Performance reviews are an essential part of running a successful business. They serve as a check-in to ensure everyone is on the same page about expectations and duties and are critical for team growth. The truth is, performance reviews are stressful and can be uncomfortable for both employees and managers. Managers are left having a face-to-face conversation with someone they work with and telling them what they are good at, not so good at, and what they need to improve on. You have to remain tactful but also be direct. If you don’t do a good job on your performance reviews, your employees can feel confused, disappointed, and anxious.
On the other hand, a well-done performance review is a powerful mechanism for positive change in your company. It will help reinforce solid performances, redirect poor ones, and provide cohesion and vision for your team. So, how do you be sure to conduct a successful employee performance review? We’ll cover that in detail in this post.
Why Are Employee Reviews Important?
Employee reviews are beneficial for employees and the organizations they work for. They:
Assess performance
Employee reviews give managers a structured setting in which to assess whether individual team members are meeting performance expectations. This is useful for keeping employees on track and helping the entire organization by building a stronger workforce.
Improve communication
Performance reviews foster an open dialogue between employees and their supervisors. Effective communication promotes transparency and builds trust, which are essential for a healthy company culture.
Ensure goal alignment
One of the biggest gripes of disengaged employees is that they don’t feel they’ve been given clear goals. Regular reviews ensure employees’ goals align with the company’s objectives, which keeps employees motivated to work toward the desired outcomes.
Offer opportunities for development
Reviews offer a dedicated chance to give feedback and identify further training and development opportunities. Since top performers place a heavy emphasis on continuous development, this helps with retention while strengthening skill sets.
Recognize contributions
Recognizing employees’ hard work and progress during reviews boosts motivation and strengthens morale. This can lead to more satisfied, engaged workers.
Aid in succession planning
Performance reviews help managers identify high-performing employees and learn more about their career goals. This can help the company build a pipeline of future leaders while demonstrating to employees that the organization is committed to their long-term success.
Related: Steps to Strategic Succession Planning
Types of Performance Reviews
Annual reviews
This is the most traditional type of performance review, which employees will most likely be familiar with. It allows for a broad overview of an employee’s performance and a check-in regarding annual goals. However, reviewing performance only once a year can mean feedback is dated by the time an employee receives it. It also means crucial issues may go unaddressed for long periods of time.
Quarterly or semi-annual reviews
Quarterly or semi-annual reviews are more frequent than annual ones, which allows for more timely feedback. The major downside is that they’re time-consuming, and doing them so frequently means there might not always be significant new feedback to share.
Self-assessment
In self-reviews, employees assess their own performance against a predetermined set of criteria. This review style encourages self-reflection and accountability and allows employees to raise any concerning issues with their managers. However, since people are notoriously bad judges of their own performance, self-assessments need to be balanced with other forms of supervisor feedback to facilitate effective development.
Peer review
In some cases, an employee’s peers know their work better than their manager does, which is why peer reviews can be effective. In this review style, teammates review one another’s performance, especially collaborative skills like teamwork and communication. One big downside is that some team members may be uncomfortable giving feedback to their peers.
Project-based review
Project-based reviews evaluate an employee’s performance on a specific project or task. This allows for highly targeted, timely feedback, though it’s not a great way to assess overall performance.
Continuous feedback
In this approach to performance reviews, employees are continuously given feedback and coaching, which can foster ongoing improvement. This review style requires commitment from managers and employees and can take time to adjust.
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How Should Performance Reviews Be Conducted?
During any performance review, the goal is to give constructive performance feedback to your employees and set clear goals going forward. A good performance review will focus on performance improvement or reinforcement, productivity, specific responsibilities, future goals, and reiterations of your company’s mission and values. It will also allow your team members to voice concerns or feedback.
How Do You Give a Good Performance Review?
A good performance review will be clear, specific, and goal-oriented. Your focus should not be on blaming but on problem-solving. Managers should guide their members toward growth and opportunities in a way that is conducive to the company’s overall goals and mission. Proper preparation can help.
