Performance Reviews Defined

High performance is one of the most tell-tale signs of a successful business. Managing that performance involves a variety of conversations and activities that boost employee satisfaction and productivity. Companies that effectively manage performance can experience benefits such as greater retention rates, increased business results, and more innovation.

An essential component of performance management is the performance review. Employees and managers alike tend to dread this event, but it doesn’t have to be a negative experience. When done right, performance reviews can be meaningful, effective, and motivating experiences that drive performance and success. Discover what a performance review should look like and how you can ensure it benefits your people and your business.

Performance Review 101

An employee performance review is a formal meeting where a manager and employee discuss the employee’s performance throughout the year. These meetings are also known as performance evaluations, performance appraisals, and employee evaluations, since the point is to evaluate an employee’s contributions and potential. Performance reviews are a great opportunity to recognize achievements and address performance issues before they escalate.

Performance Review Goals

The goal of a performance review is to help both managers and employees understand what the employee has done well and what they can do to improve. Managers should use these reviews to encourage and motivate their employees to seek engagement and growth opportunities.

Performance reviews should also accomplish goals such as:

• Creating accountability.
• Clarifying responsibilities.
• Setting future expectations.
• Identifying areas for improvement.
• Reorienting employees on company goals.
• Revealing career development opportunities.

Traditional Annual Review vs. Modern Methods

In the past, managers would conduct performance reviews annually or semiannually and list work performance concerns from the past year. This backward-looking approach would focus on criticism that often outweighed recognition. It lacked actionable insights for future improvement.

This review method often resulted in employees feeling discouraged, managers struggling to keep employees engaged, and businesses failing to improve performance. Since then, many companies have adopted new ways to manage and review performance so they can better empower their people while driving more business success.

Modern performance management methods involve a forward-looking focus that turns performance reviews into productive discussions. During these meetings, managers and employees come together to talk about big-picture goals and how to build on past performance to increase capabilities. Performance reviews become a collaborative effort to recognize accomplishments, set goals, and accurately evaluate performance.

Modern methods also supplement performance reviews with frequent, meaningful conversations. As Sandvik, an engineering group, has discovered, these talks are great opportunities for managers to check in on goals and for employees to seek advice. With frequent nudges to have performance conversations, managers at Sandvik are able to organize touchpoints that foster human connection. Regular one-on-one meetings allow employees and managers to discuss short term-topics, giving them more time to discuss long-term goals during formal performance reviews.

The Importance of Self-Evaluation

Effective performance reviews depend on managers and employees working together to review performance and set goals. Having employees fill out self-evaluation forms about their performance will help balance a manager’s feedback and reveal information that may give insights into their performance. A form may ask employees to:

• Create new goals.
• Reflect on their skill sets.
• Come up with questions.
• Prepare discussion topics.
• Identify areas for improvement.
• Brainstorm examples of their performance.

Performance reviews can be valuable experiences for both managers and employees. As employers and their teams work together to review and improve performance, the rest of the business will benefit and see more success.

Effective performance reviews will enable your business to gain advantages such as:

• Improved performance: This may be one of the most obvious benefits, but it’s also one of the most important. Taking time to evaluate performance will reveal opportunities to improve on an individual and team-wide basis.
• Stronger teams: Quality performance reviews allow you to get to know each team member’s strengths and weaknesses. You can then form groups that balance and motivate each other to work effectively and productively.
• Enhanced communication: Performance reviews give you the opportunity to go beyond numbers and ratings and get to know team members individually. As you create a safe space for open dialogue, you can easily set expectations, and employees can comfortably share their concerns and suggestions.
• Greater career growth: Regular, meaningful performance reviews enable employees to grow in their careers and develop skills that will benefit the business in the long run. Evaluations also give you the opportunity to identify training opportunities that will help employees become more productive contributing team members.
• Increased employee engagement: A performance review is a perfect opportunity to motivate and encourage your workforce. The more support your employees receive, the more they will engage with their work and strive to meet performance goals.
• Clearer direction: These reviews help employees stay on the right track by giving them a clear goal to work toward. As a result, employees can work harder and more efficiently and complete their tasks more confidently.

Performance reviews can bring many benefits to your organization, especially when you supplement them with regular conversations. Connecting with team members frequently turns the performance review into an ongoing process that promotes employee growth and success.

Effective and meaningful performance reviews happen when managers and employees take the time to prepare for their meetings, engage in discussion, reflect on conversation topics, and follow up on goals.

Prepare

Preparation is key to performance reviews. Managers should take the time to prepare the messages they want to convey, while employees should prepare to give and receive feedback.

Employees and managers alike should review discussion topics such as:

• Major accomplishments
• Strengths
• New obstacles
• Areas for improvement
• Specific performance examples
• Previous conversations

Managers should prioritize performance reviews by planning a time and place that will help the employee feel most comfortable. They should also prepare to give accurate feedback by setting aside their personal biases and focusing on the outcomes of the employee’s efforts.

