An Entrepreneur’s Guide To Year-End Employee Evaluations

As the leaves begin to fall and the season changes, it’s a reminder that this challenging, disruptive and unprecedented year is already coming to a close. It also means that leaders will be assessing their teams, evaluating their strengths and limitations to improve their capacity in the year ahead. 

After a pandemic year, these evaluations will be more complicated and multifaceted than ever before. Many teams embraced remote work for the first time or adjusted to new workflows and customer interaction requirements. In addition, according to one survey, nearly 80% of employers utilize some kind of employee monitoring software, creating new data streams for evaluating employee performance. 

At the same time, workers are quitting their jobs in record numbers, making it imperative that entrepreneurs understand the employee experience to create a compelling and highly effective workplace. That’s why, as entrepreneurs complete their year-end employee evaluations, there are three questions they must answer about their employees. 

1. How much are employees working? 

The recent pandemic rapidly expanded many peoples’ workdays. It’s estimated that the average employee added three hours to their workday, which exacerbated an “always-on” work culture that erodes employee well-being and productivity.

As the Harvard Business Review noted last year, more than a third of employees report “that they needed to be constantly available, such as being expected to respond to electronic/telephone messages immediately, be available at all times, and be responsive after work hours.” Consequently, according to a survey by Deloitte, more than three-quarters of employees say they are burned out at their current job, and 91% say they have “an unmanageable amount of stress.” 

Entrepreneurs leading startups can be influenced by hustle culture, viewing constant work as an upfront cost of a new project. However, this mindset produces diminishing returns. One study found “employees at work for a long time may experience fatigue or stress that not only reduces his or her productivity but also increases the probability of errors, accidents, and sickness that impose costs on the employer.”

Failing to establish adequate boundaries or expectations can turn these qualities into constraints that harm employers and employees alike. Entrepreneurs need to understand how much their employees are working, responding accordingly to keep their teams healthy and effective. 

2. How efficiently are employees working? 

People are not always built for efficiency, able to streamline their efforts to diminish wasted time and resources. However, that doesn’t mean we can’t improve our practices. As part of year-end employee evaluations, entrepreneurs should assess employee effectiveness to initiate collaborative discussions that can improve worker performance and overall well-being. 

Data from employee monitoring initiatives can drive these conversations. For example, this data may reveal that employees are spending significant time on specific tasks, prompting reflection on how to improve, streamline or augment these responsibilities. It can also enable better top-down decisions. 

For instance, when Microsoft analyzed data from its employee monitoring solutions, it discovered that employees were most productive during a three-hour time slot each morning, allowing departments to avoid scheduling meetings during peak productivity times. 

As traditional work arrangements are uprooted and replaced, year-end evaluations represent an opportunity to assess employee efficiency to create better outcomes for everyone.  

3. How effectively are employees working?

Perhaps most importantly, entrepreneurs need to evaluate their teams’ productivity, understanding how effectively their employees work and responding accordingly. Of course, there are many ways to measure productivity.

Some leaders will assess their employees’ activity, using data and personal observations to evaluate the amount of work rather than the outcome from their efforts. That’s why many leaders will use employee monitoring data to evaluate metrics, including mouse movements, app activity and message frequency, confusing volume with effectiveness. 

When conducting year-end employee evaluations, entrepreneurs need to consider employee outcomes, not just activity, understanding that it’s a worker’s holistic contribution that most clearly captures their efforts from the past year. 

In this way, year-end employee evaluations can be a catalyst for ongoing improvement that allows employees and employers to maximize their potential.

This article was originally published in Forbes and reprinted with permission. 

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Isaac Kohen