Benefits of Performance Reviews

Use performance reviews to communicate objectives, strategies, and tactics to your team. This is the time to get everyone on the same page regarding what is expected of them. Employees need to know if their work levels are adequate or if there are areas where improvement is necessary to meet quality requirements.

Carl Van, president and CEO of the International Insurance Institute, Inc., and an expert in the claim industry, advises that claim professionals, by nature, are accustomed to making decisions and backing up those decisions with documentation or facts. When they receive negative reviews or low quality scores, they seek specific information to show them where the problem exists. It is Van's experience that when employees consistently receive poor reviews, they do not understand what is being asked of them—even if their managers feel it has been thoroughly explained. He suggests providing an example of how the task could have been done differently to achieve better results.

If you are also creating goals for the coming year during your review, ask employees to come to the meeting prepared with a few personal performance goals. Encouraging employees to take ownership for their goals will increase their performance and enhance their desire to reach those deliverables. Keep in mind that the most motivating goals are ones that are difficult, yet attainable. If necessary, set mini-tasks or check-up points that relate to a larger, overarching achievement. This management-by-objectives style will increase employees' dedication to projects.

Quality Assessment

In the claim arena, performance evaluations are based on a number of factors that usually include timelines, thorough investigations, and customer service. Many areas of claim handling are subjective, and various methods could ultimately achieve the same outcome. On the other hand, some areas of claim handling deal with more concrete issues such as damages, estimates, and coverages. Overall, the claim department is working to increase productivity, decrease costs in association with loss adjustment expenses (LAE), and improve customer service.

With the knowledge that claim handling is the number one factor in customer retention for insurance companies, there is an ever-increasing pressure to evaluate and improve claim-handling procedures. This starts with the adjuster or the claim handler. The performance evaluation of the claim handler, as explained above, should increase communication, establish expectations, reinforce good work performance, point out unsatisfactory performance, and offer guidance about how to improve.

All that being said, it's unrealistic to have perfect evaluations of everyone. All of your employees are never going to be working at the same, high-performance level. Be honest when evaluating underperformers, but also demonstrate your commitment to helping them succeed. Use the performance assessment to focus on the root of a problem and work with them to develop potential solutions. Do employees have the tools and resources necessary to succeed? Do they thoroughly understand the tasks assigned to them? Show employees that you are dedicated to their success, yet remain firm when describing the expected quality and quantity of their output.

Claim handling is a balancing act of people/customer service skills, subject knowledge (such as property/casualty, workers' comp, and so forth), and technical abilities. The most successful claim handlers will provide value in all three of these categories. However, there will always be areas where some employees excel over others. In the performance assessment, it is important to reinforce the strengths of each employee and build upon those strengths, while pointing out the weak areas and providing constructive advice.

David G. Javitch, Ph.D., is an organizational psychologist, consultant, and internationally recognized author. He offers this advice: Before the interview is complete, make sure that both you and the employee know specifically and measurably what went well in the past year and what did not. Ensure that you agree on concrete plans to maintain and increase positive performance, while minimizing or eradicating negative performance. Both of you need to agree on future behavioral goals to achieve success, along with benchmarks throughout the coming year to measure accomplishments.

Performance reviews don't have to be daunting tasks. Think of them as a formal time to reflect on the past year and focus on boosting performance and accomplishments in the year to come. While some employees may be performing below standard, use your criticism constructively to support their success and ultimately increase the overall productivity of your team.