Your Performance Review: Make It Perform

A good evaluation is more important than ever in a downturn

Like most employees, you're probably used to the boss giving you a perfunctory yearend performance review. But don't count on a routine checkup this year. "Companies that were giving everyone an easy pass a year ago are now subjecting employees to more stringent reviews and marking the poorest performers for dismissal," says Kathy Gagné, a principal at Cambria Consulting, a human resources firm in Boston.

In flush economic times, many companies treat performance reviews as little more than the paperwork required before granting annual raises. When the economy turns down, however, companies use these evaluations to weed out their weakest staff. At performance reviews, bosses usually rank subordinates by how well they've met a handful of goals set the year before. What makes the process especially dicey this year is that many employees have fallen short of sales targets and other objectives in a tough business environment.

If you fall into this category, don't panic. The key to a positive review is to demonstrate how you've adapted to changed business circumstances. "Prepare a list of creative ways you're solving problems with limited resources," advises Madeleine Swain, a management consultant in New York. Say your company curtailed business travel after September 11, which interfered with your original goal of bringing far-flung staff together more frequently. In this case, inform your boss you're holding fewer but more comprehensive meetings or that you're conducting more teleconferences.

You'll look especially strong if you can show how your work bolsters the bottom line. For example, during a recent performance review Bob Nelson asked the comptroller at his 10-employee management-training company in San Diego to find ways to get clients to pay sooner. One of the comptroller's solutions was to have Nelson call clients and ask a favor: that they check with their accounts-payable department about the status of his company's account. "In this environment, I need my finance person to help drive the numbers, not just report them," says Nelson, who is the author of 1001 Ways to Reward Employees and other management books.

FINANCIAL FOCUS. Similarly, Angela Kozlakowski says that two years ago, when she was a creative services director at a photography-licensing agency in New York, her boss criticized her during a performance review for not framing requests in dollar terms. "I would say, `We need new Macintosh computers for our designers because they're state of the art,' rather than say that if the designers had Macs, they would spend 25% less time on a project," Kozlakowski says. The company hired Swain, the management consultant, to help Kozlakowski focus on the financial aspects of her job, which led to a promotion.

Rather than dwell on what you didn't do during the past year, focus on mapping out your future plans. At most companies, employees and supervisors work together to set the employee's goals. The key is to be as specific as possible and to ask for any help or training you need.

At PPG Industries, a Pittsburgh-based paint and glass manufacturer that employs 36,000 worldwide, employee objectives are dubbed "SMART goals," an acronym for "Specific, Measurable, Agreed-upon by employee and manager, Realistic, and Timebound," says George Krock, director of human resources planning and development. Before the SMART goals system was implemented three years ago, a sales manager would simply be directed to boost production over the next year, Krock says. Now, she might be asked to develop, by Sept. 30, three new customers in the Southeast region with annual sales volume of $100,000.

Performance evaluations are more challenging for employees who don't work in the same place as the boss. But the situation may be tougher this year because of business travel cutbacks. If you find yourself increasingly a "virtual" employee, ask your supervisor if you can set up an evaluation document that both of you can gain access to by computer, suggests Gagné, the Boston consultant. By doing monthly or quarterly updates, you can keep your boss informed.

Even the best workers should prepare to hear some criticism. Don't act defensively. Instead, discuss what you learned from a failure and how you'll do things differently, says Robert Gorden, co-author of The Complete Idiot's Guide to Performance Appraisals.

Typically, companies rank employees on a scale of 1 to 5 or give them an A, B, or C. When supervisors have sole discretion over the evaluation, they tend to give above-average marks, human resources experts say. That's why a growing number of companies have switched to "forced ranking" systems, which require supervisors to put a certain percentage of their staff into each rating category.

Forced ranking or not, you needn't accept a poor evaluation. Immediately contact your human resources department to see if your company has a formal objection process, suggests Tom Coens, a Lansing (Mich.) labor lawyer and co-author of Abolishing Performance Appraisals. Sometimes companies will only let you file complaints within a few days of the review. The best way to overturn a poor review is with proof that your supervisor is mistaken.

VOICING YOUR OBJECTIONS. If your company doesn't have a formal complaint process, meet with your boss to voice your objections. Also ask that your written response be put in your file. If you are denied a bonus or raise or fired as a result of your review and believe you and other employees were unfairly singled out because of race, sex, or age, you can file a complaint with your state's civil rights agency or the federal Equal Employment Opportunity Commission. You can also sue your former employer for discrimination and other unfair practices that violate company policy. Employees at Ford recently sued the auto maker for alleged discriminatory practices tied to a forced ranking system for managers. Ford is settling its lawsuits, and in July dropped the forced ranking aspect of its appraisals.

Done right, however, performance reviews motivate employees and keep everyone focused on key goals. So do your part to make sure the session goes smoothly. In today's chilly business climate, your job could depend upon it.

By Susan Scherreik

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