{"id":6219,"date":"2013-11-08T08:29:36","date_gmt":"2013-11-08T13:29:36","guid":{"rendered":"http:\/\/www.theweekinimaging.com\/?p=6219"},"modified":"2013-11-08T08:29:36","modified_gmt":"2013-11-08T13:29:36","slug":"annual-review-vs-annual-raise","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2013\/11\/annual-review-vs-annual-raise\/","title":{"rendered":"Annual Review vs. Annual Raise"},"content":{"rendered":"

\"performance<\/a>It\u2019s that time again; Time for the dreaded annual review with one of your key staff members.\u00a0 For some companies, this is such an arduous process that they simply stop doing it. I\u2019ve had many a dealer tell me that they believe it\u2019s a waste of time.\u00a0 \u201cAll the employee wants to know is how much of a raise they are going to get. They aren\u2019t interested in having their performance reviewed.\u201d<\/p>\n

So, how do you turn the review process into the productive management tool that it should be?\u00a0 I\u2019ll outline a process that has proven to be very successful.<\/p>\n

The Basics of Annual Reviews<\/strong><\/p>\n

The first thing to cover is the overall purpose and the elements of the annual performance review.\u00a0The first purpose is to review the employee\u2019s performance over the last year.\u00a0 In order to do this properly it is important that you keep a file for each staff member who reports to you.\u00a0 The folder should include the good and bad things that have happened during the year.\u00a0 Start with a sheet of notes.\u00a0 When you notice something or have a situation to handle make notes on the sheet.\u00a0For example, let\u2019s say you had to talk to the employee about being consistently late.\u00a0Write the date and details of the discussion on your note sheet.\u00a0 Be sure to add good things as well.\u00a0You should also keep copies of important memos, etc. in the folder.\u00a0 This folder will be helpful when you sit down to write up the employee\u2019s review.<\/p>\n

The second and most important part of the annual review is future planning.\u00a0 As you go through the employee\u2019s strengths and weaknesses you want to outline what they should focus on for the coming year.\u00a0These get turned into a game plan with specific goals.\u00a0Of course these goals need to be written up and put into the folder from the previous step.<\/p>\n

The last part of the review process is to address the employee\u2019s compensation for the coming year.\u00a0 For many employees this is the part of the review they are most interested in.\u00a0It is critical that you handle this properly.\u00a0 Too often employees are given an annual raise even if they haven\u2019t earned one.\u00a0This is addressed in the Hubbard Management System in a policy letter dealing with penalties and rewards.\u00a0 In the policy letter Mr. Hubbard states, \u201cWhen you reward down statistics and penalize up statistics you get down statistics.\u201d \u00a0The statistics Mr. Hubbard is speaking of are the production measurements of the employee.\u00a0 When you give a raise to someone who hasn\u2019t earned it through increased production you are in actuality rewarding down statistics and will get future down statistics and continued low production.\u00a0 All increases to compensation must be tied to increased production.<\/p>\n

A Successful Plan for Annual Reviews<\/strong><\/p>\n

I have helped quite a few dealers implement the plan that is outlined here.\u00a0 It has proven to be a successful method for handling the annual review process and compensation plans for their employees.<\/p>\n

Step 1: Create a Review Calendar<\/strong><\/p>\n

One of the cardinal rules of annual reviews is that they should be done on time.\u00a0 When you forget about the review or miss the employee\u2019s anniversary date you send a message that they aren\u2019t important to you.\u00a0 Of course your employees are your most valuable and important resource.\u00a0 Create a calendar for annual reviews. The calendar should list all employees and their anniversary dates.\u00a0 Use a program like Outlook to create a simple reminder system that will alert you when an anniversary is coming up.<\/p>\n

Step 2: Distribute Review Materials<\/strong><\/p>\n

You need to have a formal document to use for the review.\u00a0 Annual review documents are available from a number of sources.\u00a0 A good document allows you to rate the employee on a graduated scale in all areas of their job.<\/p>\n

The scale should have ratings like outstanding, very good, good, needs improvement, unacceptable, etc. and should rate areas like knowledge of work, quantity of work, quality of work, reliability, initiative, etc.\u00a0 Approximately one week before the employee\u2019s anniversary date the manager should be given two copies of the review form. The manager is to give one to the employee with a memo informing him or her of the review date and asking that they fill out the form as a self evaluation.<\/p>\n

