What can you teach and learn in employee performance reviews?

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It’s safe to say that few people like employee performance reviews. Managers seldom like writing them up, and they can be extremely stressful for employees. Some companies have eliminated them, but that’s not necessarily a great idea. They can be helpful for your employees, and just as importantly, they can be a two-way street with the potential to help you improve your business.

If you’re not already doing these reviews, you should consider it. Everyone knows you’re already looking at their sales numbers, and how they shape up as employees overall. A performance review is up front about all that, and gives them a chance to present their side of the story on any negative points, and provide input on anything the store could improve. What should you know to make the most out of performance reviews?

They shouldn’t be a substitute for regular communication. You should always have an eye on the dealership’s “thermometer,” seeing what’s running hot or cold. Periodic one-on-one meetings, even just to have a conversation, can alert you to issues before they escalate. Employees should know that they can talk to you any time they need, without having to wait for their official reviews. The frequency of your performance reviews can vary, but twice-yearly or quarterly may provide better results than an annual review.

Numbers aren’t always everything. Someone who closes a lot of deals needs to be recognized for it – and along with the pay cheque and any bonuses, a “thank you” or “great job” goes a surprisingly long way.

Everyone wants a dealership full of top-grossing performers, but always look at the big picture. You may have salespeople whose numbers aren’t quite at the top, but they score high in customer satisfaction – taking their time with customers, following up with them, helping with their vehicle’s service, and so on. If they’re bringing up your CSI and getting new customers into your store, they’re very valuable as well.

Frame criticism properly. No one likes to be told they’re doing something wrong, but doing it properly can lead to a positive outcome.

  • Be specific with any complaints. Rather than, “Customers don’t like the way you talk to them,” cite examples, such as, “We noticed you were a little snarky over a customer’s trade-in.”
  • Don’t present hearsay about them. No one should be told, “I’ve heard that some people don’t like the way you do this.” If you are hearing gossip about someone, talk to those employees directly to get the full story.
  • Recognize where the problem initiated. Did you provide the right training from the start? Do all your employees know what’s expected of them? You may even have to go up the chain – are your managers properly trained in how to teach new employees the ropes?

Be prepared to accept criticism. A one-way review isn’t using the interview to its full potential. Don’t just analyze the employee’s performance; ask that person to analyze the dealership’s performance. You might not like what you hear, but it could be useful to improving the dealership. “I didn’t think that was an issue, but it sounds like it’s not the best way for us to do things. How do you think we can make it better?”

Is each employee in the right position? A dealership obviously doesn’t offer as much opportunity for advancement as a large corporation does, but use the review discussion to see how each person fits into the position they occupy. When you do, don’t automatically think “up.” Some people may be racking up sales and profit numbers, but it’s extremely stressful for them to do that. This might be someone who would like to step back a bit into a lower-key role, but doesn’t know how to ask for it.

Finish up with a forward plan. You know how your employee has performed in the past – that’s all in the review. Where are you both going from here? You should have already had a plan outline ready, but be flexible. Make changes as needed, depending on what the two of you have discussed during the review. That can include the part you need to play in that plan, such as providing additional training, or handling any issues with other people in the dealership.

Follow up again one-on-one within a month or so, to find out if that person thought of something later that should have been brought up, and if any issues that concerned either of you have been resolved. A performance review is more than just how someone has performed. If it’s done right, it’s a chance for both of you to learn, to grow, and ultimately, to improve the dealership’s performance to everyone’s benefit.