This guide will help you learn the necessary steps to successfully give a proper employee performance review.
We will take you through the fundamentals of performance management: what, why, and how.
Furthermore, we’ll outline proven steps you can take right away to improve your employee performance review process.
Let’s get started:
What Is an Employee Performance Review?
An employee performance review is a two-way, individualized conversation between a manager and an employee focusing on the employee’s performance, development, and growth within a specific period.
Depending on the company’s preference, you may conduct these reviews biannually, quarterly, or monthly. Additionally, you can give performance reviews face-to-face, in written form, or both.
Here’s the Study.com Definition:
“A performance review, also known as a performance appraisal, is a tool to measure and assess employee efficiency and effectiveness. Managers can use performance as a rational and objective basis to determine whether further training is required, a wage or salary increase is warranted, or an employee should be promoted to a higher-level position.”
Traditional Vs. Modern Performance Review
Ideally, performance reviews are helpful for both the employees and managers. But most of the organizations run them traditionally, and this breeds disengagement more than anything else.
According to Gartner, The two main concerns with traditional performance reviews are (1) effort is too high (time-consuming, complex), and (2) the output is too low (inaccurate, unmotivating)
Thus you need to let go of old practices in the review process and adopt modern ones. But this begs the question: what’s the difference between traditional and modern performance reviews?
Here’s a comparison table:
|Traditional Performance Review||Modern Performance Review|
|One-way conversations||Two-way conversations|
|Held annually||Held quarterly or bi-annually|
|Review past performance||Reflect on the past but focus on the future|
|Tightly linked to pay||Linked to growth and development|
|Closed-door policy||Open door policy|
|No transparency||Transparent and collaborative|
|Result in rating and no-followup||Close with next steps and regular follow-up|
Elements of Effective Employee Performance Review
Employee performance reviews give the employees and the managers a chance to discuss how they are working and how they can progress together. Here are some key elements of effective performance reviews:
Conduct quarterly or monthly performance reviews, paired with notes, progress, and next steps. This helps managers and employees to stay on the same page regarding performance, progress, and goals.
Managers and employees should equally participate in the reviews and conversations. Here are some topics they can address:
(i) engagement challenges
(ii) career growth,
(iii) challenges in achieving goals,
(v) peer feedback,
(vi) customer feedback, etc.
Your performance reviews should focus on future goals. Of course, it’s good to talk about past performance, but it is more important to work on the goals aligning to the organization’s future progress.
Involve employees in the process and make the process more transparent. You must create a clear, shared, and collaborative agenda with all the important discussion points—there shouldn’t be any surprises.
No more subjective opinions. Your statements should be fueled by data from various sources such as recent recognitions, peer feedback, one-on-one notes, goal progress, and more.
Why Employee Performance Review Is Important
So why are employee performance reviews important?
Because they have a big impact on the success of your employees, teams, and your organization as a whole. Performance conversations play a crucial part in employee engagement and retention. Let’s see how:
Impact on employee success
An open, honest, and regular performance review helps build trust among your employees, the organization, and you. Employees deserve to know where they stand in terms of their performance. Moreover, you can boost employee motivation by helping them identify their requirements and challenges.
- Organizations with continuous performance processes are 39% better at attracting top talent and 44% better at retaining talent. (Source)
- Four out of 10 workers are actively disengaged when they didn’t get performance reviews. (Source)
- 68% of employees who receive accurate and consistent feedback feel fulfilled in their jobs. (Source)
Impact on team success
Performance reviews and conversations help you as a manager evaluate team performance and give them a clear picture of each member’s performance.
You will get to know your team’s strengths, weaknesses, where they need guidance, how to set goals, and the team’s potential to achieve larger goals.
- Teams led by managers who focus on their weaknesses are 26% less likely to be engaged. (Source)
- Gallup found teams who received strength feedback had turnover rates that were 14.9% lower than for employees who received no feedback. (Source)
Impact company success
The companies won’t face any challenges achieving their goals and objectives if employees are aligned and towards a clear path to their own success.
Effective employee performance reviews allow employees to connect with the company values and goals. The company also gets the data they need to make important decisions related to compensation, promotions, employee development, exits, and more.
- Companies with continuous performance management outperform traditional ones by increased productivity (66%), motivating the entire workforce (65%), achieving top goals of the organization (64%) – Source
- Nearly two-thirds of HR professionals rate their organization as having a supportive feedback environment with an average rating of 6.1 out of a 1-10 scale. (Source)
10 Key Tips to Give a Proper Employee Performance Review
Keep up-to-date information about each employee’s position
Analyze every employee’s position and compare their performance to what the company requires out of that role. While writing a performance review, bring data from:
- Engagement survey responses
- Notes from 1-on-1 meetings
- Past recognitions
- Talent review ratings
- Previous performance conversations
- Hiring documents
Create notes of employee progress and goals
Create a performance document or notes for each employee. Keep records of their notable accomplishments, productivity, or performances, both positive and negative.
You can also ask employees to go for a self-evaluation first, outlining their tasks and achievements they made in that period. This can be helpful in comparing your notes during the review.
Align on expectations for your employees
When employees face challenges in achieving their goals or objectives, performance review meetings can help determine how they can improve. Here are a few tips for aligning expectations with your organization’s established performance criteria:
- An employee should review the agenda, add topics they’d like to cover, and know the time and location the meeting will take place.
- Let the employee know things needed to be kept prepared for and information that might be referenced in the discussion.
- An employee should have a clear idea of their responsibilities after the meeting and action plan.
Use clear, actionable phrases and sentences
When reviewing an employee’s performance, try to use words and phrases that motivate the employee. Here are a few tips for choosing effective phrases:
- Use clear and specific language
- Use actionable words
- Speak in a constructive and positive manner
- Use problem-solving language
- Focus on opportunities for growth
- Focus on the individual and avoid bias
- Recognize them for good performance.