Step 3: Manager Review Write Up<\/strong><\/p>\n

At this point the manager fills out the review form for the employee\u2019s performance.\u00a0 The employee\u2019s folder is referred to as a tool for remembering what happened during the year.\u00a0 Once the write up is complete the manager must go over it with his or her supervisor.\u00a0 The purpose here is to allow for help and direction and to provide a sounding board.\u00a0 The manager and supervisor can also discuss compensation strategies.<\/p>\n

Step 4:\u00a0 The Actual Review Meeting<\/strong><\/p>\n

When the review date arrives, the manager and employee should meet in a quiet area where they won\u2019t be disturbed.\u00a0 It\u2019s better to do the review in the office, but if you don\u2019t have a quiet spot you can have the meeting off site.\u00a0 As the manager, the first thing you should do is go through the employee\u2019s self evaluation.\u00a0 Have the employee take you through the entire document.\u00a0 It is important to listen to what they have to say without rebuttal.\u00a0 Right now you\u2019re getting their viewpoint.\u00a0 If you want to outline plans for improvement you need to understand the employee\u2019s viewpoint.<\/p>\n

Once they have taken you through their write up it\u2019s your turn.\u00a0 Go through each item and discuss why you rated them as you did.\u00a0 If there is a major discrepancy between your rating and the employee\u2019s you may want to spend a little time explaining why you see it differently.\u00a0 Be sure to outline areas that need improvement.\u00a0 The review should be a balance of past performance and future goals.<\/p>\n

Step 5:\u00a0 The Compensation Element<\/strong><\/p>\n

I strongly recommend that you do not discuss compensation during the initial review meeting.\u00a0 Make it clear to the employee up front that the purpose of this meeting is to go through the review and that a follow-up meeting will be scheduled to discuss compensation.\u00a0 The plan that works best for compensation allows for employees to receive an annual raise up to the Social Security Administration cost-of-living adjustment referred to as the COLA.\u00a0 Go to the following Web address to see annual COLA rates, www.ssa.gov\/cola\/index.htm<\/a>.<\/p>\n

If an employee\u2019s performance and production over the past year was excellent they could be given a raise based on the full amount of the annual COLA.\u00a0 If their performance and production was good but not great they might get a portion of the annual COLA.\u00a0 However, if their performance and production don\u2019t warrant it you should not give any raise.\u00a0Additional income potential beyond the COLA should be offered in the form of production incentives that are tied directly to the employee\u2019s post.<\/p>\n

Once you\u2019ve decided how you are going to adjust the compensation, schedule a follow-up meeting to go over this with the employee. Be prepared to handle any questions or objections they might have.<\/p>\n

