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The Importance of Employee Evaluations

For many managers, the (dreaded) annual review of employees is simply a formality and one of the negatives of being higher on the corporate ladder than someone. The standard procedure is straightforward: welcome them, serve them a warm compliment sandwich (with just a little spice to keep motivation high), and send them off with a perfunctory raise, or a set or arbitrary goals that may help them earn their raise the next time around. Problem solved, that 15 minutes of awkwardly having to point out performance issues; or stumbling over yourself to ensure they know you like them personally, it’s their work ethic you detest, is done and you don’t have to do it again for 12 entire months. Sweet relief.

Why is it that the HR department seems to put so much emphasis on annual reviews? What are the secondary uses of employee evaluations, and what information do they possess that causes the HR people to hold them in personnel files forever? Why is complete honesty the only way complete an evaluation, even if the resulting meeting is uncomfortable, unpleasant or heated?

Firstly (and I say that because to us in HR, this is probably the most important reason), documentation is EVERYTHING. I cannot accurately count the number of times a lack of proper documentation has come back to bite an employer that has called me for a consultation or for guidance. The conversation inevitably comes to this point in almost every case:

“We fired so-and-so because they weren’t doing the job well, and now they’re appealing our decision to decline unemployment.” – Manager

“Did you document the performance issues, including goals to meet that would help resolve the problem, and have the employee sign off that it was discussed with them?” – Me

“No.” – Manager

Game over. You are probably going to lose that unemployment contestation. If you didn’t keep accurate track of performance issues, you have a very small chance keeping that employee off of your unemployment.
Human Resources will ask you to document pretty much every interaction you have with employees. Actually, we would prefer to have a stenographer follow every manager around, but our budgets typically don’t allow for that. The reason documentation is so important is very simple: if you didn’t write it down it, date it, and file it; it didn’t happen. If it isn’t documented it is hearsay, and it has an evidential value equivalent to your dog testifying to your character in a federal trial.
Employee evaluations are done to give the employer and employee a chance to candidly discuss performance, good and bad. If you are marking them ‘above average’ or ‘excellent’ just to be done with the meeting; then the evaluation has no value to either party, or the company.

Secondly, the decision making aide evaluations can provide is invaluable to everyone in the organization. Raises, bonuses, promotions, terminations, layoff selections, and benefit eligibility can all be decisions made easier with properly completed evaluations. Some of the hardest decisions managers have to make are centered on an employee asking for a raise. Examining a history of evaluations can show you how employees have met/missed goals, grown as a team member or employee, or consistency as a top employee. A repeat excellent employee looking for a raise is easier to say yes to than an average employee asking for the same. Giving raises may raise some costs (or as I like to refer to them: investments) in employees and have some more outgoing cash, but for a perennial top tier employee, wouldn’t it cost more to have them go somewhere else?

Third on our list: Employee evaluations help us identify trends. Does 60% of the sales team have an issue entering their touches into the client management system? Then we have a training issue on our hands, and HR needs to develop a plan to make sure we’re doing everything possible to streamline their jobs. Efficiency can make or break a business, and training and education are two major areas that impact it.

This is going to sound like a huge jump, but employee evaluations help the company achieve its goals. Redirecting employees to personal goals seems like small potatoes in the aggregate view, but if you suddenly have 50 more people reaching goal, those company goals start to look like they are accomplishing themselves. Seeing trends or fixing deficiencies in training and education help us create efficient, goal-reaching business machines (or at least that is how we see it). Once we fix them, goals get accomplished, money gets made, and life suddenly makes sense. And then the HR department is going to claim all the glory, or at least pat ourselves on the back slightly more frequently than before.

Lastly, (and this is a doozy…) employees secretly love evaluations. I just lost you, didn’t I? Yes, they are sometimes uncomfortable, but for an employee who works hard and smart, evaluation time is a moment of pride for them. Many managers don’t get to put in the face time with their employees like they’d like to. The result of which is uncertainty and a sense of job insecurity at times. The 15 minutes or so when the two of you sit down face to face and discuss the good and the bad, set goals, maybe discuss a raise or promotion; is in many cases one of the only times throughout the year that an employee feels any sort of connection to their manager. You suddenly became human and not just the evil beast in the corner office that made them work on a Saturday, or piled on so much work they eat lunch at their desk every day. An employee who gets a quality, candid review will, in many cases, attack work with a renewed sense of pride in their company, their job, and their manager. An evaluation can show them that, hey, you did notice when they landed that big account, or updated all those programs without causing any time loss, and you thought it was great. Nothing motivates an employee more than pride in their work; and that pride comes from a combination of accomplishment and recognition.

Evaluations can be daunting, and sometimes even difficult, but they are among the most important tasks a manager is given. Your department reflects you, and if you avoid the tough talks, nothing will ever improve. A department that doesn’t strive to better every member of their staff will never help their company reach their goals. That is either the top of the ladder for the manager; or they’ll find someone else who will get it done.

Aaron Miller is the Human Resource Manager for Great Plains Health Alliance. You can contact Aaron with any questions, comments or concerns at

Posted by admin on June 5, 2014 in GPHA Hospitals, Healthcare Improvement, Our People, Reports.


2 thoughts on “The Importance of Employee Evaluations”

  1. Ron Kimball says:

    You seem to have forgotten to mention any real downside to evaluations. There are several but the one major issue is the disparity between evaluators and their methods of grading. For instance when you have 3 managers that always have employees with excellent or perfect marks year after year and another 3 that always have low marks on their employees then Houston, we have a problem. This creates a very bad morale problem internally, especially if these evaluations actually effect pay raises.

    1. Aaron Miller says:

      I completely agree with you, continuity of evaluations can be a big issue, especially if evaluations are used outside specific departments. An issue like that comes down to training. It is the job of several including HR, upper management, fellow managers, and previous managers to help hone the evaluation skills of those doing them now. Of course there will never be a system that can be 100% effective against human error, bias and/or perception; but a quality training program that teaches managers what and how to evaluate can be a great stepping stone to effective employee evaluations. In many departments it is hard to quantify performance, so you’ll never be able to have a perfectly transferable evaluation from one manager to another, but with the proper training program in place, similar evaluations within a standard deviation of some sort should be reasonable. Different managers value and emphasize different traits, skills and outcomes. If there is a drastic disparity between departments or managers of the same department, there is an issue at the managerial level that needs to be addressed.

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