Many employees look forward to their annual review for one simple reason: it is a natural vehicle for them to get a raise.
Since the economy has been in a downturn, many employers have actually cancelled annual reviews so they don’t have to pay their employees more and also to avoid any natural discussion of pay increases.
This is not a good practice for many reasons.
First, besides the money issues, the annual review is a key time to give much needed feedback to employees.
If there are problems to be addressed or constructive criticism to be given, the year-end review is a good time to discuss these awkward subjects.
Employees thrive on positive feedback as well and if it’s not given, they are left wondering if their performance is measuring up. The old adage by Mark Twain that reads, “I could live two months on a good compliment,” is true, especially for employees.
Second, if there is no review, you are opening up the door to feelings of resentment from employees, especially if reviews have been a part of business in the past.
If you don’t have the money to give raises, then just explain that to the employee and let them decide what they should do or if they need to find another job.
Having an honest, frank discussion about the state of your business will be appreciated much more than beating around the bush and not opening up.
Finally, reviews are a crucial time to review goals and what has or has not been accomplished in the past year. It’s a great measuring tool to see if you and your employees are on the same page, accomplishing what needs to be done and on track for the coming year.
Don’t miss out on these crucial reviews – they are beneficial for everyone and will overall improve morale and employee performance.