Good performance reviews work. What’s more, they can help businesses of all sizes achieve results.
You might have read any number of articles celebrating the “death of the performance review”. In my observation, these articles relate to performance review processes favoured by many large organisations that have encumbered them with too much bureaucracy and rigidity.
Inflexible rules and deadlines, forced distribution curves, and crazy paperwork requirements have piled up to result in the corporate murder of the poor, old performance review.
But I’ll say it again: good performance reviews work!
Done well, they are an effective way to track your employees' progress, provide vital feedback, support their development, and align each person's performance with your company goals, which helps the business achieve results.
Speaking from much experience (good and bad), here are some tips for New Zealand businesses to get the most out of performance reviews and avoid common mistakes.
1. Deliver to the right people
Positions that have a genuine opportunity to deliver over-and-above results for the betterment of the organisation and the individual should have performance reviews.
Positions characterised by routine work patterns that rarely change do not need formal reviews; performance management in these roles happens daily.
2. Focus on the conversation, not the forms
Good performance reviews are conversations, not forms.
While documentation provides a basic way to articulate expectations, track performance, and measure results, it should never replace actual dialogue with your people.
3. Keep it simple
Long and complicated forms with massively complex matrices and measures detract from the real conversation and encourage a focus on filling out forms. To simplify, try this structure:
Objectives
- What you need to do to be successful.
- No more than 5.
- Only that are over and above the core role, nothing about “turning up on time”.
- These are “hard” measures, easy to articulate and measure.
Skills
- What skills you need to achieve the objectives.
- These are the softer measures that can sometimes be harder to rate.
- Linking them to the objectives makes them easier to measure.
Development plan
- Development activities you and the employee will complete.
- The activities will help improve skills, which will help achieve the objectives.
- And help with career development.
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4. Get the review cycle right
This might be different for different roles within the organisation. While most organisations will want to align the full review to an annual cycle, you should schedule regular check-ins throughout the year.
Remember to make sure the check-ins happen at meaningful times.
5. Use software
Anybody who uses a paper-based performance review system today has lost their way. It’s the equivalent of writing a cheque to buy your groceries… even Nana doesn’t do it anymore.
The many, many benefits of using performance review software over paper are too great to list… surely this argument is already won?
If you follow the basic steps outlined here, you should notice how your performance reviews start to encourage ongoing and two-way conversations about performance.
They will help you deliver better results, reward good people, and deal with any problems before they get massive.
Learn how MyHR makes performance reviews easy and effective.
Frequently asked questions
Should I get employee input on the design of the performance review?
Yes. Involving your employee in the design stage will make them feel like they have a say in the process, which will increase their buy-in.
They’ll be able to give you a good sense of whether the performance objectives are realistic and achievable, or if you’ve set the bar too high (or low).
However, ultimately, it’s your decision what the objectives are.
How many objectives should I put in a performance review?
We recommend a maximum of 4-6 objectives for each performance period.
More than this makes the process overly complicated and time-consuming, which lessens its effectiveness.
Are performance reviews confidential?
Broadly speaking, yes. The protection of an individual’s information is important, especially for upholding and maintaining the principle of good faith in the employment relationship.
However, it’s common for performance reviews to be discussed and circulated at a management level, because good performance reviews reflect the goals of the whole company, and sharing the results (and development plans) helps ensure clear communication and alignment between teams or divisions.
Get more answers to common questions about performance reviews.