The key to success is to formalize a plan and stick to it.\u00a0Once you do, the process of conducting annual reviews becomes much easier and fruitful.\u00a0 The entire staff knows what to expect and can now focus on the process.\u00a0 You no longer have the two opposite viewpoints mentioned at the opening of this article.\u00a0 If you need a review form or would like a copy of the policy we use with our clients just drop me an email.\u00a0 I\u2019d be glad to send along copies to help you get started on your way to making the review process the management tool it can be.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s that time again; Time for the dreaded annual review with one of your key staff members.\u00a0 For some companies, this is such an arduous process that they simply stop doing it. I\u2019ve had many a dealer tell me that they believe it\u2019s a waste of time.\u00a0 \u201cAll the employee wants to know is how much of a raise they are going to get. They aren\u2019t interested in having their performance reviewed.\u201d So, how do you turn the review process into the productive management tool that it should be?\u00a0 I\u2019ll outline a process that has proven to be very successful. The Basics of Annual Reviews The first thing to cover is the overall purpose and the elements of the annual performance review.\u00a0The first purpose is to review the employee\u2019s performance over the last year.\u00a0 In order to do this properly it is important that you keep a file for each staff member who reports to you.\u00a0 The folder should include the good and bad things that have happened during the year.\u00a0 Start with a sheet of notes.\u00a0 When you notice something or have a situation to handle make notes on the sheet.\u00a0For example, let\u2019s say you had to talk to the employee about being consistently late.\u00a0Write the date and details of the discussion on your note sheet.\u00a0 Be sure to add good things as well.\u00a0You should also keep copies of important memos, etc. in the folder.\u00a0 This folder will be helpful when you sit down to write up the employee\u2019s review. The second and most important part of the annual review is future planning.\u00a0 As you go through the employee\u2019s strengths and weaknesses you want to outline what they should focus on for the coming year.\u00a0These get turned into a game plan with specific goals.\u00a0Of course these goals need to be written up and put into the folder from the previous step. The last part of the review process is to address the employee\u2019s compensation for the coming year.\u00a0 For many employees this is the part of the review they are most interested in.\u00a0It is critical that you handle this properly.\u00a0 Too often employees are given an annual raise even if they haven\u2019t earned one.\u00a0This is addressed in the Hubbard Management System in a policy letter dealing with penalties and rewards.\u00a0 In the policy letter Mr. Hubbard states, \u201cWhen you reward down statistics and penalize up statistics you get down statistics.\u201d \u00a0The statistics Mr. Hubbard is speaking of are the production measurements of the employee.\u00a0 When you give a raise to someone who hasn\u2019t earned it through increased production you are in actuality rewarding down statistics and will get future down statistics and continued low production.\u00a0 All increases to compensation must be tied to increased production. A Successful Plan for Annual Reviews I have helped quite a few dealers implement the plan that is outlined here.\u00a0 It has proven to be a successful method for handling the annual review process and compensation plans for their employees. Step 1: Create a Review Calendar One of the cardinal rules of annual reviews is that they should be done on time.\u00a0 When you forget about the review or miss the employee\u2019s anniversary date you send a message that they aren\u2019t important to you.\u00a0 Of course your employees are your most valuable and important resource.\u00a0 Create a calendar for annual reviews. The calendar should list all employees and their anniversary dates.\u00a0 Use a program like Outlook to create a simple reminder system that will alert you when an anniversary is coming up. Step 2: Distribute Review Materials You need to have a formal document to use for the review.\u00a0 Annual review documents are available from a number of sources.\u00a0 A good document allows you to rate the employee on a graduated scale in all areas of their job. The scale should have ratings like outstanding, very good, good, needs improvement, unacceptable, etc. and should rate areas like knowledge of work, quantity of work, quality of work, reliability, initiative, etc.\u00a0 Approximately one week before the employee\u2019s anniversary date the manager should be given two copies of the review form. The manager is to give one to the employee with a memo informing him or her of the review date and asking that they fill out the form as a self evaluation. Step 3: Manager Review Write Up At this point the manager fills out the review form for the employee\u2019s performance.\u00a0 The employee\u2019s folder is referred to as a tool for remembering what happened during the year.\u00a0 Once the write up is complete the manager must go over it with his or her supervisor.\u00a0 The purpose here is to allow for help and direction and to provide a sounding board.\u00a0 The manager and supervisor can also discuss compensation strategies. Step 4:\u00a0 The Actual Review Meeting When the review date arrives, the manager and employee should meet in a quiet area where they won\u2019t be disturbed.\u00a0 It\u2019s better to do the review in the office, but if you don\u2019t have a quiet spot you can have the meeting off site.\u00a0 As the manager, the first thing you should do is go through the employee\u2019s self evaluation.\u00a0 Have the employee take you through the entire document.\u00a0 It is important to listen to what they have to say without rebuttal.\u00a0 Right now you\u2019re getting their viewpoint.\u00a0 If you want to outline plans for improvement you need to understand the employee\u2019s viewpoint. Once they have taken you through their write up it\u2019s your turn.\u00a0 Go through each item and discuss why you rated them as you did.\u00a0 If there is a major discrepancy between your rating and the employee\u2019s you may want to spend a little time explaining why you see it differently.\u00a0 Be sure to outline areas that need improvement.\u00a0 The review should be a balance of past performance and future goals. Step 5:\u00a0 The Compensation Element I strongly recommend that you do not discuss compensation during the initial review meeting.\u00a0 Make it clear to the employee up […]<\/p>\n","protected":false},"author":43,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[82],"tags":[981,982,724],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6219"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=6219"}],"version-history":[{"count":2,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6219\/revisions"}],"predecessor-version":[{"id":6223,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6219\/revisions\/6223"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=6219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=6219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=6219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}