Why are employee annual reviews a bad idea? It’s not the idea of having a meeting with employees that’s a bad idea, it’s the verbiage we use to describe what is happening. An “annual review” or “evaluation” has a top-down implication that puts the employee in a helpless and often defensive posture. They are going to be evaluated, rather than a much more positive approach that could enlist the employee in their own performance improvement. In this episode of Making Chips Jim and Jason speak again with Karla Dobbeck, a Human Resources specialist who is focused on the manufacturing industry. Karla shares her preferred approach to what she calls “Proactive Discussions” that actually get the employee involved in their own evaluation and improvement to create a winning team across the board.

Do you know what questions to ask during an employee review?

First, did you notice we said, “questions to ask” rather than “things to say?” A successful proactive employee discussion should be couched in terms that encourage employee interaction and show great interest in the employee’s well-being and future. You don’t want to grill your employees or make them leave the conversation feeling scolded or critiqued. You want them to leave feeling helped and motivated toward improvement. That means you’ve got to show interest in them and their approach to the work they are doing by asking questions. That approach has a greater chance of creating a win-win situation for everyone. Find out what kind of questions you need to ask in your annual reviews… oops, proactive discussion - on this episode of Making Chips.

There are two types of conversations employers need to have with employees - and they are not only done annually.

Do you know what they are? Do you know why you should shoot for having them more than annually, like a typical “annual review?” Here they are - performance conversations and behavioral conversations. What’s the difference? Let’s start with the behavioral conversations:

Behavioral - These are talks you have with employees about specific behaviors they are guilty of that need correction or modification. Examples could be use of phones on the shop floor when it’s prohibited, or an apparent refusal to comply with a certain usage technique on a new machine. With behavioral conversations you need to talk about the issue when it arises.

Performance - These conversations are planned conversations where you as the employer are being proactive to address the employee’s performance, positive as well as negative, for the sake of coaching them to greater levels of accomplishment and competence. Performance discussions should be introduced a few weeks ahead of time so the employee can come prepared for the talk, and should be done regularly - perhaps annually, but preferably more often.

Never center your proactive discussions with employees around money

The typical annual review contains a significant amount of discussion of salary, raises, etc. But when you’re making the move to these new style proactive discussions, you want to have conversations about money completely separate from the performance discussion. The point of the proactive discussion is to coach, consider options, and draw the employee into their own career advancement path in a deliberate way. You want them involved in thinking through the ways they can become an even greater asset to the company and how they can build their own skill set to put them in a place where other opportunities can open up to them. Find out why Karla Dobbeck, Human Resources Specialist, recommends you keep money-talk out of the annual review in this episode of Making Chips.

Be careful about giving “bonuses” to your employees

Karla Dobbeck recommends that you find other ways to reward employees besides the typical “bonuses” that are a part of the annual review conversation quite often. Why? Because there are negative legal and tax impli...