Discuss

Once a date has been set and both parties have prepared, managers and employees can come together to discuss performance. Managers can stay organized during the meeting by following a performance review template that asks questions about topics such as:

• Goal achievements
• Suggested improvement areas
• Demonstration of core values
• Obstacles
• Employee and manager expectations
• Needed tools and resources
• New goals

A performance review is a chance to identify specific accomplishments, obstacles, and goal opportunities. Managers can show employees how they can improve by giving direct and actionable feedback on past performance.

Reflect

Employees and managers should both take notes during their meetings so they can continue to reflect on the discussion throughout the coming weeks. Reviewing notes can reveal ways to improve and offer reminders about commitments and goals set during the meeting.

Reflection will help employees and managers:

• Envision goals.
• Plan steps to improve performance.
• Identify ways to adapt feedback methods.
• Remember essential discussion points.
• Prepare for future conversations.

Follow Up

Accountability is one of the greatest ways to ensure success. Managers can hold employees accountable for goals set during performance reviews by regularly checking in and reviewing progress. Following up also allows managers to recognize employee accomplishments and offer valuable encouragement.

Follow-up conversations can also benefit employees when they have questions or concerns. They provide a time when employees can regularly contact their managers to discuss their goals and any obstacles that arise. These follow-up conversations enable team members to use their managers as valuable resources to boost their performance.

As a manager, it’s your job to ensure performance reviews are productive and valuable conversations. Check out these tips to find ways you can improve your performance management methods.

Focus on Clear Examples

Enhancing performance reviews and improving productivity requires more than simply telling team members to work harder. Bringing up specific past situations and discussing different ways employees could have responded will help your team identify areas of improvement.

For example, let’s say an employee gives a subpar presentation. Instead of vaguely telling them to do better, sit down and review their presentation with them. Point out areas where they could improve, such as planning adequate time to practice or doing more research to develop ideas better. Giving concrete examples of what they can change will help employees feel more confident in making those changes and improving their performance.

Prioritize Your Employee

When you meet with an employee during a performance review, the discussion should revolve entirely around them. Focus on their abilities, goals, and opportunities — not on comparisons between them and other team members. Performance ratings can be valuable metrics, but you should not use them to rank employees and degrade morale in performance reviews.

Performance reviews should be a collaborative effort, so share responsibility by allowing employees to direct parts of the conversation. Your goal should be to create a safe space for team members to share concerns, feedback, and ideas.

Emphasize Honesty and Transparency

A performance review is an opportunity to honestly assess an employee’s progress and improvement opportunities. If they have achieved their goals, give them the praise they deserve. If they urgently need to make changes to improve their efforts, ensure your feedback is clear and direct.

Giving false praise or focusing solely on improvements can lead employees to think they are doing better or worse than they actually are. In addition, offering incomplete or incorrect feedback can prevent employees from learning from mistakes and improving their performance, which can affect multiple areas of your business.

Build on Past Feedback

Employees come to performance reviews wanting to know how they have improved and what more they can do to reach goals and take advantage of opportunities. Take detailed notes during performance reviews and after casual conversations to continually build off past feedback and previous goals.

Avoiding repetitive advice will ensure your performance reviews are effective discussions that promote growth. If you notice that employees have yet to implement your feedback and are still struggling with the same performance issues you’ve already tried to address, you may need to adjust the way you provide feedback and come up with new ideas to get your message across.

Make Performance Reviews a Priority

When you prioritize performance reviews, everyone benefits, including:

• Employees: Employees will notice when their managers care about their success. Consistent reviews will help them achieve goals and focus on improvement, leading to greater career and personal development.
• Managers: Performance reviews give managers insight into their teams and how they can plan for better performance. They also give managers a chance to resolve minor concerns before they escalate into significant problems.
• Business: Your business as a whole will benefit from employees and managers dedicated to improving performance. More productive employees will lead to better business results and more revenue.

Commit to Following Up

A performance review is only as effective as your follow-up efforts are. You can discuss performance for hours, but change will only come when you hold employees accountable and regularly follow up on their goals.

Following up with employees also allows you to address concerns as they arise and provide answers as team members need. Checking in with your employees will show your support and availability and enable your team to move forward confidently, knowing you are there to help them achieve higher performance levels.

Enhance Reviews With Performance Management Software

Performance management software can streamline your processes by improving communication in ways that benefit every person within your organization. When you add software to your operations, you can create a seamless performance management system that promotes success.

With the right performance management software guiding your organization, employees can enjoy:

• An automated employee journey
• A smooth onboarding experience
• Processes that set them up for performance success

Meanwhile, managers can enjoy:

• Simplified integration with daily tools
• Easy performance tracking
• An intuitive interface for performance management

It’s time to move beyond the traditional annual performance review with its backward-looking focus and vague improvement advice. Take your business to new heights through meaningful performance reviews that empower your people to make valuable changes. With clear insights, manager support, and frequent check-in conversations, employees can drastically improve their performance and drive business success.

Want to learn more about how to modernize your performance management process? Check out this blog!