Employee performance reviews: How to improve the process

The mere mention of “employee performance review” can trigger anxiety or discomfort for both managers and employees.
The conventional review approach of summoning individuals for a formal evaluation once or twice a year is a source of stress for all parties. It’s also less efficient than having more frequent reviews in terms of cultivating employee growth and achieving organizational objectives.

In this article, we’ll explore ways to enhance your performance review process, leading to more useful feedback, well-defined goals, and superior outcomes.

What is a Performance Review?

A manager and an employee engage in a personalized, two-way conversation during a performance review, discussing performance impact, development, and growth. It plays a crucial role in the overall performance management strategy of an organization.

Historically, performance reviews took place annually and concentrated on assessing past performance. Contemporary performance reviews, however, should be conducted on a quarterly or monthly basis, emphasizing the enhancement of future performance.

Here’s a guide on how to carry out an efficient employee performance review

To ensure that you conduct outstanding performance reviews, it is advisable to integrate these six best practices.

Provide regular, informal feedback to employees.

Regular, informal feedback is a great way to keep employees informed about their progress, but it’s also important to conduct formal performance reviews on a regular basis. Performance reviews provide a more structured opportunity to discuss an employee’s performance, set goals, and identify areas for improvement.

Here are some tips for conducting effective performance reviews:

Prepare in advance: Take the time to review the employee’s job description, performance goals, and any previous feedback or notes you have. This will help you provide specific, objective feedback.
Be specific: Provide specific examples of what the employee did well and where they can improve. Use objective criteria, such as sales numbers, customer satisfaction ratings, or project milestones to support your feedback.
Be honest: Provide honest feedback, both positive and negative. If there are areas where the employee needs to improve, be specific about what they can do to improve.
Encourage two-way communication: Allow the employee to share their own perspective on their performance and any challenges they may be facing. This can help you gain a better understanding of their needs and concerns.
Set clear goals: Set clear goals and expectations for the next review period. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART).
Follow up: Check in with the employee regularly to see how they are progressing towards their goals. This will help you provide additional support and guidance if needed.

Remember, performance reviews should be seen as a constructive tool to help employees improve their performance and develop their skills. By providing regular, informal feedback and conducting formal performance reviews, you can help your employees reach their full potential and achieve their career goals.

Be honest with employees during a performance review.

During performance reviews, it is important to be honest with employees and provide constructive feedback. No employee is perfect, and there is always room for improvement.

To ensure effective feedback delivery, consider the following tips:

Don’t shy away from addressing uncomfortable issues that may be affecting your team.
Be honest with your feedback, but also be tactful in your delivery. Deliver feedback in a way that you would want to receive it.
Clearly communicate your expectations to your employees, and ensure that they are also clear on what they can expect from you. Without clarity on expectations, the feedback provided may not lead to any meaningful improvements.

Conduct face-to-face employee performance reviews.

Face-to-face employee performance reviews remain one of the most effective ways to provide constructive feedback, establish clear expectations, and foster professional growth. While it’s true that technology has made it possible to conduct virtual performance reviews, there’s simply no substitute for in-person interactions.

When conducting face-to-face performance reviews, managers can establish a more personal connection with their employees, making it easier to have honest and open conversations. Employees are also more likely to be engaged and invested in the process when they feel that their feedback is being taken seriously. Additionally, managers can use nonverbal cues, such as body language, to communicate their feedback more effectively.

Another benefit of face-to-face performance reviews is the opportunity to provide immediate feedback. During virtual reviews, there can be a delay in communication due to technological issues, making it difficult to address issues in real-time. Face-to-face reviews allow for immediate feedback and discussion, which can help prevent misunderstandings and ensure that everyone is on the same page.

Finally, conducting face-to-face performance reviews can help establish a positive workplace culture. By demonstrating a commitment to open and honest communication, managers can create an environment where employees feel valued, heard, and supported. This can lead to increased job satisfaction and improved employee retention rates.

Use tangible, pertinent examples during the performance review.

When conducting a performance review, it’s essential to have specific examples that demonstrate an employee’s performance. Using tangible, pertinent examples can help provide context for the employee’s achievements or shortcomings and make the review more productive and actionable.

For instance, suppose an employee has a track record of meeting their targets consistently. In that case, it’s helpful to highlight specific projects or goals they’ve achieved in the past year and how their efforts contributed to the company’s success. This type of example provides tangible evidence of their accomplishments and shows how their work has made a positive impact on the organization.

On the other hand, if an employee is not meeting their performance standards, using specific examples can help them understand where they need to improve. Instead of vague feedback, like “you need to work on your communication skills,” using a specific example such as “in the team meeting last week, when discussing the project status, you interrupted your team members and didn’t listen to their feedback” can help the employee understand precisely where they went wrong and what they need to do to improve.

Using concrete examples during a performance review can also help avoid misunderstandings or misinterpretations. For instance, suppose an employee is under the impression that they’ve been meeting all their targets, but the manager has a different perspective. In that case, using specific examples can help clarify the situation and provide an objective assessment of their performance.

Overall, using tangible, pertinent examples is a crucial component of conducting an effective performance review. By providing specific examples that demonstrate an employee’s performance, managers can offer more meaningful feedback and help employees understand how they can improve their performance.

End the performance review on a positive note.

Ending the performance review on a positive note is just as important as the rest of the review. It helps to ensure that the employee leaves the review feeling motivated and confident in their abilities.