How Often Should You Conduct Employee Performance Reviews?
Performance reviews should be conducted routinely, but the frequency of those reviews will depend on your company. Things to take into account when deciding how often to do performance reviews are company size, availability of resources, the specific needs of your company, how frequently you give informal feedback to your team members, and how frequently goals change or shift in your company.
Many companies conduct annual reviews, but the trend is moving toward semi-annual and quarterly reviews. Longer periods between feedback can cause team members to feel stressed about what they might hear if they haven’t heard much feedback in between reviews. Regardless of how often you have performance reviews, follow our performance review tips for managers.
How to Conduct an Employee Review
1. Set goals and expectations
Before a performance review, your employee should have a pretty good idea of the goals and expectations of his or her position. These goals should be laid out upon hiring and reinforced through consistent feedback. Many companies find it useful to revisit these goals at the beginning of the year, and they should absolutely be revisited during a performance review. A great way to set expectations is to use SMART goals:
Specific
Goals need to be specific and narrowly tailored to the task at hand so that your team members know what results you expect from them.
Measurable
If a goal is not measurable, it will be difficult, and even impossible, for your team members to know if they are making progress. Setting milestones will help team members remain focused.
Attainable
Setting high standards can motivate your team members, but keep goals attainable and realistic.
Relevant
Goals should align with your company’s overall mission. If you set expectations for your team members who feel out of step with the company’s overarching principles, they are more likely to perceive them as unimportant and ignore them.
Time-bound
Goals should have start dates and deadlines. Without time bounds, goals can be put on the back burner as new issues arise. Deadlines will help set appropriate expectations for your team members.
2. Make time and space
If you prioritize performance reviews, team members will feel heard, and you’ll be most effective in giving feedback. This means creating a time and space conducive to communication. Make sure you’re allocating an appropriate amount of time and energy to the reviews. Plan them well in advance so that you can keep your schedule clear of any other time-consuming tasks. Ensure your team members know the times and dates in advance so they can do the same.
In addition to making time, the environment you choose will greatly impact the overall feel of the meeting. Is this a closed-door or open-door meeting? Is it in-office, or are you going off-site? Will there be other people present? The right call will vary depending on many factors, but planning for this ahead of time will help you set the right tone for your specific company.
3. Prepare your documentation
Review your team member’s file, including any awards received, workshops taken, progress on goals, and other relevant paperwork. Make notes about any accomplishments that merit recognition and any issues and suggestions that must be addressed.
Preparing an agenda will help you stay on time, keep focus, and make the review more productive. Your precise agenda will be unique to you, but some common discussion points are:
- Discuss the objectives of the performance review
- Review of performance against objectives
- Discuss job satisfaction
- Feedback and ideas specific to their position
- Review the meeting points
- Discuss new objectives going forward
4. Review past performance
Ideally, you’ve been giving feedback and guidance to all employees throughout the year. Hopefully, you’ve addressed any major issues that came along the way. Any issues you address at a performance review shouldn’t come as a total shock to your team members. It’s still important to review any major issues, even if they have been resolved so that you and your team member can be on the same page and evaluate a full picture of the employee’s overall performance. This meeting will be a new opportunity to address and correct past and current performance in real-time
5. Help your staff members prepare
Just as your preparation will make the review more productive, a prepared team member will also help make the most of your time together. Give your team members plenty of notice prior to the performance review so they can mentally prepare. You can also provide them with the agenda beforehand so they know what to expect. Let them know that you welcome comments and feedback. This process is as much about them as it is about the company, so they should be invested and active participants.
6. Give constructive feedback
Performance reviews are not only about praise and goal setting. Oftentimes, they involve difficult conversations. When you have to give criticism, make sure it’s always constructive. The goal is not to place blame or fault but to problem-solve and adjust actions accordingly. Ensure you focus on behaviors and outcomes, not personal faults or shortcomings. Focus on the stop, start, and continue. This will give your team members a clear direction for adjusting their behavior in the future. Make sure to explain the reason behind your call to action so that they can understand where the guidance is coming from and what you’re trying to achieve.
