Here’s something to think about: When there’s no consequence for poor work ethic and no reward for good work ethic, there’s no motivation for your self-storage staff. An employee-performance review is a formal assessment of work performance. It fosters open communication between supervisors and team members and, hopefully, improves employees’ work going forward.
The fact is, hourly workers are the backbone of our self-storage organizations, but they’re often the most neglected staffers on the payroll and often overlooked when it comes to training and professional development. I once heard an owner say that giving performance reviews to hourly employees is a colossal waste of time and resources. In reality, every member of your team is valuable and does his part to enhance the company.
What’s your current practice? Do you review all employees, hourly and salaried alike? Do you evaluate employees after 90 days and never again? Maybe once per year? It’s important to engage all workers who are at the front line of your customer experience. A good way to do this is with consistent performance evaluations.
The High Cost of Low Retention
Hourly workers typically represent the highest turnover in any company, and turnover is costly. The Center for American Progress, a public policy research and advocacy organization, puts the cost of replacing an employee who earns less than $30,000 per year at 16 percent of his annual earnings. In other words, to replace a $10-per-hour worker will cost you more than $3,000.
Workplace policies that address the concerns of hourly employees can help reduce turnover. Some states have mandated predictive scheduling laws for these staffers, while other states (and some companies) are increasing their minimum wage. In addition to financial security, these employees want to be valued in the workplace and know their employer is aware of the contributions they make in maintaining market share and customer satisfaction.
The Benefits of Evaluating Staff
Performance evaluations can be key to retention and engagement for staff, particularly those with lower financial incentive. Employees want to know how they’re doing, and reviewing performance is a way to keep an open line of communication, which is key not only when things are going poorly, but when the site is achieving great success.
If an employee is taken by surprise at something revealed to him in a review, his supervisor isn’t doing his job effectively. Reviews don't just clarify goals and reinforce positive behaviors, they help adjust behaviors that aren’t so positive. They assist in building the employee-manager relationship. They also serve as the foundation for career development. That recognition can turn into engagement and retention.
Skipping a performance review, or being late with one, sends a negative message, even if that wasn’t the supervisor’s intention. The time a supervisor spends with each employee is meaningful and could make the difference between the team member staying and thriving with an organization or becoming dissatisfied and perhaps even walking away.
According to analytics and advisory firm Gallup, companies that implement regular employee feedback have turnover rates of up to 15 percent lower than those that don’t. Productive employees who do good work want their work to be evaluated, so they can be recognized. In addition to raising engagement and customer satisfaction, what begins with simple recognition can develop into savings and positive outcomes for the employee and the company in the short- and long-term.
Performance reviews serve many purposes. The top ones are:
- They give staff members a sense of belonging.
- They recognize people who put in extra effort and acknowledge them for a job well done. Demonstrating a person’s value to the organization will lead to them value the organization, making them less likely to leave. The length of time a employee stays in his job is often an indication of how engaged his—how much he cares about his job and puts effort into his work.
- They provide guidance when work isn’t meeting expectations, identifying any areas for improvement, training and possible advancement.
- They’re a good opportunity to summarize adherence to time and attendance policies. Show employees how often they arrived late, left early, took long lunches or unpaid days off, and how much sick time they’ve used.
The first step in conducting a successful employee review is preparation. You should establish a system and process and follow it consistently. It might include things like:
- Having a copy of the employee’s personnel file with you
- Having documentation from previous reviews, including goals and objectives discussed
- Having any forms or reports you need to fill out ready to go
- Having copies of recommendations (or complaints) from managers, coworkers or customers
- Having performance data (sales, productivity, etc.) relevant to the type of review you’re conducting
- Going over all data, comments and documentation, and making notes of possible questions to ask
- Telling the employee the date and time of the review and giving him adequate time to prepare
Note: Performance reviews should be separate from any discussion about promotions or pay increases. When employees think the conversation will affect their pay, they may speak more cautiously and avoid sharing information to protect themselves. Consider a performance review a place to encourage professional development, and create a separate review for promotions and raises, even if the latter is held just a few days later.
During each review, use thoughtful communication that’ll build the employee up, not tear him down. Performance evaluations shouldn’t be all negative or all positive. Being overcritical will likely demotivate the employee, and yet there’s almost always something that could be improved. Tactfully sharing positive attributes alongside the items that need work will help the conversation feel more balanced and ensure employees don’t feel attacked.
It’s also helpful to provide concrete examples for both achievements and areas of improvement. Share them throughout the review. Being able to cite specific instances of behavior to employees proves you’ve truly done your homework as a supervisor. This type of communication is much more effective than simply saying what your team member has done right or wrong. It shows you’ve been paying attention and gives your feedback more credibility.
Your company handbook should be clear about how your employee-review program works and what’s expected of each team member regarding performance, attitude, attendance, sales and so on. It should explain:
- What your review process is and the timeline on which it occurs
- Any benchmarks you’ll cover in a review and expect employees to meet
- What supervisors and managers expect of employees and what employees should expect in return
- What leads to an employee being fired instantly and what would lead to a written warning being placed in a personnel file before the danger of termination is real
- What the end result of a review might be, such as issuing a warning or talking about a possible pay increase
It’s important to lay out your entire program in the handbook and go over it with each new hire. Making this clear reduces fear and dread. It also helps protect you legally, which is why you should work with your legal counsel when developing policies relating to employee termination.
The Impact of Reviews
Look back on the goals you established for your employee-performance reviews. Ask yourself:
- Does performance get better afterward or is it hampered?
- Do employees seem more confident or are they hesitant?
- Has morale increased or decreased?
- Are the changes you suggested for improvement happening in a positive way or at all?
If your evaluations leave things worse than when you started, it’s time to change your process.
Employee-performance reviews aren’t there to weed out “bad” employees. Instead, they’re critical to determining wage increases, promotions, corrections and an overall sense of what’s happening in your workforce. By providing regular reviews, you’ll treat your employees as what they really are—your most valuable asset—and encourage and engage all of them.
Susan Haviland is the owner of Haviland Storage Services, which specializes in auditing, manager training, market studies and operational reviews. She has more than 32 years of industry experience, from serving as a site manager to acting as vice president of operations at Extra Space Storage Inc. and Price Self Storage. She's a frequent speaker at industry conferences and tradeshows. For more information, call 760.401.0297; visit www.havilandstorageservices.com.