Employee performance evaluations are much more than a tick-box exercise. They provide many benefits to employees, employers, and the organization as a whole. In addition to covering feedback, performance reviews also touch upon goals and learning and development, and they’re a valuable chance for an employee to get one-on-one time with their manager.
Your duty as a leader is to ensure your employees’ performance reviews are well-prepared and well-executed, and that they contribute to lasting improvement. This article covers everything you need to know about understanding the employee performance evaluation process, with steps on how to execute them effectively.
What is an employee performance review?
Employee performance reviews are a formal stage of an organization’s performance management process. It’s a one-on-one meeting between an employee and their manager, where competency-based feedback is given. Performance reviews also focus on goal-setting, personal development and praise, with the aim of encouraging growth and motivating the employee to achieve more.
Why are employee performance reviews important?
Employee performance reviews are an important part of the employee lifecycle. They bring benefits to both the organization and the employee who is having the review. Here are five reasons why they’re so important:
- Identifying learning and training opportunities: The feedback provided in performance reviews directs employees towards learning and development opportunities. These can be coached in the main review or transferred to a personal development plan.
- Nurturing talent: In a review, employees get a chance to speak about their career objectives, and the meeting also gives managers a chance to assess performance and potential. This helps organizations with talent planning, understanding readiness for promotions, and stepping up in the business.
- Providing feedback: The core part of an employee performance review is to provide feedback, both constructive and positive. Managers should ensure feedback is delivered in a way that motivates the employee.
- Sense-checking progress: Employee performance reviews are a chance for one-on-one time between the employee and their manager, ensuring progress on work and goals is being monitored, accountability is being established, and rapport is maintained.
- Setting goals: Employee performance reviews are an opportunity to set the employee business goals that are aligned with organizational priorities. The review is also a chance to set personal development plan goals to help employees learn new skills.
The elements of a performance review
Great employee performance reviews need to be meaningful meetings that cover a wide variety of topics. Here is a list of the top 10 elements to include in a comprehensive employee performance review:
Accountability
Employees taking responsibility and ownership for their tasks means they can work more independently and to a higher standard.
Adaptability
With change management an increasingly important trait to have in ever-evolving workplaces, performance reviews assess the employees’ adaptability and agility, as well as their attitude toward flexibility in the workplace.
Communication
A wide variety of communication skills are assessed in the employee performance review, such as verbal communication, written communication and listening skills.
Customer focus
This section assesses how employees work with their stakeholders, whether they’re clients, customers or fellow employees in an advisory capacity.
Punctuality
A good attendance record is a basic conduct requirement of working in any organization. This section of the review assesses employees’ lateness record, and might cover absence management too.
Quality of work
This section of the review assesses employees’ attention to detail and the care they place in their work. It will be a chance to review any mistakes and provide support to improve work quality.
Reliability
This section of the review might be combined with punctuality but is more focused on how well the employee keeps to deadlines and essentially the degree to which they can be trusted to work by themselves to complete work.
Teamwork
This section assesses how employees work with other people. It covers stakeholder management, collaboration within teams, and how the employee interacts with people in other areas of the organization.
Technical skills
This section will vary depending on the role. It will assess the employee’s hard skills and how well they technically perform in their job.
Time management
This section of the review assesses employees’ organizational skills, how well they respond to deadlines, and generally how they structure their diary to get the most out of their day.
How to prepare for a performance review
Effective performance reviews need careful planning and preparation. Not doing this, or going into performance reviews “blind”, can mean it goes off topic and is of limited use to both the employee and employer.
Here are five top tips on how to effectively prepare for a performance review:
1. Set clear goals at the start of the year
At the start of the year, you should have a meeting with your employees individually to understand what they would like to achieve and to also set personal goals. For example, if you work in sales, you should set clear targets from the get-go so your employees know what they’re working towards.
This will also set the tone of the appraisal, and it will give you something to base their performance on throughout the year.
2. Provide feedback throughout the year
When an employee enters the appraisal room, there shouldn’t be any surprises, which is why it’s important to provide feedback on their performance throughout the year. You don’t want to pull them up on their behavior towards a colleague three months later! It will only wind them up and lead them to question your managerial skills, as you didn’t say something sooner.
Therefore, if you see an issue before the appraisal, speak to your employee about it, and set a strategy in place to overcome it. This way you can discuss their progress, or lack of progress, during the annual meeting.
3. Have a clear structure
There should be a clear process that managers and employees should follow across departments when it comes to annual appraisals in the workplace.
All managers should have the same template of the evaluation form, and they should hand this out to their staff members to fill at least a few weeks before the scheduled meeting, giving them the same deadline.
Calendar invites should also be sent to all employees, and there should be no changes or pushbacks unless there is a clear emergency that needs to be attended to. This way, everyone knows what to expect and will follow the correct protocol.
4. Get the timing right
Performance reviews should follow a consistent performance management cycle to facilitate the planning process. Using quieter periods, such as off-seasons or the end of the fiscal year, means that more time can be devoted to performance reviews.
As part of this process, give advance notice to the employee of their review, and allocate enough time in your diary to ensure a productive discussion that isn’t rushed.
5. Prepare for the meeting
There’s nothing worse than going into a meeting unprepared. After all, you’re supposed to be leading the review, and you should have a clear structure of points you would like to make.
To ensure you’re fully prepared, you should figure out a development plan based on your notes from the year. You should also review your colleague’s self-evaluation form and incorporate parts on their feedback into your evaluation.
How to conduct a performance review
Great performance reviews don’t happen by accident. They require careful and thoughtful execution by the manager to ensure a positive experience for the employee.
