Guide to Creating a Performance Review Policy

Determine the jobs and their duties

A performance policy should ideally facilitate and promote improvement of both your workers and your company's operational structure. If you have a company manual (or even just an org chart) you likely will have a foundation for the types of jobs your business has and what is expected.

I recommend: Get started by reviewing other companies' performance policies. Check out these overviews from Child Care Ontario and the University of Michigan library system, as well as this nice table format review. Also take a look at the various types of job-performance appraisals. Performance Appraisal Forms offers a synopsis of the four most popular methods. And Michigan State University's sample performance review letters give you an idea of what you should be looking for in a worker, as well as what you don't want to see on the job.

Put it on paper

Once you decide upon your performance system, then it's time to actually do the employee evaluations. Much like doing your taxes, the paperwork is as big a hassle as the actual review. Don't reinvent the wheel. Use a template.

I recommend: Success Factors, HRN Management Group and Performance Appraisal Forms each have standardized forms that also allow you to customize to suit your company and specific positions. Prices range from just under $40 to $795.

Find the right words

A form won't do you much good if you don't have the proper words to fill in the blanks. You want to be clear and precise, and set a tone that motivates and encourages as well as corrects any problems.

I recommend: You can get the right phrases by downloading Market Communications' 1,000 Bullet Points for around $25 or buying the book "2,600 Phrases for Effective Performance Reviews" for $10.95.

Give employees a chance to be heard

Build into your review process at least two face-to-face meetings between the manager and employee, one before and one after the manager writes the official review.After all, a review is just a communication device, as much for the employee as the manager.Hear the employee's side of the story before the written review and check for understanding after presenting the review.

I recommend: BusinessTown gives you a script for a productive performance-review meeting.