What is a performance review for employees?
A performance review is a formal regulated assessment mechanism in which managers and other key stakeholders evaluate an employee’s work performance. The purpose is to learn more about their strengths and weaknesses, offer constructive feedback for skill development in the future, and assist with goal setting.
Whichever methodology you choose for performance reviews, a well-planned and executed performance review boosts employee engagement and sets the tone for creating a culture of feedback and ongoing development at your organisation.
eBook: Use Employee Lifecycle Feedback to improve your EX
Types of performance review
Weekly or fortnightly performance evaluation
Weekly or fortnightly performance reviews don’t need to collect a vast amount of data each time or be particularly goal-oriented. They are helpful for record-keeping and making sure a project – especially an agile or fast-moving one – stays on track week by week
Monthly performance appraisals
These are especially useful for businesses who employ people on short-term contracts or freelancers, and for new hires during their onboarding process, as they go from job description to actual performance. New projects also benefit from monthly employee reviews so that they stay on track and organisational goals are met. Some employees typically prefer monthly check-ins over annual reviews.
Quarterly performance evaluations
Companies divide their business year into quarters (Q1, Q2, Q3, Q4), with set goals, targets, and budgets. It makes sense that assessing performance is run alongside these. Three months is sufficient time for an employee to achieve their goals and targets, as well as hone their organisational skills. You can also aggregate weekly/fortnightly or monthly reviews together each quarter to create a report of an employee’s progress, ready for a review meeting.
Annual performance review
Some businesses still conduct an annual review, but it is increasingly being replaced, or at least supplemented, by pulse surveys and 360 reviews throughout the year. These traditional and formal performance reviews tended to become overblown, with too much information on them to be manageable, or to be a fair evaluation of an employee’s efforts. They looked back on past performance rather than forwards to future performance, and a year is far too long for employees to go without feedback.
That said, reviews and feedback throughout the year collated into one 12-month overall performance report are a useful bank of information, provided all the feedback has had actions attached to it.
Who runs an employee performance review?
It’s usually the person’s line manager, as they know most about the employee’s role and their current work. In some cases, a leadership group, team leader, or a more senior leader may lead the review or someone from human resources.
Why are performance reviews important?
As well as long-term positive outcomes, performance reviews offer an immediate lift – not only for businesses but for employees who want an overview of their strengths and weaknesses and progress in their careers. Here are some of the benefits performance reviews can offer:
1. Aligning personal roles to business goals A job performance review is a chance to make sure everyone understands the organisation’s vision and goals and how their work fits into the bigger picture. Individual performance drives organisational performance.
2. A clear understanding of job roles Performance management empowers individuals to think about their role within the organisation and clarify any areas where they have questions. When employees and supervisors can clearly understand and own their specific job duties, any ambiguities in the workplace are eliminated. Each person is accountable for their work and responsibilities.
3. Regular feedback about performance Regular feedback contributes to better all-around communication in the workplace. Performance reviews help to identify an individual’s strengths and weaknesses, and most importantly, give employees a better understanding of the expectations that they are being held to.
Performance management can be a motivational tool, encouraging employees not only to feel more satisfied in their work but to take action beyond what’s expected.
4. Career development The performance review presents the opportunity to plan for and set objectives to further develop an employee’s career. Performance management will also help them gain any additional training or mentoring which can act as a basis for HR’s development of future succession plans.
5. Rewards for good performance Performance management offers a variety of rewards beyond just compensation that show gratitude for a job well done, such as time off and bonuses. The prospect of a better than ‘exceeds expectations’ performance appraisal – one where it is recognised that you’ve gone above and beyond – is an incentive to perform well and may open the door to career advancements in the future.
Collect and apply employee feedback with our 360-Feedback eBook: Download Now
What’s the best approach for performance reviews?
With so many practices, HR policies, tools, and techniques involved, no two performance management programs will look the same. Some have grading systems. Others have question and response formats, while others are expected to be free-form.
Just like your company culture, your performance management system will be unique and specific to your values, your goals and your purpose.
However, every good employee performance review process seeks to improve how the overall organisation performs while supporting the performance, development, productivity, and well-being of its employees.
Despite this common goal, data suggests that traditional approaches to performance management can be demotivating, uninspiring, and make people want to give up rather than work harder and progress.
In fact, traditional performance management (PM) is universally disliked by both managers and employees. It is seen as having little value and has failed to meet its intended goal of improving performance. According to research reported in the Journal of Industrial and Organisational Psychology:
- Among managers, 95% are dissatisfied with their PM systems.
- Among employees, 59% feel PM reviews are not worth the time invested, while 56% said they do not receive feedback on what to improve.
- Almost 90% of human resources (HR) heads report that their PM systems do not yield accurate information.
It’s time to make the case for change and redesign performance management. Instead of an annual performance review, a better performance management system frequently engages its employees to better gauge their work satisfaction levels.
So rather than focusing on past performance in a yearly review, a better employee performance evaluation system incorporates continuous feedback. Research from Josh Bersin estimates that about 75% of multinational companies are moving toward this model.
What should a performance review look like?
Performance reviews based on a continuous feedback philosophy are more likely to be future-focused and geared towards promoting growth and development. Rather than rating employees against a one-size-fits-all standard based on their past performance, continuous performance management treats each employee as an individual whose full potential can be maximised.