Here are 10 great tips on how to effectively conduct a performance review:
1. Start off on a positive note
Starting off on a positive tone is always a good method. No one wants to be told how useless they are and then sit there for another 30 minutes raging on the inside, failing to listen to anything that you’ve said.
Instead, it’s advisable to begin with a simple question like “How have you got on this year?” or by listing all of the great things they have achieved. If there’s any criticism, save it until later.
2. Turn it into a two-way conversation
An effective performance review requires an open, two-way conversation. You should be constantly asking questions and making statements that seek the employee’s input. You should be able to understand what their thought process is and if they have any concerns.
3. Don’t be confrontational
If there is something negative that you need to discuss, be sure to do so in a constructive manner. You should voice your concerns on a matter, and then find ways to implement improvements.
In other words, don’t start accusing your employee of certain things; instead, ask them how they feel about a specific situation.
4. Discuss work–life balance
It’s important for your workers to have a good work–life balance so they don’t end up feeling burned out later down the line! And what better opportunity than an annual appraisal to discuss it?
It’s a great time to discuss their overall happiness and future development to create a plan for advancement. Even if it’s not for the near future, it’s good to have an end-goal in sight.
5. Only make promises you can keep
There are so many times that I’ve heard of managers overpromising and not delivering, whether it’s a higher salary, a change of job title or better benefits. And do you know how that all ended? With the employee feeling demotivated and searching elsewhere for better opportunities.
The moral of this story is that you should never make promises. Only make announcements when something has been officially approved by your manager.
6. Ask the employee for feedback
As it’s a two-way conversation, you should ask the employee for feedback on management. They may have valid points that you’ve overlooked. You can ask what you have done to help their performance or what they would like you to do going forward.
Be sure to implement any changes necessary to show your employees that their opinion matters, too!
7. Be objective and use examples
Employees value facts over opinions and hearsay in performance reviews. When sharing any kind of feedback, supplement it with examples of what happened, and when. This gives weight to the feedback and decreases the chance of pushback.
When sharing examples, follow up with phrases like “I am beginning to wonder if…” or “Because of this, I feel…” to encourage dialogue based on your observations.
8. Listen actively
Throughout the review, although it might be tempting to fill pauses and space with words and follow-ups, it’s essential that you actively listen to what your employee has to say. This means that you can effectively respond to comments they share and also display genuine care and consideration for their opinions and concerns.
Actively listen by paraphrasing, nodding, maintaining eye contact with the employee, and asking effective questions.
9. Manage the time
Ensure that you respect your employees’ time by not letting a performance review overrun its allocated time. Allow time to review feedback, set goals, and discuss learning and development.
Also, factor in space for interaction, and questions and answers at the end of the review. This ensures everything is covered, and keeping a structure means that time is used effectively and constructively.
10. End on a positive note
Make sure your employee leaves the room feeling motivated and productive. You should summarize your overall evaluation and go over any points that you’re going to work on to improve in the coming year.
Essentially, you should make them feel that they can talk to you when they need some guidance.
What to do after a performance review
As a manager, it’s your duty to sustain and follow up on what was discussed in the performance review. This ensures that the review has a purpose and its outcomes can be evidenced in operational performance.
Here’s what you need to do after a performance review has ended:
1. Let them review your notes
After the evaluation, you should give the employee your copy of the appraisal form so they can read through your notes and, if they agree, sign it. You should encourage them to make a copy so they can revert back to it throughout the year.
2. Give a copy to the HR department
Once the employee has signed the form, you should pass this copy onto the HR department to keep in the employee’s file. This will help the department analyze the data, and they will notice any recurring patterns.
This can help identify any areas that need improving, whether it’s additional training or different management methods.
3. Follow up on any actions that you discussed
If you set out an action plan during the meeting, you need to stick to your promise and follow up with the employee on a weekly or monthly basis to ensure they’re making the necessary progress.
No matter how snowed under you are, it’s important to set in slots in your calendar from after the appraisal to make sure that you stick to your plan. This will show the employee that you’re genuinely interested in helping them grow (which you should be) and it will encourage them to do better.
4. Offer ongoing support
After the review, it’s vital to provide the resources that the employee has requested to help them do their job.
Additionally, offer feedback and encouragement after the review. If you see them acting on the feedback they received or accomplishing a goal, don’t wait until the next review to mention it; offer them praise right then and there.
5. Reflect on the review
Take some time to reflect on how the review went after it’s concluded. Consider if you would have used a different approach in hindsight.
If you feel that certain aspects of the review did not go as well as expected, follow up with the employee as a priority to discuss these areas and understand if any further support or a follow-up meeting is needed.
Key takeaways
Performance reviews are a vital part of the employee lifecycle and have a direct impact on organizational effectiveness, reflecting your skills as a leader. Mastering them takes a lot of work.
Here are the main things to keep in mind:
- Employee performance reviews should be equally focused on feedback, goal setting, and learning and development.
- They should cover a wide variety of competencies relevant to the employee’s role and responsibilities.
- Take time to prepare your employees’ performance reviews, drafting out goals and readying examples of feedback.
- Ensure the performance review is a collaborative, two-way process with plenty of space for the employee to talk.
- Follow up from performance reviews by offering ongoing support to employees and documenting the meeting effectively.
Keeping these tips in mind will ensure that your employees’ performance reviews are motivational, forward focused, and designed to get the best out of your people, contributing to long-term organizational success.
This article is a partial update of an earlier version originally published on August 27, 2018.