In a business world that is constantly evolving, it is crucial to have an effective and recurring employee performance review process. But conducting a performance review can be quite daunting, especially if you’re not familiar with the best methods.
Employees are the backbone of an organization, and without any performance reviews, they will probably feel unappreciated and will be less likely to contribute positively to a company’s success. That’s why it’s important to conduct performance reviews on a regular basis.
Not sure how to do that? Keep on reading to find out!
What is an Employee Performance Review?
Performance reviews are a way for employers to measure the work an employee has managed to finish in a specific amount of time. This review is typically conducted after six months or one year of working.
Some employee performance reviews can also be conducted weekly, biweekly, monthly, or even bimonthly. These types of reviews can be more beneficial, as they can help both parties become more comfortable with getting feedback.
An employee performance review also serves as a way for management to keep track of how well employees are able to reach certain company goals. Either a hiring manager or a supervisor can organize this review, which typically takes the form of a meeting.
It’s necessary for employees to be evaluated so that they can remain motivated and submit quality work. These evaluations can help not only the employees but the company as well. This is because when high-quality work is delivered, the company will grow as well.
The main benefit that these employee performance reviews can offer is that they provide consistent feedback for the employee. This way, employees can find out what they’re good at and what areas they need to work on.
Why Are Employee Performance Reviews Important?
Employee performance reviews can offer the following benefits:
#1. They Reward Good Performance
The success of your organization solely depends on the performance of your employees. When employees get a detailed understanding of whether what they’re doing is helping the company, they will feel more accomplished.
A motivated employee will work faster and more efficiently, and once that benefits the company, you can pay them back with a certain benefit as well.
#2. They Point Out Development Areas
Performance reviews are a good way to pinpoint aspects of an employee’s performance that need improvement, be they minor or major. This way, an employee can find out how they can improve in any lackluster areas.
Continuing your education, taking classes, or receiving more training offers nothing but improvement, so it’s something that you can bring up during the performance review.
#3. They Ensure Employees Are on the Right Track
An employee performance review can help employers learn more about what the company expects of them. They ensure that employees are on the right track by allowing them to reflect on their progress, set specific goals, and align these goals with the company’s objectives.
Performance reviews provide a structured framework for evaluating employee performance and providing the right feedback. This ensures that employees are on the right track based on whether their work is aligned with the company’s expectations.
#4. They Help Reach Company Targets
Efficient employee performance evaluations can help companies reach their targets easier. In fact, studies have shown that companies that utilize performance reviews are 30% more likely to achieve their financial goals.
This happens because employees get one-on-one talks about what is expected of them and what they need to do to contribute to the company’s objectives. Clarifying this for the employees will make it easier for them to reach the company’s targets and goals.
Types of Performance Reviews
These are the most common types of performance reviews:
- Weekly or biweekly. These evaluations are brief and concise. Their main focus is a specific target or KPI they want to achieve. Instead of focusing on a deep analysis, employers will hand out short feedback to the employee.
- Monthly or bimonthly. This is the most common type of performance review. The monthly evaluation is the perfect middle ground between detailed and general feedback. The employee gets just enough insight into their work performance to improve their current work quality.
- Quarterly. The quarterly performance review is the most convenient type, as it can be aligned with your quarterly budget and goals. Three months is the perfect time for employees to reach certain goals and get timely and relevant feedback.
- Annual. The annual performance review is the least recommended type. That is because you only get to give your employees feedback once a year. This can negatively impact work quality as well as employee motivation. Additionally, the employee will be bombarded with too much information if you let it pile up that long.
What Do Employee Performance Reviews Measure?
Employee performance reviews typically focus on measuring the following employee skills:
- Communication. Communication is key in any and every aspect of life, which certainly includes work. Employers want their employees to communicate their work-related feelings, their goals, and their accomplishments with no trouble.
- Interpersonal. Also referred to as soft skills, employers evaluate their employee’s interpersonal skills, as they want to know how relatable the team is and how well they can listen to guidelines and feedback.
- Technical. Most jobs will require some basic technical skills. Although these can be evaluated during the interview or employee onboarding phase, it’s important to do so during performance reviews as well. This is to make sure that each employee understands how the company’s system or program works.
- Problem-solving. Problem-solving can help identify issues and solutions to these issues. That’s why the performance review will heavily focus on evaluating this skill in an employee.
- Creative. Employers value original ideas and creative solutions, and they want to know whether their employees are capable of coming up with them. They also want to know whether their employees can utilize their creative skills to solve problems.
How Can Employee Performance be Measured?
Here are some ways you can measure employee performance:
The simplest method that you can use to measure an employee’s performance is to use statements. These can also be referred to as employee performance review phrases or employee performance review comments.
After each statement, you can write down never, rarely, sometimes, or always.
These statements can look like something along the lines of:
- “You have consistently shown steadiness to handle extra workload.”
- “You have great communication skills.”
- “You always exceed your targets.”
- “Your performance is stable and consistent.”
- “You understand feedback well.”
- “You are able to prioritize tasks.”
- “You focus on personal development.”
Remember that the language you use while stating this information should be clear and concise. Try to be as respectful as possible and show how you can support the employee to improve.
Scales refer to assigning a numerical value to different aspects of an employee’s performance. This method is a great way to compare the employee’s accomplishments to the company’s targets.
The main things to consider in the scale method are:
- The performance criteria. Criteria refers to the performance areas in which an employee is expected to excel. This can include quality of work, productivity, and customer service.
- The rating scale. Creating a scale helps measure the employee’s performance. This scale can range from 1 to 5, for example, with 1 in this case referring to unsatisfactory and 5 being exceptional.
