and comprehensive process

The employee performance evaluation process itself plays an important role in your employee management program. Having a clearly documented process helps ensure that every employee is receiving the benefit of the same kind of analysis, communication, and coaching. It also ensures that managers are conducting reviews in a way that's consistent with legal requirements and company policy. Consider developing a policy and then having it reviewed by an outside HR professional or lawyer to make sure that your planned program complies with necessary regulations and takes advantage of best practices. Provide training to your executive team, HR staff, and managers on how to correctly implement a review process, handle employee conversations, and discuss compensation.

Employ best practices to avoid problems

The leading HR organizations have identified a number of challenges that often emerge during the employee performance management process. One of the most important are biases. At the end of the year, when managers sit down to recall an employee's performance, it's hard to think of concrete examples of performance which can result in the "halo effect". As a result, many companies now encourage managers to make notes on a monthly basis on employees, their strengths, and areas for improvement. Provide specific examples from the preceding month. During reviews, this log provides a helpful reference point for managers and HR staff. Relying on external benchmarks is another way to get valuable feedback and output that helps keep your process focused and objective. Finally, consider implementing a 360 degree review approach that collects feedback from throughout the organization rather than simply relying on a manager's perspective.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.