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Human Resources: Sizing ’Em Up


Conducting staff performance reviews is one of every manager’s least favorite tasks. Here’s how to do them right - and with less pain.

When Valerie Gilani recently conducted a performance evaluation of a staff member, she found the employee’s self-evaluation disappointing. But not surprising.

The staffer had been doing a reasonably good job, but she had given herself excellent marks on virtually all aspects of her performance. That happens a lot, Gilani says, and it’s one reason performance evaluations can be tense, confrontational experiences.

“People tend to have a glorified opinion of themselves,” explains Gilani, the billing manager for New York University Medical Center’s orthopedic surgery group. “They typically rate themselves higher than I rate them, and then I have to bring them down to earth. People can become very defensive.”

The annual performance review process is an indispensable tool for managing any business, including medical practices. But it can also be the most dreaded aspect of a manager’s job - especially when the performance of the employee under review is not as good as it could or should be.

“It certainly is a chore that people find unpleasant to do,” says Kenneth Hertz, a senior consultant with the Medical Group Management Association and the former manager of a medical practice in Alexandria, La. “It’s a very unpleasant, unsavory sort of task - probably second only to terminating people.”

Jim Needham, CEO of Coastal Orthopedics & Sports Medicine of Southwest Florida, a Bradenton practice with 110 employees, says many medical practice managers are ill-equipped to conduct effective performance reviews due to their lack of managerial training. “It’s because so many managers in practices are individuals who have worked their way up the ladder. They’re untrained in this,” he says.

Needham says he too often sees employees overrating their performances. “I find the underachievers tend to overrate themselves, and the best employees underrate themselves,” he observes.

But while evaluations are rarely fun, they need not be torture. When you do them right, the process can actually be rewarding - for you and your staff. Here’s how to avoid some of the most common errors managers make when reviewing employees, along with some tips for making the process fair and valuable.

The big mistakes

Experts say employers often compound the unpleasantness of a performance review by being too vague, straying too far from the staffer’s job description, or evaluating one aspect of an employee’s performance to the exclusion of others.

Procrastination is another common mistake. “If the employee has to come to you and say, ‘Umm, weren’t you supposed to evaluate me?’ that’s wrong,” says Hertz.

James Neal Jr., an author and expert on performance appraisals who consults with large companies on developing effective employee-review programs, says he sees many managers who inflate employee ratings or pull their punches during reviews in an effort to avoid confrontation. Others make a general rule of giving everyone middle-of-the-road reviews. Still others, Neal says, are unfairly negative. All are methods managers use to make their own lives easier. In the long run, these approaches backfire, driving away their better employees and turning their offices into havens for underachievers.

To avoid these mistakes, Neal advises guarding against the common trap of allowing an employee’s personality to cloud your judgment of him. Managers can be overly negative about an employee who, for one reason or another, just rubs them the wrong way. Or, if they personally like an employee, they may inflate her evaluation. The latter is a common phenomenon in medical practices, and one that physicians in particular seem prone to.

That’s why practice management consultant Judy Capko advises physicians not to conduct the reviews of any nonclinical employee who doesn’t report directly to them. “Physicians tend to have their favorites,” says Capko, president of Capko & Co. in Thousand Oaks, Calif.

But the biggest mistake you can make with performance reviews is skipping them altogether.

“There are certainly a lot of practices that don’t do them, but that tends to have a negative impact on the practice,” says Hertz. To achieve their goals, practices need to set clear expectations for employee performance and hold staff accountable to those standards.

And employees (the ones worth keeping, anyway) want direction and feedback.

“As an employee, I want clear direction of what’s expected of me, I want to know how I’m doing, and if I need improvement, I want someone to tell me and help me through that process,” says Hertz. “And finally, if I’m doing a good job and making a contribution to the practice, I want to know that, too. That’s very important to my level of job satisfaction.” And happy employees perform better.

Several department managers report to Needham, and he says he’s amazed at how often those managers fail to confront employees who do something wrong, even when they do it repeatedly.

“People just don’t like conflict,” Needham says. “I’ll have a manager in my office yelling about this employee or that one, ‘I can’t believe they did that! I want to kill them!’ And then I’ll talk to the employee about it - I’ll say, ‘So, did you talk to so-and-so?’ And they’ll say, ‘Oh yeah, we talked. It went fine.’ They have no idea.”

That may be one reason employees are prone to overrate themselves; they figure no news is good news, so when nobody corrects them, they assume they’re doing a great job. That, in turn, makes the annual review process for average and below-average employees that much more unpleasant.

And annual reviews should be only one occasion of many during the year in which employees receive feedback about their performance. “That feedback loop is so important,” says Capko. Adds Hertz, “We’ve done a very bad job with an employee if it comes time to terminate them, and they’re surprised. … And really, the whole evaluation process begins when I hire someone.”

