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    Performance reviews: Doing them right




    Performance reviews: Doing them right


    DOROTHY PENNACHIO is a senior editor at Medical Economics, a sister publication. This article is adapted from one that originally appeared in that magazine.

    Performance reviews are a key part of maintaining a well-run office and a crucial means of keeping staffers motivated. Here's how to do them right.

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    Yes, I know. You hate doing performance reviews. What office manager doesn't? But giving this task short shrift can be disruptive to your staff and damaging to the bottom line.

    "Performance reviews are an integral part of the business side of a medical practice," says Gloria J. McCallum Hausser, a consultant in Jacksboro, Tenn. To prove her point, she tells the story of an office manager who had approached her recently because she—and the physicians in the group—wanted to fire a receptionist who had been rude to patients over the telephone.

    "They'd had it up to here and decided she had to go," says Hausser. However, the office manager had not documented the group's dissatisfaction on the receptionist's performance reviews, and consequently had no proof that the staff member had been given help in improving her telephone manner. It took months to document the situation before Hausser felt it was "safe" to fire her without risking a lawsuit.

    But performance reviews are not just a legal antidote. As necessary in the solo practitioner's office as they are in large multispecialty groups, performance reviews give you an opportunity to encourage the behavior you want to see in your office. And the fact is that staff members expect to be reviewed. They want to know what is expected of them, and they look to reviews for constructive criticism and motivation.

    "You can't expect employees to improve unless they are monitored," says Neil H. Baum, a urologist in New Orleans. "You have to let them know you expect them to continually learn new skills and improve on the service that they provide."

    Once a year is not enough

    There are three types of performance reviews, and most experts recommend doing them all:

    The 90-day review. New hires should be evaluated shortly after they have joined the staff, usually after three months on the job. If there's a problem, it's least painful—and least expensive—for everyone to discover it early on. A new hire is either a "go" or a "no-go"; don't waste time trying to rehabilitate someone who's showing signs of serious problems.

    To set the stage for this, however, it's important to state clearly in any job offer that this is not a binding contract or guarantee of employment, and explain that the first 90 days is a trial period designed to ensure a good fit.

    Turnover during the first 90 days isn't charged against a practice's unemployment insurance rating in most states, because it's generally necessary for an individual to work two calendar quarters to qualify for benefits. But check with an attorney or your local unemployment office because unemployment insurance is complicated, Hausser advises.

    The incident review. Discuss any distressing event within 24 hours of its occurrence—but not while you're still fuming. On the flip side, praise a staff member as soon as possible after she's done something deserving. Neither situation should wait until the scheduled annual review.

    The annual review. Experts recommend reviewing all staff members at the same, pre-announced time, rather than on the anniversary of hire. For one thing, you get the job over with at once. For another, doing so provides a snapshot of how the entire office is doing, without having to factor in seasonal and other changes. As a result of the review process, you may find that certain tasks need to be shifted among staff members.

    If you don't already have formal job descriptions and standards for everyone who reports to you, formulate them before the annual review process. In smaller offices, there's a tendency not to bother with job descriptions, but they can be important in the event of litigation, practice management consultants advise. Descriptions needn't be long. For example, the one for the front desk receptionist could be: "Greets patients. Collects co-payments, outstanding accounts, and any charges for that day's services."

    It's a good idea, too, to establish a standard. This should be as specific as possible: "Collects from 90% of patients," for example.

    Every comment you make during a performance review should relate to the staff member's job description and standards, which should also be flexible. If an individual consistently surpasses a standard you've established for her, for instance, raise the bar for the following year.

    Some experts suggest that office managers do additional evaluations throughout the year so there are no surprises at the annual review. One-on-one meetings with each staff member every six to eight weeks are ideal, according to Richard D. Hansen, vice president of the Medical Group Management Association (MGMA) Health Care Consulting Group. But they needn't take long. "Focus on one task that's being done very well and one that needs improvement," he says. Then use the year-end review to decide on what training is needed when skills are lagging.

    How to conduct a performance review

    Since improved performance in the future is the goal of a formal evaluation, don't make the common mistake of putting undue focus on past performance. In general, appraisals should be:

    • candid and explicit;

    • objective;

    • based on job performance rather than on personal traits (attack the problem, not the person);

    • helpful, with concrete advice for improvement;

    • related to specific functions, not global assessments; and

    • in writing.

    This last point is especially important, not only to give yourself and the individual evaluated a document to refer to, but also as a legal protection. If a disgruntled former staff member sues, timely and consistent documentation can buttress the defense. Conversely, lack of documentation can be used to build a case, and seemingly innocent statements can prove incriminating.

    For example, a medical group could be sued for wrongful termination if regular reviews don't show that a staff member has performed inadequately and been given ample opportunity to improve. The problems will be compounded if the individual is a member of a protected class because of race, religion, gender, age, or disability.

    You'll sidestep legal problems and make your reviews more useful by being precise and referring to specific events. Avoid vague descriptions like "reliable" in favor of such specifics as "meets deadlines and always arrives promptly."

    "Be careful with rating scales, like 1 to 5 or poor/fair/average/good/ excellent," advises Jeffrey J. Denning, a consultant at Practice Performance Group in Long Beach, Calif. "Without further explanation, these scales can be misinterpreted." For instance, some people equate average or 3 with mediocrity, when that may not be what you meant at all. Denning suggests the following clarifications of a 1 to 5 system:

    5: Performance is outstanding and deserving of special commendation.

    4: Performance is above average but doesn't merit special commendation. Needs very little improvement.

    3: Performance is satisfactory and within the middle limits of acceptability.

    2: Performance is at the lower limit of acceptability. Needs improvement.

    1: Performance is unacceptable.

    Watch out, too, for "ratings creep," says Denning. "Don't award that 5 too often. Staffers should understand that only a few are in that top category, and it's something to strive for." On the other hand, don't withhold good ratings when they're earned. Another tip: Sandwiching censure between layers of praise makes the criticism more palatable.

    Some office managers are reluctant to give praise for fear it will create an expectation of a big raise, Denning observes. "Sure, everyone wants to earn as much as they can," he says, "but employees don't necessarily expect a raise every time they do something right. They do, however, like to have good work acknowledged."

    In fact, you shouldn't discuss money at all during regular performance reviews. The issue should be how well each staffer is doing her job, not what she's paid. Take the time to solicit feedback and discuss career goals, too. (See the "Some questions to ask the staff" box.) The meeting typically takes about 30 minutes.

    You do have to connect salary increases with performance, though. A raise implies satisfaction, and if a terminated employee sues, she can point to a history of pay raises to show that she thought her performance was adequate.

    Doing top-down and bottom-up reviews

    In most offices, the review process begins with the physician with the most administrative authority reviewing you, the office manager. You, in turn, then review others in the office.

    Before evaluating any staff member, though, it's a good idea for you to get feedback from the staffer's co-workers, as well as from the physicians, Hansen advises.

    It's a good idea, too, to give staff members the opportunity to review how you and the doctors are doing. A bit of role reversal at the annual performance review time does wonders for morale and allows the staff to let off some steam.

    Some questions to ask the staff

    • What do you like most/least about working here?

    • What things need improving?

    • Where do you want to be professionally in: three months? six months? one year? five years?

    • What can I do to help you reach your goals?

    • What are you doing to reach your goals?

    • Do you have any other comments or suggestions?


    Dorothy Pennachio. Performance reviews: Doing them right. RN Jul. 1, 2003;66:on2.

    Published in RN Magazine.

    Dorothy L. Pennachio
    Dorothy Pennachio is a senior editor at Medical Economics, a sister publication.