7. Take notes
Another important tip for successful employee performance reviews is to take notes about the different agenda points you discuss in the meeting. This will help you prepare for future reviews and track your team members’ progress. It will also help you keep track of any goals you set with your team members, as well as keep track of any ideas that come to you. Make the notes as detailed as you can so that you have as much information as possible to work with in the future.
8. Be an active listener
Performance reviews are a great way to learn more about your team members and how they help meet company goals. Let your team member self-evaluate and talk about their achievements as well as ways in which they can improve. Ask them if they are getting the support they need to meet their goals and deadlines. It’s also important to ask what their long-term goals are within the company. But, be open to hearing feedback yourself. Ask if they have any constructive criticism for you or the company. Performance reviews should be a two-way street with the goal of improving the overall morale and productivity of your company.
9. Be specific and transparent
There’s no need to beat around the bush. Be direct with your team members. Avoid vague phrases such as, “You need to show more initiative” or “You need to be a team player.” Give specific examples and clear directions. Make your expectations for future performance clear by using measurement-oriented language and listing specific actions.
10. End with agreed-upon next steps
At the end of your performance review, wrap up your meeting by reviewing your notes and defining future goals. This is the time to take the feedback and use it to formulate specific goals. In order for your performance review to bear fruit, it’s vital to formulate an action plan your team members can follow going forward.
The best employee performance reviews result from consistent feedback and collaboration year-round. Your team should feel supported and listened to, so be sure you’re also open to a review. With these performance review tips, your review discussions will be a natural extension and summary of the guidance they constantly receive instead of an anxiety-inducing meeting they dread.
Related: How to Invest in Employee Development
What Not to Do During Employee Reviews
Focus only on the positive or negative
Performance reviews should be well-rounded to be most effective. Celebrate employees’ wins and provide feedback on their losses. It can be helpful to use what’s sometimes called the “sandwich” approach–you deliver a piece of positive feedback, followed by a critical one, and end with another positive note, effectively sandwiching the negative feedback in between two more palatable pieces of information.
Use the same review style for all employees
In a small business, annual performance reviews might be perfectly appropriate for all 10 or 20 team members. As the organization grows, though, it will likely make sense to change your review style by department. Development teams, which often work in sprints, could benefit from project-based reviews. For sales teams, which are very focused on metrics, quarterly or semi-annual reviews might be more useful.
Make broad, generic statements
All of the feedback you give during reviews should be actionable. Generalizing “you seem unmotivated lately” doesn’t tell the employee specifically what behaviors are problematic to you, nor does it give them anything concrete to work on. Instead, focus on specifics, like “You’re regularly showing up 20 to 30 minutes late” or “You used to be very active during our brainstorming sessions, and lately, you’ve been staying silent.” This tells them in no uncertain terms where they should focus their attention to improve.
Compare employees to one another
Of course, some employees will be stronger than others, especially in specific areas. However, there’s no faster way to build resentment and kill morale than to tell an employee, “Take a look at how Carl does his reports” or “Linda is incredibly focused–that’s what I’d like to see from you.” Instead of comparing employees to one another, rate them against a standard, objective scale.
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What to Do After Employee Performance Reviews
Send a follow-up email
Directly after your face-to-face conversation with an employee, follow up via email with a written summary. Detail what you discussed, your specific expectations for the next X number of months, and the action items the employee should complete to get there. This gives employees something to refer back to as they work toward goals and creates an important paper trail for the company to have on record.
Provide support and motivation
Don’t just give employees feedback and send them on their merry way. It’s essential to provide the resources they need to accomplish the goals you’ve set. Offer training, development opportunities, recognition, and rewards to motivate employees and facilitate meaningful progress.
Maintain an open line of communication
Though formal reviews may occur only a few times a year, they shouldn’t be the only time you give employees guidance. Keep the conversation going year-round to assess progress and get an early alert of any challenges that are causing roadblocks.
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