What is a performance review at work?
A performance review is a periodic, formal assessment of an employee’s overall performance and contribution to the organization. It involves identifying strengths and weaknesses, setting future goals, and providing feedback. Conducted annually, monthly, or quarterly, these reviews involve managers and key stakeholders.
The purpose is to offer constructive feedback for skill development and assist in goal setting. A well-planned and executed appraisal boosts employee engagement and fosters a culture of feedback and ongoing development within the organization.
Who conducts an employee performance review?
Typically, an employee’s performance review is conducted by their direct supervisor, who possesses the most knowledge about the employee’s responsibilities and current tasks.
Alternatively, a review may be led by a leadership team member, team leader, senior executive, or a representative from the human resources department in certain situations.
Types of performance review
In terms of time frame
- Weekly performance reviews: This does not require extensive data collection each time or a strong focus on goals. They are beneficial for maintaining records and ensuring that projects, particularly agile or fast-moving ones, remain on track week by week.
- Monthly performance reviews: Monthly performance appraisals are particularly valuable for businesses employing individuals on short-term contracts or freelancers. They are also beneficial for new hires during their onboarding process, helping them transition from job description to actual performance. Monthly reviews aid in keeping new projects aligned and ensuring organizational goals are achieved. Many employees prefer these regular check-ins over annual reviews.
- Quarterly performance reviews: Organizations divide their business year into quarters (Q1, Q2, Q3, Q4) with specific goals, targets, and budgets. Therefore, it is practical to conduct performance assessments during these periods. Three months provide ample time for employees to achieve their objectives, refine organizational skills, and consolidate insights from weekly/fortnightly or monthly reviews into a quarterly progress report.
- Annual performance reviews: Traditional annual reviews often became cumbersome, containing excessive information that was challenging to manage or fairly evaluate an employee’s efforts. They tended to focus on past performance rather than future development, and a year-long interval is too lengthy for meaningful feedback.
Nevertheless, aggregating reviews and feedback gathered throughout the year into a comprehensive 12-month performance report remains a valuable source of information, provided that actionable steps are taken based on the feedback received.
In terms of methods
- Essay evaluation: Involves writing a brief essay summarizing each employee’s strengths and weaknesses, supported by facts and case studies. Although thorough, this approach can be time-intensive.
- Self-evaluation: Requires employees to fill out assessment forms reflecting on their performance, conduct, and behavior. This allows management to compare their assessments with employees’ self-perceptions.
- Checklist scale: Uses questionnaires with yes or no answers to evaluate specific aspects of employee performance, competencies, and skills.
- Critical incident: Involves maintaining a logbook documenting positive and negative employee behaviors, such as exemplary project performance or inappropriate conduct towards customers or colleagues.
Performance Review Guidelines: Do and Don’t Practices
The primary objective of the performance review is to provide guidance, not criticism, to your team members. Your feedback should assist recipients in refining their actions and feeling acknowledged for their accomplishments. To ensure your feedback accomplishes these objectives, employ the following approaches:
| Don’t | Do |
| Proceeding directly to performance ratings | Communicate with a constructive aim |
| Acting based on intuition | Depend on measurable data |
| Subtly critical remark | Valuable feedback |
| Highlighting interpersonal ties | Showcase accomplishments |
| Propose solutions | Identify areas for growth |
| Making a generalized statement | Elaborate on your observations |
| Discuss behaviors or actions | Discuss the outcomes produced |
| Maintaining a unilateral dialogue | Allow for a chance to reply |
What is the optimal method for conducting performance evaluations?
The best approach to performance reviews varies widely due to diverse HR policies, tools, and techniques involved. Each organization’s performance management program is unique, reflecting its culture, values, goals, and specific purposes.
Despite the common goal of improving organizational performance and supporting employee development, productivity, and well-being, traditional approaches to performance management can often be demotivating and uninspiring. They fail to engage employees effectively and fulfill their intended purpose.
Research from the Journal of Industrial and Organizational Psychology highlights widespread dissatisfaction:
- 95% of managers are dissatisfied with their PM systems.
- 59% of employees find PM reviews not worth the time invested, with 56% lacking feedback on areas for improvement.
- Nearly 90% of HR heads report that their PM systems fail to provide accurate information.
