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The performance of your employees largely determines whether your business will either sink or swim.

At least 50 percent of your business success depends on the performance of your employees.

To avoid trouble and to reach your ultimate goal of attaining maximum profits, how should you properly evaluate employees?

Naturally, you want to praise good performance and discourage bad. So make sure you are careful in performance appraisals.

Avoid 12 salient errors:

1. Insufficient information about employees and insufficient evaluation time

It is best to get to know employees well enough to accurately evaluate their strengths and weaknesses. Also, it is recommended that you to take the proper amount of time in the evaluation process for each employee.

2. Inconsistent standards of excellence

Ineffective managers permit personal feelings to bias the evaluation process.

Lack of uniform criteria from manager to manager can be detrimental to the organization and is why some employees are promoted when they should not – that is an indicator of The Peter Principle.

Additionally, without safeguards, it is possible to become too friendly with some employees in making evaluations while being too critical with others.

3. Failure to evaluate the entire performance period

Some employees, who are aware that a performance evaluation is due, will suddenly improve their work.

In such annual reviews, many managers unfortunately look at the most recent behavior instead of the entire performance period.

Throughout the year, when an employee does something noteworthy, immediately write it down; when the employee fails in a responsibility make note of it, too.

Use good discretion in deciding whether to enter the information in the employee’s personnel file.

4. Fear of bosses’ disapproval

Some managers are afraid to reveal derogatory information about employees to their bosses. They don’t want to admit that subordinates are ineffective.

They often write or say what they think bosses want to hear about staff members, not what is accurate.

5. The rainbow effect

When employees are popular, they are viewed as competent in their work. On the other hand, when employees are unpopular, they’re evaluated as inadequate.

6. People-pleasing of employees

Apprehensive about possible confrontations, managers are often afraid to include unfavorable comments about employees – even when justified.

… remember that every employee is entitled to hear the answers to three questions …

7. Empire-building/maintaining job security

Such managers overlook employees’ weaknesses to gain favor with inefficient employees in order to develop allies among department staffers.

To save their jobs, other managers will unfairly criticize workers as scapegoats and sacrificial lambs.

8. Justification for employee wages

This is the practice of using unwarranted evaluations to justify decisions about employee salaries, such as giving complimentary reviews in advance of promotions and pay increases.

9. Weak analytical ability/indecision

Some raters lack analytical ability. Others, because of favoritism, simply are unable to make objective judgments about some employees.

10. Middle-curve analysis

There is a tendency by some managers to stick to the middle or average and they do not accurately evaluate employees – they erroneously stick to the middle – average performance grades in every category.

11. Denial syndrome

Some managers make excuses and remain in denial about worker performance.

12. Irrelevant factors

Bias of non job-related factors, such as physical appearance or social standing, sometimes erroneously influences evaluations of employees.

Beware that some employees are good at selling themselves. Well-intentioned bosses also often give shy people too much benefit of doubt for fear of hurting their feelings.

From the Coach’s Corner, finally, remember that every employee is entitled to hear the answers to three questions:

1. What’s expected of me?

2. How am I doing?

3. What’s in it for me?

More HR resource articles:

HR: Is it Time to Rethink Your Marijuana-Testing Policy? — For HR departments, it was once-unthinkable: Deleting Marijuana from the list of drugs in workplace drug-testing programs. But should you? And what should you do about your handbook policies?

Human Resources: The Future of Performance Reviews — Here’s an interesting dilemma: Should performance reviews be fired? That’s the title of an article published by the University of Pennsylvania Wharton School in April, 2011. It’s an informative article and its premise continues to be thought-provoking.

HR Management – 8 Best Practices in Employee Delegation — Avoid frustration in delegation. Save yourself time and develop your staff for the welfare of your organization. Delegation is a fundamental driver of organizational growth. Managers who are effective in delegation show leadership. They know they’ll be more effective in management and that they’ll develop their employees.

13 Management Tips to Solve Employee Absenteeism — Absenteeism causes migraines for a lot of bosses. Obviously, your company will make healthier profits, if you don’t have an absenteeism problem. Check your attendance records. You’ll see Monday is the most-abused day of the week and January is the worst month for absenteeism.

Strategies: If a Valued Employee Wants a Raise, and Money’s Tight — In this economy, whether you operate a large or small company, trepidation of higher payroll expenses can turn your hands cold with perspiration. That’s especially true when talented employees suddenly ask for a raise. Talented workers are an asset – your human capital. Many companies don’t have a compensation policy.

“Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations.”

-Ralph Marston


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.