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Using Performance Management in Small Businesses

What Role Does the HR Department Play in Performance Evaluation?

A performance evaluation system is an invaluable tool for small businesses. An annual performance review places all employees on an equal playing field and allows the managers of the business to see which employees are creating the most value for the company. Human resources plays an important role in performance evaluations by ensuring that the process is fair, accurate and managed appropriately.

Ensure a Fair Performance System
Human resource personnel are in charge of ensuring that performance reviews are executed in a non-discriminatory fashion. This can be done by calculating the percentage of employees that receive top rankings by gender, age and any other applicable criteria. In a fair work environment, the percentage of top-ranking employees will be relatively equal across demographic groups.

Train Managers on the Performance System
Human resources conducts performance system training for every manager in the company. This ensures that each manager is utilizing the system in the same way and is rating each employee based on the same standards. Thorough training will ensure not only that the system is utilized properly, but that the ratings are meaningful and fair across the business.

Manage Relationship Between Employee and Manager
Poor performance reviews can lead to tense employee-manager relationships. Often, both the employee and manager are unsure how to improve the relationship. Human resources serves as a manager and mediator of any troubled relationships. After performance reviews, human resources can check in with employees and managers and allow them to voice any concerns that they have. For any troubled relationships, set up regular meetings with the manager and employee. During these meetings, the HR representative can discuss the nature of the relationship and provide feedback as to how it can improve.

Record and Store Performance Reviews
Store performance evaluation records in a secure location or a digital database. Previous performance reviews can then be used as a scorecard for employee progress and can be accessed to assess promotions. In addition, ensure that only the proper personal view each individual's evaluations by keeping a list of people authorized to view performance reports.

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