What are performance reviews and how can they benefit your company?
Performance reviews are integral to optimizing the performance of your business. By keeping employees accountable to their KPI’s, recognising their hard work and encouraging improvement through potential promotions or career goal opportunities, they will improve and so will your business.
Accountability mechanisms like performance reviews also play a role in improving the culture of your business through facilitating conversation and ensuring employees feel valued. Review conversations (and follow ups) are also a time to delve into the employees career aspirations, and how you can help them achieve this. By ensuring these conversations are happening throughout the employee hierarchy you are improving the status and value felt by all employees – a key driver of productivity and loyalty.
So, let’s get into the types of performance reviews, and their integral elements…
Types of performance reviews
Performance reviews include self evaluation, peer evaluation and management evaluation. They also differ depending on the time of year. Where January may be focussed on goals and KPI’s for the year, December will be reviewing these, and any meetings in between acting as progress check ins. For all reviews it is important that both the employee and employer are well prepared with knowledge of KPI’s with examples of both successes and areas for improvement in hitting these.
Before the review, it may be a good idea to conduct an anonymous peer survey on the employees performance, as well as asking the employee to conduct a self evaluation. That way during your review, you can reference not only their performance from a management perspective, but also integrate self evaluation and peer feedback. This integrated method is useful for ensuring all feedback and suggestions are thoughtful, well established and constructive.
Overall, performance reviews differ based on time of year, and type of feedback. Emphasising goals and KPI’s is year round, however, providing feedback will probably occur later in the year and should include management, peer and self evaluation.
Integral elements of a performance review
Here, we are focussing on the ‘end of year’ style review, assessing performance with KPI’s and goals. These types of review require planning, honest conversation, evidence/examples and a comfortable setting. Some integral elements are:
Both you and the employee should be planning prior to your meeting. This should include reviewing numbers/analytics that demonstrate success or areas of improvement. As stated above, planning may also include asking peers to anonymously review the employee and asking the employee to conduct a self evaluation prior to the meeting.
The beginning of the meeting may begin with asking the employee to share their self-evaluation. This should include identifying strengths and weaknesses throughout the year with examples. It may also include identifying any hindrances on performance, moments of leadership, team work, coherence with the company values and moments they believe they have exceeded expectations.
Your (managements) review
Following the employees self review, the first step is to identify areas of excellence and improvement from a management perspective. Most significantly, assessing their performance against KPI’s. You may also touch on more nuanced areas, such as their:
- ability to adapt to uncertain circumstances/problem solve,
- aspirations at the company,
- role as a leader,
- contribution to the workplace culture,
- communication skills,
- contribution to innovation, and,
- ability to respond to uncertain circumstances/problem solve.
What to do after performance reviews
Well… start the cycle again. Ensure you set a time for the next check in meeting. This shows your employee you are serious about helping them approve/achieve their goals. It also means your employee is kept closely accountable to their areas for improvement.
The life cycle of performance reviews should look something like this:
- Set goals/KPI’s.
- Allow time for performance.
- Review goals/KPI’s through check ins. Provide feedback.
- Allow time to see feedback affect performance.
- Review through check in… set new goals/KPI’s.
- And repeat…
This advice is not exhaustive, but may be useful in guiding you through your reviews. Due to the stressful nature of these reviews, it is also relevant to consider timing, setting, and your language style. Ensuring they are conducted at the time when the employee has the bandwidth to engage in meaningful planning and discussion in key. A relaxed environment allows for a more honest and approachable conversation. Balanced feedback with productive suggestions is more useful than only identifying weak points. This may also include asking for their opinion on certain matters, or suggestions for improvement. Your sincere interest in the employees opinions, improvement and aspirations is not only key to their growth, but also the success of the business.
If you need more guidance, or have specific legal concerns in addressing certain employees or subject matters in performance reviews, please speak to one of our lawyers here.