Mid-Year Employee Reviews: What Should You Know?

[Fit Small Business | ]( HR Insights from Our Experts Welcome to this week's HR newsletter. We’re so happy to have you!     Creating Effective Mid-Year Employee Performance Reviews   Mid-year employee performance reviews offer a valuable opportunity to assess progress, provide feedback, and realign goals for the remainder of the year. Conducting effective mid-year [performance reviews]( can significantly enhance employee engagement, productivity, and overall performance. Here are some key tips and strategies for creating impactful mid-year employee performance reviews. - Review goals and expectations: This review ensures that employees and managers are on the same page regarding performance expectations. - Celebrate achievements and milestones: Celebrating accomplishments reinforces a positive work culture and motivates employees to continue striving for excellence. - Provide constructive feedback: Constructive feedback should inspire growth and guide employees toward enhanced performance. - Encourage self-assessment: Comparing self-assessments with manager assessments can foster insightful discussions and provide a well-rounded view of performance. - Address challenges and roadblocks: Encourage open dialogue to identify obstacles and discuss potential solutions. Collaboratively develop strategies to overcome challenges and support employees in reaching their full potential. - Revisit and adjust goals: Collaborate with employees to realign goals, making them challenging yet attainable. This process ensures that goals remain aligned with organizational objectives and provides a clear roadmap for the remainder of the year. - Provide development opportunities: Mid-year reviews offer a chance to identify areas where additional support or resources may be required to help employees reach their developmental goals. - Discuss career aspirations: Understanding employees' career aspirations demonstrates your commitment to their development and helps create a clear career path that aligns with their ambitions. - Establish action plans: Develop action plans collaboratively with employees to outline the steps needed to achieve revised goals and address areas for improvement. Action plans should be specific, measurable, attainable, relevant, and time-bound ([SMART](). Clearly define milestones, responsibilities, and timelines to ensure accountability and progress tracking. - Follow up and support: Follow up with employees regularly after mid-year reviews to provide ongoing support, guidance, and feedback. Offer resources, mentoring, or [training]( to help employees overcome challenges and achieve their goals. Maintain open lines of communication to address any questions or concerns that arise throughout the remainder of the year. Embrace mid-year reviews as a proactive and dynamic tool to maximize employee potential and foster a culture of continuous improvement.     An Unexpected Challenge   Increased awareness about pay equity has spurred some employees to share their frustration on social media over unequal compensation as they compare their current salary with the going rates of similar positions in other companies. A few [social media accounts]( have been created to get people on the streets to answer questions about their profession and how much they make in a year. This could lead to some business owners and HR managers battling pay equity issues sooner than they want to. Regardless of whether workers are going on social media to vent their anger or approaching their managers to have a conversation about pay, it’s critical for business and HR leaders to prepare themselves on how to manage this challenge.     Should Your Mid-Year Performance Reviews Come With a Raise?   Most companies conduct mid-year performance reviews to assess their employees' progress and provide feedback on their work. During these evaluations, managers typically discuss job expectations, set new goals, and offer suggestions for improvement. However, one question that often arises during these meetings is whether a pay raise should be included in the package. Some employers may view mid-year raises as a way to reward top-performing workers or retain high-quality talent. For example, when you reward employees with salary increases, it shows that you value their contributions and are invested in their success. This, in turn, inspires loyalty and fosters a positive company culture where people feel appreciated and motivated to perform at their best. Others argue that mid-year performance raises could create an entitlement culture where employees expect a salary increase regardless of their actual performance. To determine if your employee should receive a raise at the mid-year review, they should meet all or most of the metrics below. - All performance metrics have been met and/or exceeded - Employee went above and beyond expectations - Goals have been met and/or exceeded - Employee scored above average on all performance metrics - Employee has no disciplinary actions on file It’s important to note that while salary increases do require financial resources, they can actually save money in the long run. Therefore, part of your annual budget should be allocated to employee raises. This may be based on how well the company is performing at the time, such as a percentage increase based on individual performance. Or it may be a specific dollar amount across the board. In fact, Fortune projects that the [average increase in salaries in 2023 will be between 4% and 5%]( overall. To help you determine if your employee has met all the metrics needed for a raise in salary, use our[downloadable and customizable performance evaluation forms](. Forms are available for hourly workers, salaried employees, managerial staff, and executive-level employees.   