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Evaluating Employees

There are as many variations to employee evaluations as there are compensation programs. However, we have found some common ingredients to the most effective evaluation devices that can be easily duplicated and used by agencies throughout the U.S. and Canada.

Basis of Evaluation

We need to begin evaluations at the level of Job Descriptions, making sure that the descriptions list the functions of the job in priority order with “success measurements” in each function that meet the ROAM test (Realistic, Objective, Achievable and Measurable). Doesn’t it make sense that in order to achieve high levels of performance in a job that we tell each employee what the roles are that he or she is expected to achieve and the quantitative or qualitative measurements of high performance in each category of function?

Job Descriptions

Job Descriptions should include some standardized sections and some sections that are particular to the position in question.

1. Description of the job – This is a paragraph that describes the job as if advertising for the position. It should be fully descriptive of the role and responsibilities and of the personality, experience and background needed to successfully achieve the job.

2. Reports To and Compensation – Defines the reporting relationship. No position should report to more than one person or manager. Compensation should be stated as a range from the minimum for someone with no experience in that job to maximum indicating the highest pay justified in this agency for the position at the time. Maximums will increase as competitive pressures and market conditions require.

3. Functions and Measurements – Defines what specific functions are expected and the measurement of success of each function in order of functional priority.

Example: Accepts client communications (phone, mail, e-mail, fax) and implements client requests within 24 hours of client request
This is a good example of a function of a CSR (Account Exec, Account Manager) that illustrates the primary responsibility and the timeline expectation of the agency.

4. Acceptance of the Job Description – acknowledges that the employee has read and accepted the Job Description with a signed and dated copy for the employee and another to the employee’s file.

Job Enhancement and Development

A second level of performance evaluation involves Continuous Improvement. We do not hire people to do a task-oriented job repetitively for as many years as they work for us. In order to warrant increased responsibility and increased compensation, we should expect enhanced value of every employee, both in the performance of the job in which they are placed and in the growth of the person as an employee.

In order to evaluate job enhancement and development, each employee must have a Development Plan initiated at the beginning of the evaluation period by the employee and the manager. That Plan defines what the employee desires and is expected to do to improve the role in the job, the employee’s development in the job, or the evolution of the employee to a higher level position. These developments can be strengthening weaknesses (i.e. lowering error rates, handling more work, touching more clients) or enhancing skills toward more responsibility in the current role, or advancement to other roles in the agency (i.e. professional designations, seminars, work sharing to learn new skills, etc).

The second part of the Evaluation is the measurement of the achievement to goal of the prior Development Plan

The final part of the Evaluation is the creation of the new Development Plan for the next evaluation period. This is done jointly between the employee and the manager to strengthen the employee’s skills in the current position, to enhance skills in the current position or to gain new knowledge to qualify the employee in a growth position in the future.

Performance Evaluation should not be done at the same time as the compensation review. If you are evaluating an employee at the same time that he or she is expecting a salary review, the employee’s attention span can be measured by the period of time up to the point at which they learn what their raise will be. Whether they are happy or unhappy with the result, they likely hear little else before or after that figure is disclosed within the evaluation.

However, if you evaluate the employee three months before the compensation review, the level of performance can be indicative of the raise for which they qualify at present. If it is a strong percentage raise, they know that they must continue that performance level if they expect to achieve that raise in three months. If the potential raise is lower than they expected due to performance issues, they can be told what they must do to correct the problems and achieve a higher raise and they still have three months to accomplish the improvements.

It makes sense to have performance reviews three months prior to salary reviews whether you do so on an annual basis or on a semi-annual basis. Many firms review salaries annually and performance semi-annually to keep the employees’ performance to goals that are reasonably close and achievable.

Performance Evaluation Forms

Over the last 30 years we have evolved several dozen “forms” to be completed based on the information reflected above. The BEST forms we have seen happen to have been free-form evaluations that laid out the Job Description functions and measurements and the Development Plan first, evaluated the employee on each Job Description function and on the existing Development Plan next, and then transitioned to a discussion of the employee’s goals and desires for career-pathing and the appropriate Development Plan to either strengthen weaknesses or to enhance skills toward the desired career path over the next evaluation period. In some cases the agency has specified that the evaluation would have generated an X% raise if it were granted simultaneous, but that the employee needed to maintain or enhance that level of performance to achieve the desired raise level when the compensation review was generated three months hence.

Interim Evaluations

In some cases performance problems require interim evaluations to solve specific performance problems. When that occurs, it does not affect the Development Plan and a standard evaluation is conducted when originally scheduled. The Interim Evaluation is generated for a specific issue with a 30 day, 60 day or 90 day timetable to solution for the specific problem in question.

Too many agencies are haphazard regarding their evaluation process. This is unfair to the employee and does not give the managers sufficient communications with the employees on a global basis to properly judge employee performance and conduct. Whether the employee is doing well or poorly, it is the responsibility of management to keep the employee informed of the manager’s view of the employee’s performance. We have seen far too many employees utterly surprised when they are evaluated after one year (or longer) to find that their own opinion of their performance and that of their managers diverge radically. This is always a management problem and is caused by infrequent and insufficient performance-based evaluations.

Reprinted from the PIPELINE, the national newsletter for agency principals, by permission of Agency Consulting Group, Inc., a leading consulting firm for independent agents in the U.S. for more than 20 years. Call 800-779-2430 for information or subscription; e-mail info@agencyconsulting.com; website, www.agencyconsulting.com.