Collate feedback from other managers and peers
Involve input and 360-degree feedback from other managers or colleagues. This practice ensures an unbiased picture of the employee’s overall performance, rather than just your observations and opinions.
Ask the right questions
Ask correct performance review questions to focus on the important topics for your employees and the organization’s growth. Here are a few good questions you can ask the employees to spark conversation and receive valuable feedback:
- What achievement(s) from the last quarter are you the most proud of?
- What are your goals for the next quarter?
- What resources/ support do you need from the department to reach your goals?
- What obstacles are standing in your way?
- What new skills would you like to develop this year? Is there any training which you want from the company to learn it?
- How can I improve as a manager?
Give employees constructive feedback
Everyone prefers positive feedback. Who doesn’t like to be complimented, right? Thus you need to make sure you regularly recognize your employees’ contributions to the organization and make improvement an ongoing process. Constructive feedback helps employees feel more valued and recognized throughout the year.
Make time and space for performance review
Here are a few elements to consider when making time and space for your performance review:
- Will your performance review meeting take place inside or outside?
- Will it be a closed- or an open-door meeting?
- Will other people be allowed to see your meeting in action?
- How much time are you allotting to the conversations? Thirty minutes or 1 hour?
- Is this a good time for you and your employee?
- What distractions can be present during the meeting?
- Are you sitting in big, comfy recliners or traditional chairs? Or are you standing?
Be an active listener
Employee performance review meetings should be two-way. Listening to your employees first helps you learn and understand their situations and ideas. Then, you can ask some follow-up questions to dig deeper and visualize a clear picture.
Use emotional intelligence to tap into your employees’ and your emotions. Show empathy and seek to understand how the other person might be feeling.
Wrap up the conversation with the next step
After the meeting, you, along with your employees, should review notes, decide the next steps, and follow up with shared feedback. If you want your review process to actually improve performance, creating an action plan is important.
Recommended Post: A Manager’s Guide to Improve Communication Skills at Work
How to Handle an Employee With Poor Performance
Let’s go through 5 proven ways to handle an employee with poor performance effectively:
Talk to the employee
One of the first steps that you should take is talking to the employee. Do not take stern action and review them on paper without understanding their perspective.
Try to understand any issues they might be facing and if your support can help them get back on track. Then, try to find a solution and make the employee feel valued.
Give appropriate training
Training is an essential aspect of work. Sometimes employees lag in achieving targets simply because they are not trained well. For example, they might not know how to use a tool in your organization. If that’s the case, try to hold training sessions for your employees to benefit from the knowledge and pace up their work accordingly.
Make a clear plan and goals
Define the plans and goals for your employees clearly. It can be followed by a one-on-one meeting with the employee and help them understand their duties, daily tasks, and what does and doesn’t lie in their work periphery.
As a manager, you must inform them how their performance will be evaluated and the key metrics they should focus on for their growth.
Similarly, have a discussion with the team so that everyone knows about each others’ roles and responsibilities. This way, they can reach out to the right person for a particular task.
Regularly monitor the progress
Regular monitoring of progress helps identify any issues with your employees’ performance at an early stage. Similarly, if the employee is working remotely, keeping a check on the performance is good for the organization. It helps the employee feel connected to the workplace and stay on track of work.
Praise and reward positive changes
As crucial it is to highlight if somebody is underperforming, it is equally important to praise and reward positive change in them. If you find someone performing well, acknowledge the positive change to motivate them and make them feel valued.
It helps your employees feel good about their work, and it also pushes them to shatter further glass ceilings.
BONUS: Effective Employee Performance Review Checklist
This quick checklist is the jumping-off point for preparing, executing, and evaluating your performance conversations.
Step 1: Before conducting a performance review
- Select the right setting: The vibe of your meeting is influenced by the location. So think about the message a particular setting will send when choosing.
- Establish a regular meeting time: Schedule the meeting at least a week before to give your employees time to prepare.
- Set clear expectations: Make it crystal clear what will be covered so that the employees avoid anxious wondering.
- Create an agenda: Outlining your plan for the meeting makes it easier for you and your employees to come prepared.
- Prepare and share your notes: Getting on the same page about an employee’s performance before your meeting will lead to a more transparent and constructive conversation.
- Gather data: Come to the meeting prepared by collecting background information about goal progress and feedback from coworkers.
Step 2: During the review
Lead with positivity: When you lead with positivity, employees will feel relaxed and more comfortable during the review.
Start with an ice breaker: Kick off the meeting by asking some fun questions to lighten the atmosphere.
Be a good coach: Approach the review as a two-way conversation. Encourage employees to ask questions in return to show your support.
Avoid distractions: Devote your attention to the meeting at hand so employees know you value their time.
Schedule the next conversation: End your meeting with the next steps for your employee to work on.
Step 3: After the review
Document agreed-upon next steps: Ask employees to share feedback based on their takeaways from the meeting. Document the conversation to use as a reference for your next conversation.
Track individual goals: Regularly review goal progress to determine what’s going well or where employees need help.
Leave the door open: Let your employees know that you’re still there to help them succeed even though the meeting is over.
Employee Performance Review FAQs
Here are some objectives of performance management:
– Focus on future performance through clarity around performance expectations, goals, and behaviors.
– Focus on employee’s strengths and opportunities for growth.
– Encourage open and ongoing dialogue between you and your employees.
Depending on the company’s preference, you may conduct these reviews, biannually, quarterly or monthly.
– Keeping notes on accomplishments, feedback, training, and issues throughout the review period.
– Completing a self-evaluative summary form to reflect on the prior year’s work.
– Preparing discussion points for the review.