#3. KPI Indicators
Key Performance Indicators (or KPIs) are specific metrics that are used to measure an employee’s achievements based on their particular role within the company.
KPIs can include:
- Sale targets
- Production targets
- Customer satisfaction
- Reviews and ratings
Since KPIs allow you to set targets and measure an employee’s progress, as an employer, you can help your employees reach their full potential through this method.
How to Conduct a Performance Review
Here are some steps that can help you conduct an employee performance review:
#1. Prepare in Advance
Preparation is key. It can help you anticipate certain outcomes and come up with possible solutions to any issues that might arise.
Before heading over to that performance review meeting, try to go through the following checklist:
- Have you prepared the right material?
- Have you decided on the methods you want to use?
- What verbal feedback are you trying to convey?
- Have you gathered all of the data you need?
#2. Be Positive, But Objective
The important thing is that you convey feedback in a way that doesn’t feel like a threat to the employee. That’s why you should try to find the middle ground between being positive and objective at the same time.
Establish a comfortable setting for both of you and be as specific as possible. While giving feedback, try not to make it personal. Even if you dislike some of your employees for personal reasons, the number one priority is to always do what’s best for the company.
A final employee performance review example can look like this:
“You have been more than helpful in providing a young demographic perspective for our new product line. We really appreciate the efforts you’ve put in.”
#3. Ask Questions
You can opt to ask the employees some questions before giving them any feedback. Try to ask them how they feel about their achievements and what they believe their performance has been like for a specific period of time.
Some good questions you can ask are:
- What accomplishments are you most proud of?
- What goals did you achieve, and what goals were too hard to achieve?
- What has motivated you to finish a task?
- What is something the company can offer to make the working experience easier for you?
#4. Prepare a Development Plan
If some employee review points are not good, prepare a development plan on what the employee can do to make them better.
A development plan can include:
- Career goals
- Development goals
- Personal goals
- Work development needs
- Action plans
- Necessary development changes
Development plans can be quite beneficial as they help employees improve by setting their own goals (provided they align with the company’s goals as well).
#5. Follow Up
After the initial review stage, try to send an email to the employee. Ask them to give you a mini-review in return so that you can establish what went right during the process.
Besides that, sending follow-ups is a great way to let your employees know whether they’ve started to improve or whether they’re going the wrong way. It’s important to help the employees reach a point where they feel comfortable expecting to hear from you.
Employee Performance Review Best Practices
Let’s have a look at some do’s and don’ts while conducting an employee performance review:
Conduct Performance Reviews Frequently
It’s crucial to conduct frequent performance reviews if you want to encourage your employees to reach a certain level of success. A lot can happen for the company during an entire year, and leaving information to build up over time can eventually become too much to handle.
The more information and constructive criticism an employee gets, the more they will feel insecure and unmotivated to continue with the job. That’s why it’s more beneficial to conduct employee performance reviews on a quarterly or monthly basis.
Prepare to Receive Feedback
Every performance review should be handled like a conversation. A conversation can only happen if two or more people participate in it. That’s why you’re likely to hear some words from the employee as well.
The main thing this meeting should offer is comfort. This means no stressful discussions and a safe space to discuss what can and cannot be improved.
That’s why this discussion can include other points, such as:
- Career growth
Make it Face-to-Face
In order to convey positive feedback, ask your employees to meet with you face-to-face. This is a great start, as it can allow space for discussion in case there are any disagreements.
Emails usually get lost in a pile of other emails, and a face-to-face meeting provides the opportunity to share information in a more effective and detailed manner, as well as give enough time to listen and respond at the right moment.
Focus on Future Goals
Although it’s common to think that performance reviews should focus on past accomplishments or mistakes, the truth is that it’s way more beneficial to discuss future goals.
As past actions have already been taken and can’t be changed, focusing on possible future outcomes can be more fruitful. It’s completely fine to give praise when necessary; however, it’s important to let employees know what needs to be done next.
What Not to Say During a Performance Review
Now that we’ve established some of the best practices for employers, if you happen to be on the other end of the review, let’s quickly go over some phrases that should be avoided during a performance review:
- “You told me I was getting a raise.”
Although performance reviews are a great time to discuss your salary, flat-out saying it like this can sound greedy and unprofessional. Instead of this, discuss your accomplishments and what you’ve managed to do for the company so far before mentioning a possible salary raise.
- “I don’t see that written in my job description.”
Although this might be true in some cases, the employer might have asked you to do some additional work to prove yourself a bit better. Read job descriptions thoroughly, as most of them end with “+ any additional work.”
Instead, tell your employer that you weren’t aware of the extra workload and would like to discuss what both parties can do about it.
- “I can’t possibly do that. / I’m not good at doing that.”
Performance reviews are there to help you grow, and saying any of these phrases shows that you’re not interested in advancing in your career. That’s why you should focus on telling the employer that you’re okay with going out of your comfort zone and that you’ll be working hard to grow.
- “But you said… / But you told me…”
Any statements that begin with “but you” put the blame on the other party. Instead of saying “you,” keep the focus on “I.” Show that you’re ready to discuss issues and find common ground.
- “I already knew that. What about …”
This phrase can sound super condescending, so it’s best to avoid it. The employer is trying to give you constructive criticism, and saying this will make you seem arrogant.
Instead, try to discuss why things turned out the way they did and what actions you took to resolve any issues that might have occurred.
Conducting timely employee performance reviews can be beneficial for both the company and the employees. It helps create a secure environment in which accomplishments can be discussed and feedback can be given.
Use our tips and tricks to prepare for the next employee performance review so that you know what to expect and what you can say. Don’t forget that this performance review is there to help both parties grow, so it’s crucial to know what to do and not do during it.