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By Dave Wilmer, Robert Half Technology
Question: "It's nearly time to conduct annual performance reviews, and I am concerned. It's been a tough year for the company but my IT team never faltered. In fact, several staff members should be rewarded for their superior performance but I'm unable to offer raises or bonuses. Do you have any advice for making the review process positive for my employees, even though I can't provide the usual perks?"
You certainly are not alone in your predicament. Many IT managers are unable to increase financial compensation for deserving staff members because of the down economy. While there may be some signs of improvement, most companies remain cautious about finances. Your employees will likely understand why a raise or bonus won't be awarded this year, but it doesn't mean they won't feel disappointed.
You might address your IT department before starting the reviews to let them know about the compensation situation. Tell them that, while many employees are deserving of a raise or bonus this year, it's not possible to give pay increases at this time. However, stress the importance of the annual evaluation process and its key role in determining how you will compensate staff when times are better.
Also consider what rewards you can provide to deserving employees. For example, is there budget for training and education? Can you offer leadership opportunities, new projects or responsibilities? Perhaps you can be more flexible with work schedules or allow for time off. Think creatively, and you'll likely find that there are ways to bridge the compensation gap until conditions improve.
Separate the Financial Discussion
While it's quite common for companies to address pay raises during performance reviews, this isn't always the best strategy. When people know they are likely to receive an increase in compensation, they may be eager for the meeting to end and not listen closely to what is being said. At the same time, if they go into a review expecting to talk about money, and are told they can't or won't be rewarded, they may feel hurt or resentful. By keeping the financial discussion separate, you can focus solely on your employees' performance - what they are doing well and areas for improvement.
Regular communication to staff members about performance expectations also is a good best practice. By treating the review process as continuous, you can minimize potential surprises during the formal evaluation meeting. For instance, if you believe an employee needs to sharpen his communication skills, don't wait until the review to say so. Addressing the issue immediately will allow the person to begin the improvement process right away. Likewise, when team members excel, acknowledge them promptly so they know their contributions are noticed and valued.
Come Prepared
When it comes to the formal review, remember that a productive performance evaluation requires planning. Set a date for the meetings, giving each employee plenty of notice. You might even request that they complete a self-evaluation beforehand to help frame the discussion.
Also, treat the performance review as a two-way conversation. Try to keep the tone conversational, even when talking with an employee about a below-standard performance. In addition, be prepared to answer tough questions from your IT staff during these one-on-one meetings. Naturally, some may be concerned about the health of the company in the recession. Respond to their questions as honestly and thoroughly as possible. You may not be able to satisfy every employee with your answers, but you are more likely to earn your staff's respect and loyalty by being forthright.
Set Goals for the Coming Year
While you may not be able to reward your IT team financially, that doesn't mean they should leave their performance review empty-handed. Work with each staff member to set goals that fit your organization's initiatives and align with his or her desired career track. This "road map" for success, which should be written down, will provide employees with incentive to stay focused on the future and help them visualize their upward track in the organization.
Above all, never forget to provide well-deserved praise to team members who deliver outstanding performance. It's important, especially in a challenging economic environment, to ensure talented staff feeling valued. Finally, recognize that performance evaluations are essential to retention in any economy: Your employees can reflect on where they have been, where they are now and what their future may look like if they stay with your organization.
Dave Willmer is executive director of Robert Half Technology, a leading provider of IT professionals on a project and full-time basis. Robert Half Technology has more than 100 locations worldwide and offers online job search services at www.rht.com.
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