For most businesses, the end of financial year signals staff review time. We thought we’d provide some ideas to keep in mind when approaching this important task.
1. As salaries are the most significant budget item for most businesses, consider what you can actually afford. If income is unlikely to increase in the following 12 months, can you afford to provide any salary increases? Setting a cap on the total increase for this budget item can help in setting some discipline to salary increases, and forces owners to consider who may be deserving of an increase, rather than assuming that everyone is automatically entitled to an increase. Thinking globally about wages can also help bring some consistency to wage levels across your business – ensuring people doing similar types of work are paid at similar levels. It may also be timely to consider the configuration of staffing – including whether work flow and the sharing of responsibilities need to be reviewed in light of market changes and technological advancement.
2. Studies consistently demonstrate that for most people, being valued and being allowed to operate with some degree of autonomy in their role is just as important as what they are paid. Annual review meetings provide an opportunity to listen to your staff, to value their input, and to find ways to give them an increased sense of responsibility and independence in their role. Come to meetings with an open mind, remember that your staff will identify issues that are invisible to you, and take value from the meeting, rather than simply viewing it as an obligation to be endured.
3. Invite staff to review and rate their own performance prior to the meeting. This will often highlight issues requiring focused discussion. Sometimes staff lack insight into their deficiencies; more often however staff will downplay their achievements, and this will provide an opportunity to provide praise and to commend good effort. We all like to be recognised, particularly given we spend so much of our lives at work!
4. Set goals together. Make those goals measurable. Provide each staff member with a copy of the list of goals for the coming year, so that at the next review meeting, you can assess progress and recognise achievement. Where an employee has not met their goals for the previous year, make use of this opportunity to challenge behaviour and reinforce what is expected in the coming months.
5. It is a mistake to use the annual review meeting as a disciplinary meeting. Staff may feel ambushed and devalued if the focus of the annual review meeting is too negative. From an employment law perspective, you should remember that it is always preferable to have a witness present for disciplinary meeting (see section 387 of the Fair Work Act), and this would usually conflict with the confidential discussions that might occur in a staff review meeting. If performance requires disciplinary action, schedule a separate meeting with the employee to deal exclusively with that performance issue, and allow the employee to have a support person present.
At Atkinson Vinden we provide HR advisory and employment law services to numerous businesses, both large and small. We’ve just about seen it all, and we love giving our clients suggestions to improve workplace morale and productivity.
Please call us if you need a hand with any staffing issue.