Here are some tips for ending the performance review on a positive note:

Recap achievements: Summarize the employee’s achievements over the past year, and remind them of how their hard work and dedication has contributed to the success of the company.
Offer positive feedback: Take a moment to offer positive feedback and praise. Highlight specific examples of where the employee has excelled and what they have done well. This can help to reinforce positive behavior and encourage the employee to continue performing at a high level.
Discuss future goals: End the review by discussing the employee’s future goals and development. This will give them something to strive for and work towards in the upcoming year.
Thank the employee: End the review by thanking the employee for their hard work and contributions to the company. This will help to reinforce a positive company culture and encourage employee loyalty.

Remember, the goal of a performance review is to help the employee improve and grow in their role. Ending the review on a positive note can help to reinforce positive behavior, boost morale, and motivate the employee to continue working hard.

Choose your words with care during evaluations.

It’s essential to carefully consider how you phrase your evaluations. Utilizing meaningful and action-oriented language can have a far greater impact than generic phrases like “good” or “satisfactory” when it comes to effective leadership.

To effectively highlight an employee’s contributions, consider incorporating these five words and phrases from James E. Neal’s book Effective Phrases for Performance Appraisals:

Achievement: Incorporate this word into a phrase, such as “achieves optimal levels of performance.”
Communication skills: Phrases like “effectively communicates expectations” or “excels in facilitating group discussions” can be powerful in motivating employees.
Creativity: Acknowledging and appreciating an employee’s creative side can lead to a more motivated and satisfied team. Try using phrases like “seeks creative alternatives,” followed by specific examples and results.
Improvement: Recognizing an employee’s improvement and growth is important for boosting morale. Consider using phrases like “continues to grow and improve” and “is continuously planning for improvement” in a performance review.
Management ability: Strong leadership skills and the ability to manage others are crucial for employee success. Using phrases such as “provides support during periods of organizational change” can demonstrate your appreciation for your employee’s management abilities.

The importance of employee performance reviews

Employee performance reviews are a crucial aspect of managing a successful team. These reviews provide an opportunity for managers to evaluate an employee’s job performance, identify areas where they excel, and identify areas where improvement is needed.

Performance reviews also provide employees with feedback on their work and help them understand how their efforts contribute to the company’s overall success. This feedback is essential for employees to develop their skills and work towards their career goals.

In addition, performance reviews can help identify training and development opportunities for employees. By understanding their strengths and weaknesses, managers can create personalized development plans that enable employees to improve their skills and become more valuable to the company.

Performance reviews can also help managers identify high-performing employees who may be ready for promotions or new responsibilities. These reviews provide valuable information that can inform decisions about employee compensation and career advancement.

Overall, performance reviews are an essential tool for managing and developing a successful team. By providing constructive feedback, identifying development opportunities, and recognizing high-performing employees, managers can create a culture of continuous improvement and drive their organization’s success.

What skills and competencies should a review assess?

When conducting a performance review, there are several skills and competencies that managers should assess to effectively evaluate an employee’s job performance.

Here are some examples:

Job-specific skills: These are the skills required to perform the employee’s job effectively. They can include technical skills, such as programming or design skills, as well as soft skills, such as communication and teamwork.
Goal achievement: Managers should evaluate an employee’s ability to set and achieve goals that align with the company’s objectives. This includes assessing an employee’s ability to prioritize tasks, manage their time effectively, and meet deadlines.
Adaptability: In today’s fast-paced business environment, employees must be able to adapt to changing circumstances and work effectively under pressure. Managers should assess an employee’s ability to handle change and demonstrate flexibility in their approach to work.
Problem-solving: Employees who can identify and solve problems are highly valued in the workplace. Managers should evaluate an employee’s ability to think critically and develop creative solutions to challenges.
Leadership and teamwork: Collaboration and leadership are essential for team success. Managers should assess an employee’s ability to work well with others, contribute to team goals, and demonstrate leadership potential.
Professional development: Employees who are committed to ongoing learning and development are highly valued. Managers should evaluate an employee’s willingness to learn new skills, take on new challenges, and seek out opportunities for growth.

By assessing these skills and competencies during performance reviews, managers can gain valuable insights into an employee’s strengths and weaknesses, identify development opportunities, and provide constructive feedback to help employees achieve their full potential.

How to measure the employee’s performance

Measuring employee performance is a crucial aspect of conducting a performance review.

Here are some common methods that managers use to measure employee performance:

Objective measures: These are specific, quantifiable metrics that relate directly to an employee’s job performance. Examples might include sales numbers, customer satisfaction ratings, or production targets.
Self-evaluations: Employees can provide feedback on their own performance, which can help managers gain insight into their perspective on their strengths and weaknesses.
Peer evaluations: Colleagues who work closely with the employee can provide feedback on their performance, which can help identify areas for improvement.
Manager evaluations: The employee’s direct manager can provide feedback on their performance based on their observations, feedback from colleagues, and objective measures.
360-degree evaluations: This approach involves collecting feedback from a variety of sources, including the employee, their manager, peers, and even customers or clients. This comprehensive approach can provide a more complete picture of an employee’s strengths and weaknesses.

When measuring employee performance, it’s important to use a combination of methods to ensure a balanced and accurate evaluation.

Additionally, managers should ensure that their performance metrics are aligned with the company’s goals and values and that their evaluation methods are fair, consistent, and objective.

By using a systematic approach to measuring employee performance, managers can help their employees grow and develop while driving their organization’s success.