Performance reviews can be powerful catalysts for employee improvement. Unfortunately, the mark is often missed when using traditional review processes, leading to ineffective meetings and causing unnecessary stress for both managers and employees.
Still, employees appreciate genuine feedback and want to hear about their performance from their managers. In fact, 65% of employees desire more feedback than they currently receive. When executed with care and precision, performance evaluations offer employees valuable insights and a pathway to grow in their roles.
In other words, effective performance evaluations are a conduit for fostering continuous growth, open communication, and a more vibrant workplace culture.
What Is A Performance Review
A performance review allows managers and direct reports to have a focused conversation regarding an employee’s performance, impact, and development. The most common form of a performance review is the annual assessment, often characterized by its lengthy nature, as it attempts to encapsulate an entire year’s worth of work. Traditionally, these reviews focus on past performance rather than looking forward to the upcoming year.
In addition to annual reviews, there are several other review intervals, each serving distinct purposes, including:
- Quarterly performance reviews are valuable for setting substantial objectives such as sales targets and business growth. A three-month timeframe typically allows sufficient time for achieving these goals.
- Monthly performance reviews are particularly beneficial for businesses that engage short-term contractors and consistently onboard new hires. They help ensure alignment with the company's requirements and expectations.
- Weekly or biweekly performance reviews serve as practical tools for record-keeping and project management, aiding in maintaining project timelines and progress tracking.
Performance Review Pitfalls
More often than not, employers use performance reviews to assess promotions and salary increases. However, a growing body of evidence suggests linking monetary rewards to these reviews may have unintended negative consequences. Specifically, this approach may lead to employees focusing solely on their own productivity rather than their connection to the company's broader mission. Over time, this can contribute to employee disengagement, a concern particularly relevant to business owners aiming to maintain a motivated and committed workforce. Other common mistakes include:
- One-sided conversations: When feedback is given unilaterally without encouraging constructive dialogue between managers and employees, this often leads to disengaged and frustrated employees and hinders the effectiveness of reviews.
- Top-of-mind feedback: This is when reviews rely on immediate, subjective impressions rather than comprehensive and well-considered assessments.
- Time constraints: Another common issue is when busy managers conduct rushed reviews, neglecting to dedicate adequate time and attention to each review.
- Unrealistic goals or expectations: The goals and objectives used to evaluate employees must adhere to the SMART criteria (specific, measurable, achievable, relevant, and time-bound). Unrealistic high-performance standards can result in employees feeling frustrated and dissatisfied.
- Surprises: Springing reviews or providing unexpected feedback or criticisms on employees during reviews can be disheartening and counterproductive to building a motivated workforce.
Five Tips For Successful Performance Reviews
To mitigate these common pitfalls, you need to be clear about the purpose of your performance evaluations. The primary aim should be to foster growth and development in employees, providing them with the vital feedback they need to excel in their roles. By reframing the purpose of these evaluations, you can ensure that managers and employees approach them with a positive mindset, viewing them as opportunities for improvement rather than mere assessments. Additionally, you can help create positive reviews through:
1. Preparing yourself and your employees
Each review should be carefully prepared by you and your leadership team. Take the time to reflect on your employee’s work, write down your feedback, and use it to guide your conversation. Gather examples, review goals and progress, and ask your employees to do the same. This way, you can ensure the meeting stays relevant, and you address all the critical points.
2. Structuring the review
Just as you wouldn't attend a board meeting without an agenda, doing the same for a performance review is essential. While these reviews can be more relaxed, having a loose structure in place ensures that you and your employees can share your prepared thoughts and feedback effectively.
Allow time for open-ended questions, such as "How can I support you in achieving your goals?" and "What do you hope to accomplish by your next review?" These questions foster meaningful conversations, encourage goal setting, and promote a collaborative approach to performance improvement.
3. Focusing on the future
Performance reviews can be stressful, particularly when addressing challenges or recent setbacks. To help alleviate some stress, conclude each review with clear and actionable next steps. This helps limit ambiguity and provides a well-defined path forward for improvement.
In addition, try to end the review on a positive note and convey your support for the employee's success. Make it clear that you're on their side and are committed to their growth and development within the organization. This reassures the employee and fosters a more constructive and motivating review process.
4. Being transparent
Furthermore, the review itself should not contain unexpected revelations or surprises. Avoid withholding negative feedback for the review; instead, make it a point to regularly engage with your employees and share feedback as part of ongoing, open communication. This approach fosters transparency, reduces anxiety, and promotes continuous improvement.
5. Making time
Ensure your managers have dedicated, uninterrupted time for performance reviews, free from distractions caused by other tasks or team members. Additionally, carefully consider the logistics and setting of these reviews:
- Will the review be conducted in an open or closed-door environment?
- Should it be scheduled in the morning or in the afternoon?
- Determine the necessary duration of the review.
- Identify and mitigate potential distractions in advance.
- Choose between a formal or relaxed setting to create the right atmosphere for the discussion.
Performance Review Services
As a business owner, performance management is critical to making training, career development, compensation, transfers, promotions, and termination decisions. It allows you to set clear goals and expectations for each employee and provide feedback about their performance related to those goals.
Professional employer organizations (PEOs) like GMS can help. GMS offers comprehensive review services that can:
- Demystify the approach to implementing performance management for any type or size of organization.
- Recommend the best way to set up an employee appraisal and review process.
- Optimize or change a current review process based on what is and isn’t working with an existing process or method.
- Assess and develop employee performance review forms.
- Review scores and feedback and identify top and bottom performers, leading to conversations regarding promotion, training, discipline, or termination.
- Move an organization to an online, electronic system for maximum efficiency when conducting a review process.
Ready to get started? Contact us today, and let us help your team!