It’s time to advocate for redesigning performance management. Instead of annual reviews, effective systems now engage employees more frequently to assess their job satisfaction. Instead of solely reviewing past performance annually, modern evaluations integrate ongoing feedback. Research by Josh Bersin suggests that approximately 75% of multinational companies are transitioning to this approach.
Steps to prepare before the Review
Step 1: Managers need to establish clear performance standards, including ethical guidelines, against which employee performance will be evaluated. It’s crucial to clarify what is considered important and the expected level of performance.
Step 2: Performance reviews delve into employees’ professional lives, impacting their compensation and job assignments. These discussions require ample time to ensure thoroughness and avoid rushed assessments that could leave employees feeling uncertain or undervalued. Managers must also observe employee behaviors well ahead of the review date to provide meaningful feedback on how these behaviors affect others within and outside the organization.
Step 3: Effective performance reviews necessitate identifying the root causes of an employee’s performance, whether related to motivation or ability. Some employees may lack certain skills despite their efforts, prompting consideration of training or coaching opportunities. For those struggling with both motivation and ability, managers must assess whether the role aligns with their capabilities or if a different position or performance improvement plan is required. Conversely, high-performing employees require strategies for recognition, retention, and learning from their successes.
Step to conveyed during the review
During the review, here are five steps to guide the conversation effectively:
Step 1: Clearly convey your positive intentions. Ensure that your feedback aims to enhance the recipient’s performance. If issues such as motivation or ability overshadow potential contributions, consider discussing alternative roles.
Step 2: Provide specific observations. Detailed feedback on strengths and weaknesses, backed by specific incidents, fosters better understanding and receptivity to improvement.
Step 3: Explain the impact of behaviors or actions. Discuss cause-and-effect relationships to illustrate how behaviors influence outcomes. This approach moves beyond generic feedback and encourages actionable insights.
Step 4: Encourage the other person to respond. Effective reviews involve a two-way exchange, allowing for clarification and mutual understanding of perspectives and interpretations.
Step 5: Discuss the next steps collaboratively. Conclude the review with a plan for implementing changes and setting benchmarks for progress, ensuring both parties understand their roles and responsibilities moving forward.
Step to do after the review
The most significant impact of performance discussions often occurs post-review. Frequently, reviews remain isolated annual events with limited effect. The research underscores the importance of setting goals and providing ongoing feedback to drive behavioral change and foster continuous improvement, which is vital for innovation.
Step 1: Implement regular follow-ups
Technological advancements are reducing costs associated with follow-ups. Studies show that simple text message reminders about savings rates compared to peers can be nearly as effective as face-to-face meetings in increasing savings.
Step 2: Identify recurring patterns
Regular follow-up allows managers to identify patterns and establish a cycle of assessment and investment. This process enables strategic realignment of resources-financial, temporal, and personnel to better align with organizational goals.
For instance, in a company grappling with lengthy technical sales cycles, the VP of Sales identified a recurring pattern from reviews: significant time spent on trial phases. By implementing a new platform guided by operations rather than sales, the company reduced the sales cycle and optimized resource utilization. According to Forbes, the adage “People join companies, but they leave managers” underscores the critical role of feedback and coaching in fostering professional growth.
Free performance review templates
It’s crucial to utilize customizable templates that encompass all required feedback areas and metrics, while also delivering a positive review that energizes, motivates, and engages individual employees.
Utilize this performance evaluation template to establish a methodical approach for assessing employee competencies and workplace behaviors based on evidence:
Link download file PDF
Performance-Review-Template.pdf
Performance review examples for managers
As a manager, preparation is crucial for conducting effective performance reviews. Collect and review performance data in advance, including both quantitative metrics and qualitative observations. Ensure clear and open communication, fostering a comfortable environment for discussion where employees can share their perspectives. Provide specific examples of strengths and areas for improvement to avoid ambiguity. Lastly, focus on setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals collaboratively to align with company objectives and employee career aspirations.
Performance review examples for employees
Performance reviews for new employees are crucial for establishing their growth and integration into the organization. Managers should create a welcoming environment, especially since new employees may feel nervous or uncertain about their first review. Begin by acknowledging their achievements and progress since joining the company to boost their confidence and motivation.
Clearly communicate expectations and performance standards tailored to their role, ensuring they leave with a clear understanding of their responsibilities. Lastly, emphasize ongoing support and mentorship through regular check-ins and guidance to help them acclimate and thrive in their positions.
