Performance Reviews: An Effective Tool to Reduce Turnover and Improve Engagement
As we discussed in our last blog post, veterinary healthcare suffers from significantly above-average annual turnover compared to other professions, particularly among technicians and non-credentialed support staff: veterinary technician turnover at veterinary hospitals averages 22%, and overall veterinary employee turnover is 21% (nearly double the national rate across all industries). Turnover is expensive for businesses, not only in terms of the direct financial cost of replacing employees but also due to the significant disruption in capacity and quality of services due to training new staff and managing an overall inexperienced and undertrained workforce. One estimate puts the cost of hiring and training a new veterinary employee as high as 50-75% of the employee’s annual salary.
Turnover is often avoidable if leadership is actively engaged with their employees about their level of job satisfaction, their goals, and what it takes to retain them. According to one study 52% of voluntarily exiting employees say their manager or organization could have done something to prevent them from leaving their job, and 51% say that in the three months before they left, neither their manager nor any other leader spoke with them about their job satisfaction or future with the organization. Many veterinary practices do not have regular performance reviews with key employees, and even fewer have regular performance reviews with all employees. Instituting regular performance reviews for all employees is an opportunity for veterinary practices to improve performance, improve employee satisfaction, address brewing issues before they reach a breaking point, and reduce employee turnover.
Preparing for a performance review with an employee
Quantify whatever you can. Objective numbers are the easiest way to present performance where possible, as it eliminates perceptions of bias and helps bridge the gap that may exist between how an employee feels they’re performing compared to how you might feel they’re doing. This will be easier for associates whose direct financial production is easy to quantify and more challenging for support staff.
For qualitative assessment, have a consistent system for evaluation and ideally aggregate assessments across as many relevant supervisors as possible (practice owner, practice manager, lead tech/receptionist, etc). Having a clear, consistent, written evaluation system is important in order to remove actual and perceived biases from the equation.
Ask your employee to prepare feedback for you as well. Performance reviews are a two-way street where both parties should walk away with a better understanding of where things stand.
Make sure that expectations of performance have been previously communicated clearly to the employee. A detailed job description that spells out expected performance and an employee handbook that spells out consequences for failure to perform provide you with a foundation for all future correction. If you haven’t clearly communicated expectations and consequences to employees then that needs to be addressed first before attempting any corrective measures for employee performance.
Listen more than you speak. The employee review isn’t just an opportunity for your employee to better understand how you think that they’re doing, but also an important opportunity for you to understand how they feel about their role at the practice, their job satisfaction, and areas where the practice might not be performing at its best.
Provide balanced feedback highlighting both areas of strength and areas in need of improvement.
When discussing areas in need of improvement, always provide actionable feedback and details of how their employer is going to support them in their improvement (training, operational changes, scheduling changes, more supervisory oversight, etc). Telling someone that they’re not doing something right without providing them with a clear path of remediation is unproductive, breeds animosity, and ultimately doesn’t lead to resolution of the issue. Goals should be SMART: Specific, Measurable, Attainable, Realistic, and Time-Bound.
Meritocracies work: Tying performance to compensation is a great way to align incentives. Communicating a concrete path to improved compensation commensurate with the expected improved performance demonstrates that the practice is invested in their growth, especially when dealing with an underperforming employee.
Identify training needs, even among your top performers. Performance reviews aren’t meant just to look backwards in time at past performance, but also to set goals for future performance. Finding ways that the practice can invest in improving the quality of their workforce is a win for everyone involved. Employees are more likely to feel satisfied at a job where they feel that they have opportunity for personal growth, and improving staff core competencies is an obvious benefit to the practice.
Close with a summary of what the expected path forward is and how everyone involved can bring it about. For example: “Thank you for your time today, Bill. To wrap things up with a quick summary: we’re happy with the work that you’ve done over the last 6 months and we’re excited to see you continue to grow at our practice. We’re going to be increasing your compensation by $0.50/hour as a cost-of-living adjustment and an additional $1.00/hour as a performance adjustment to reflect the work that you’ve put into improving the skills that we discussed last we spoke. We discussed our concern that you weren’t clocking back in from lunch in a consistent and timely manner, and you’ve expressed that you’re going to work on improving that. We’ve scheduled a quick check-in one month from now to review your progress on that. You also expressed interest in improving your skills at drawing blood and handling fractious cats. We’re going to set aside 10 minutes every Friday morning before appointments where you can work with the lead technician on these skills, and I’ll communicated to her that we should find opportunities for you to participate in cases where you can practice those skills. I appreciate your continued hard work and if you have any questions or concerns that arise before our next scheduled conversation please don’t hesitate to bring them to me.”
The employee should sign the review form at the end of the review. This doesn’t necessarily mean that they agree with the conclusions that you’ve arrived at but does demonstrate that it was fully discussed. This is an important part of the paper trail that supports the termination of an underperforming employee and protects the practice from accusations of wrongful termination.
After the review
Follow up! Make sure to follow through with the planned points of follow up that were specifically discussed in the review, and intervene sooner if it doesn’t seem like progress is being made in addressing the concerns that were flagged.
Continue with unscheduled pulse checks. Formal performance reviews are an opportunity for you to better understand your employees, their concerns, and your business in general. They’re not a replacement for, but a supplement to the regular managerial duties of following and addressing concerns on a rolling basis. Don’t punt difficult conversations to reviews down the road: If something isn’t working, face it head on or run the risk of losing employees.
Build a leadership plan to address the concerns that employees brought to you. You’ve given them a plan for how to improve on their end and fix the issues you brought to them. Now it’s your turn to build a plan for how you can improve to meet them in the middle and fix the issues that they brought to you.