How Employee Performance Reviews Affect Customer Service and Satisfaction

Melissa Thompson 

70% of employees say their employer should understand them to the same degree they are expected to understand customers. (Towers Watson)

Once a year employees across the working spectrum all become subjected to the dreaded performance review. The performance review is a long established tool that is used by management as a way to justify an employee’s position, determine if they are deserving of a raise or bonus and, essentially, separate the wheat from the chaff. As many advocates as there are in support of the performance review, there are as many detractors calling for the demise of this measurement of employee value and worth.

Despite the calls for the end to the performance review, you should understand its value and why it is important. Here is a history of the performance review and the role that it plays as a measuring tool. Additionally, you should understand how you should approach the review process to provide for greater input from outside influencers (i.e. customers) and allow for some flexibility and agility when judging the performance of your employees.

What We Don’t Know About Performance Reviews

Performance reviews have been a tool that has been with us as long as two millennia. The process for evaluating the work performed by workers is believed to have originated in China at around the third century AD. The advent of the Industrial Revolution in the United States during the 18th century saw a correlation between employee performance reviews and productivity. Systems used to appraise the performance of an employee were prevalent in more than 60% of businesses in America in the 1960s.

The Importance of the Performance Review Process

An effective performance review is comprised of the following five elements: agreement, measurement, feedback, positive reinforcement and dialogue. The reason for conducting the review process utilizing these elements is because it aids in creating a positive interaction between you the employer and your employees. Implementation of an employee review goal-setting process that also employs what is known as the SMART system (specific, measurable, achievable, relevant and time framed) helps you track employee progress, but also gives the employee targets in which to shoot for and ultimately achieve.

Making Performance Reviews Work for Your Customer Service Team

Despite what the naysayers may think about the performance review process, they are important for assessing how employees are doing relative to meeting their goals and providing excellent customer service. There are many discernible benefits that come from the performance review process. These include better results from those vested in the review process as goals are communicated clearly. Employee retention, and thus satisfaction, is decreased by 2x. Stated another way, employees who see performance reviews as inaccurate are 2x more likely to look for another job.

Employees should come to realize that the performance review process is an essential tool in improving their productivity, value and worth to your company. The trick however is to use the performance review process as an opportunity to praise good works and find ways to challenge your employees to stretch beyond their capabilities. If your employees come to dread the performance review process or view it as a draconian method used to judge and diminish their value, it may be time for you to redefine the process and make it meaningful to your business.