Employee Performance Reviews: Time for MSPs to Rethink HR?

Employee Performance Reviews: Time for MSPs to Rethink HR?

Check the recent headlines and you'll see MSP executives and staff members jumping from one employer to the next. The economy is improving. New career opportunities are opening up. And in some cases, managed services providers (MSPs) have done a miserable job providing career feedback to their team members. In short, it's time for many MSPs to rethink how they manage ongoing performance reviews -- before key staff members head for emerging opportunities elsewhere.

What sparked this blog entry? Two things: First, I'm getting lots of email from readers who are considering career moves. Some readers feel stale in their current positions, and want to try something new -- perhaps at a new employer. Second, I spotted an article this morning in Newsday, my local newspaper. It described eight areas where small business owners can improve the job review process.

Those eight items, according to Newsday, included:

1. The element of surprise: Feedback should be ongoing and year-round rather than a a surprise annual review.

2. Missing pieces: Performance reviews often fail to identify key areas for career development -- individual goals tied to business goals, and how to potentially achieve them.

3. Tricky self-appraisals: Sometimes employees deliver glowing reviews of their own performance ahead of a performance review. Instead of pursuing such self-appraisals, it might be wiser to request a list of quantifiable achievements from the employee. That way the employee has input but doesn't wax poetic about intangibles.

4. Don't dwell on the negative: Newsday offers up some interesting advice -- for your best performers: You're not required to say something negative. In fact, make sure they exit the interview feeling great about the appraisal discussion.

5. No Room for Sugar: Don't be too harsh or too soft. Offer an honest, accurate review.

6. Keep records: Managers often fail to see the bigger 12-month picture, and focus instead on an employee's most recent performance. Keep notes and accurate records that help track the 12-month performance.

7. What's the goal?: Is there a clear purpose to the employee review? If not, you're wasting your time. And your staff's time.

8. Be specific: Perhaps your employee has a bad attitude. But that's too generic; be specific and offer examples where a bad attitude either hurt the employee or the business.

One thing Newsday failed to mention: Some performance reviews involve salary reviews. Some do not. Be sure to clearly communicate whether a performance review also involves a compensation review. And if you're still trying to figure out MSP compensation packages, I suggest reading this really simple sales compensation plan from Nimsoft VP and GM Phil LaForge.

And consider yourself warned: The job market truly is improving. Plenty of managed services experts held tight to flat salaries during the recession. But gradually, the pendulum of power is swinging back toward employees who are looking for better compensation packages and upward career mobility.

You can either be in reaction mode -- scrambling to retain an employee who pursues a new job -- or you can shift to a proactive mindset, offering clear performance and compensation reviews.

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