Document, document, document

Evaluations are also extremely useful should you decide to terminate an employee. For one thing, it’s only fair that subpar staff members be made aware that you’re unhappy with them and be given an opportunity to improve. And you’ll want documentation should there be legal action.

In most states, employees who are not in unions or operating under an employment contract are considered “at will,” meaning the employer may fire workers for almost any reason or none at all. The exception is discrimination. If an employee can demonstrate that she was fired for some discriminatory reason, you can be in legal trouble.

Documenting her performance - and that of others - is vital in any case in which an employee claims wrongful dismissal. The employee’s attorney will likely subpoena such records to search for evidence of discriminatory patterns or something aberrant concerning only the fired employee. For example, an employee who claims she was fired after her boss made an unwelcome sexual advance might bolster her case by producing glowing evaluations written shortly before her dismissal. In the case of an employee who claims age discrimination by saying that employees over 50 are never promoted, his attorney would want to compare the reviews of older employees with those of younger ones and then determine which ones were promoted.

“The first thing plaintiffs do is subpoena the performance appraisals,” says Neal. “They go right in with a court order and say, ‘OK, we want every performance appraisal in your entire file.’ That’s the first thing they go after.”

Do’s and Don’ts

Neal, author of “The #1 Guide to Performance Appraisals,” has developed a set of guidelines for managers to follow when conducting performance appraisals. He says that employee evaluations should:

  • Be honest and accurate. This might seem like a no-brainer, but Neal says there are times when an individual manager may not be dealing in good faith. “You can’t be playing games with that stuff,” he says, or you run the risk of a lawsuit.

  • Include factual examples. The more specific you can be, the better. This is true whether you are giving an employee a good review or a bad one.

  • Make use of employees’ written job descriptions. Neal and others strongly recommend using job descriptions as a basis for evaluations, and they suggest bringing the description with you to your meeting with the employee under review. Of course, this requires you to actually write job descriptions for all your staff members. Hertz says practices that don’t have clear job descriptions are more likely to struggle come review time. “If I don’t have a good job description, what am I evaluating you on?” he asks. Still, some practices find this suggestion difficult to follow, even if they agree with it in principle. “I think it’s a good idea, but I don’t think I’ve ever seen it done,” says Needham.

  • Be based on performance, not personality. An employee’s attitude can be considered part of his performance, especially if his job involves dealing with the public. For the most part, however, evaluation standards should be as objectively measurable as possible.

  • Be positive and focused on improvement. That doesn’t mean that bad employees should be given glowing reviews, Neal stresses. Quite the opposite. “Even if someone isn’t performing up to standard, you should say, ‘We think you can do better; we’re going to help you.’”

  • Be a forum for discussing performance, not salary. Neal acknowledges that this suggestion is somewhat controversial, and he says businesses can and should base salary increases on performance. But they “shouldn’t commit to a particular salary level” during a performance review unless they’re certain they can make good on their promise.

  • Be conducted in as comfortable an environment as possible. It’s better not to meet an employee in your office unless you have space to get out from behind your desk and sit next to him. Reviews are already fraught with emotion and the possibility for conflict. There’s no need to have a desk between you.

  • Include target dates for improvement for problem employees. “You should really pin it down,” says Neal. Give the employee a month or six weeks to show improvement in the specific areas you identify, and schedule a follow-up meeting to discuss progress.

  • Be secure from snoops. Written evaluations should be kept under lock and key.

Experts also advise having your employees write self-evaluations as part of the process, as Gilani’s practice does. The purpose is to compare your view of the employee with his view of himself. It can be very enlightening.

Should evaluations be conducted during each employee’s anniversary-of-hire date, or is it better to conduct all of them at them same time of year? Experts are divided on this question. Neal is convinced that conducting reviews at different times during the year can invite trouble.

“People who do the evaluating can be in different psychological moods, and you sure wouldn’t want to be evaluated by someone who’s got a root canal tomorrow or just came back from an IRS audit,” he says. “People get real funny. You know, the holidays come around, and people can be in a great mood or a bad mood. Personal factors can come into play with the reviewer … and it’s only fair that you evaluate people when your [mood] is the same for each employee.”

But as a practical matter, this can be very challenging.

“It’s a burden for managers to do employee reviews; it really is,” says Gilani. “And to have to do them all at once would really be a problem. I have 23 direct reports. If I had to do 23 evaluations all at once, that’s all I’d be doing for three weeks.”

Bob Keaveney is the executive editor of Physicians Practice. A graduate of Towson University in Maryland, he has been writing about business and healthcare since 1995. Prior to joining Physicians Practice, he covered healthcare for The Daily Record, a newspaper focusing on business and legal issues. He can be reached at bkeaveney@physicianspractice.com.

This article originally appeared in the July/August 2006 issue of Physicians Practice.

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