5 Steps on How to Create an Employee Performance Review Template   A performance evaluation template provides a standardized format for the evaluation process. Customize it to your team's goals and share it with team members in advance to facilitate preparation and encourage collaborative discussions. This approach creates a more inclusive and less intimidating evaluation experience compared to traditional one-sided forms. - Determine Core Competencies: Although you want a more personalized performance template based on each of your employee’s needs, creating a standardized template avoids a biased assessment. Identify the core competencies or skills that are essential for success in the specific job roles within your organization. These competencies may include technical skills, communication abilities, problem-solving, teamwork, and leadership qualities. By defining the core competencies, you provide a clear framework for evaluating employee performance. - Choose a Rating Scale: Choose a rating scale that allows you to measure and quantify employee performance. Common rating scales include numerical scales (e.g., 1 to 5) or descriptive scales (e.g., exceeds expectations, meets expectations, needs improvement). The rating scale helps provide consistency and objectivity in evaluating different aspects of employee performance. - Decide How Often the Evaluation Should Be: Determine the frequency of performance evaluations. It can be conducted annually, semi-annually, quarterly, or even monthly, depending on the needs and nature of your organization. Regular evaluations provide timely feedback and allow for ongoing performance improvement. - Prepare the Questions and Share Them in Advance: Prepare a set of structured questions that align with the core competencies and objectives of the performance review. These questions should prompt employees to reflect on their performance, strengths, areas for improvement, and career aspirations. Sharing the questions in advance allows employees to prepare thoughtful responses and fosters more meaningful discussions during the review process. - Create a Goal-Setting Framework: Incorporate a goal-setting framework into the performance review template. This framework helps set performance goals, objectives, and action plans for the upcoming review period. It allows employees and managers to align on performance expectations, track progress, and establish a roadmap for professional development. Having performance management software makes the employee review process seamless and easy. Here are some of our top picks for the [best performance management software](. You can also download our[free employee performance template](.     What’s new in HR? Check out some of our latest HR content:   [What is Job Rotation?]( Job rotation is a talent management strategy that involves periodically shifting employees from one position to another within an organization. It gives employees an opportunity to explore various skills, gain new skills, and boost their engagement. [READ MORE]( [Payroll Tax vs Income Tax]( Payroll taxes and income taxes are often confused and used interchangeably without a clear understanding of what they really mean—but they’re actually not the same. This article will walk you through a breakdown of the differences between payroll tax and income tax, plus the specifics of each type of tax to help you understand it better. [READ MORE](     Meet Fit Small Business’ HR & Payroll Experts   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] Throughout her career, Heather has worked to help hundreds of small business owners manage many aspects of their business, from bookkeeping to accounting to HR. Her experience has allowed her to learn firsthand the payroll needs of small business owners. Heather Landau [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] Jen has more than 20 years of writing and content experience, working with small businesses and Fortune 100 companies. She worked as an HR generalist for over a decade, providing accounting, payroll, and HR expertise. Jennifer Soper [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] Robie is a payroll and HR expert at Fit Small Business, focusing on software. She has over eight years of content writing experience, handling different topics. Robie also worked as an HR specialist for 10 years where she managed various facets of HR—from payroll and benefits to employee services and HR systems. Robie Ann Ferrer [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] Juvy has more than 10 years of experience writing product reviews and providing online content for small businesses. Juvy was also a college instructor. She believes that her teaching background, writing experience, and supportive team members are crucial in providing the best answers to readers. Juvy Vallescas [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] Genevieve has more than 13 years of writing experience, working with different clients in various industries. She has ghostwritten several books and ebooks on marketing and leadership. Genevieve also worked as an HR Head of a local manufacturing company and has helped small businesses set up their business and HR processes. Genevieve Que     Until next time, Heather Landau, Jennifer Soper, Robie Ann Ferrer, Juvy Vallescas, and Genevieve Que   For more quality resources on growing your small business: [Marketing]( | [Financing]( | [Accounting]( | [HR]( | [Retail]( | [Ecommerce]( | [Sales]( [Facebook]( [Twitter]( [LinkedIn]( [Alternate text] Want to change what you receive in your inbox? [Update Your Preferences]( [Image]   We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Our business model allows us to bring you the best answers to your questions, without editorial biases or cluttering the site with banner ads that everyone hates. The solutions we recommend to business owners often include products and services. 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