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Answers to questions MyHR receives from its members about the performance review process.
Questions covered:
- What is the point of performance reviews?
- What's the difference between a performance review and a performance improvement plan?
- How do we introduce performance reviews to the team?
- Should I get the employee's input to the design of the performance review?
- What are good goals or objectives for a performance review?
- How many objectives should I put in a performance review?
- What is a fair amount of time for the employee to achieve the objectives?
- How do I provide feedback?
- What is a 360-degree performance review?
- How do we agree on a rating - who has the final decision on the score?
- How long is a check-in and how can I conduct this?
- How do I conduct a performance review meeting?
- How do I deliver a poor or negative performance review?
- Are employee performance reviews confidential?
What is the point of performance reviews?
Performance reviews are a vital tool for gauging how employees are performing against personal and business goals and to give them important feedback, guidance, and encouragement so they succeed and keep developing.
They are also an effective way to identify poor performance and implement strategies to address it (e.g. extra training and support) before it becomes entrenched.
Learn more about the importance of performance reviews.
What's the difference between a performance review and a performance improvement plan?
Performance reviews evaluate an employee’s performance against an agreed set of objectives over a set time period, e.g. a financial or calendar year.
A performance improvement plan (PIP) charts a path for improving an employee’s performance, usually because they are struggling to achieve as expected. This is typically shorter than a performance review cycle, because you’re addressing clear, specific concerns with support from management to get them where they need to be.
The length of a PIP should correspond with how long it will reasonably take your employee to show improvement. Most PIPs are between 4 and 12 weeks long.
How do we introduce performance reviews to the team?
Once you have a clear business strategy for the organisation and for the team, sit down with them and explain that you’ll be introducing performance reviews to support their development and to achieve the objectives of the business. This should be a team meeting - it’s good news!
Then meet with your employees individually and explain that you’ll be working with them to design their own personal performance review, so that you’re both on the same page about what they’re responsible for delivering and how it will be measured.
Most managers will come to this conversation with some draft objectives to inform the conversation. Depending on the culture of your business, you could ask your employee to draft and/or prepare their own objectives first, which you’ll review and then agree on with them.
You don’t have to get your employees to agree to the objectives that you set, but it’s a lot easier if you get their buy-in and they understand why their objectives are what they are.
Should I get the employee's input to the design of the performance review?
Yes. Involving your employee in the design stage will make them feel like they have had 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.
What are good goals or objectives for a performance review?
Objectives should be above-and-beyond performance measures such as sales targets or project deliverables rather than the basics of the job, e.g. turning up on time.
Also, remember to make the goals SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
Read our tips for running good performance reviews.
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.
What is a fair amount of time for the employee to achieve the objectives?
The objectives should align with the duration of the review period, which can be any period you choose.
Many reviews take place over a full financial or calendar year, with regular check-ins throughout. Others may be shorter and aligned to the length of a specific project or seasonal period.
The timeframe should be meaningful. If you’re setting a performance review for someone whose job requires them to work on long-term projects, then don’t set the review for 3 months - they won’t have been able to achieve anything in that time.
Likewise, in a retail or hospitality environment, monthly or quarterly reviews could work best because your employees can quickly make changes and achieve sales targets.
How do I provide feedback?
Feedback is an essential part of any performance review, so feedback mechanisms should be built in to whichever review system you use.
We recommend regular check-ins so that timely feedback can be given - this is the best way to reinforce positive action and alter any negative aspects.
Then you should have a final wrap-up session at the end of the review period where you cover all ratings, achievements, and areas to work on.
Be sure to make the feedback process two-way. Open communication is the key to effective performance reviews.
Formal reviews aren’t intended to replace timely, on-the-job feedback about someone’s performance. If your employee nailed a presentation to senior management, tell them that. If they’ve lost their temper and been rude to a colleague, talk to them the day after to explain that their behaviour isn’t acceptable.
What is a 360-degree performance review?
360-degree performance reviews involve a group of colleagues, managers, and customers (typically between 4 and 8) giving feedback on an employee’s performance. The individual will usually do a self-assessment as well.
Proponents of 360-degree feedback say it’s more complete and balanced than feedback from one manager alone and gives a better understanding of how a person’s performance, skills, and behaviour are viewed by others.
The downsides are the complexity of compiling and analysing multiple sets of feedback (read: more administration!) and the need to ensure the review adds value to the performance review system.
How do we agree on a rating - who has the final decision on the score?
Ultimately, this is at your discretion as a manager.
A performance review should contain no surprises for an employee. If they’ve been succeeding, then they’ll know that they’ve hit their targets, and also will have given them positive feedback along the way.
If they’ve been struggling, they’ll know they haven’t hit their targets, and you will have been checking in with them to understand what support and training they might need.
This means your final rating shouldn’t be a surprise, either. If your employee disagrees, hear them out, and make sure that you’re making a fair decision, but you don’t have to get them to agree.
How long is a check-in and how can I conduct this?
Regular check-ins keep you in touch with your people and their progress during the review period.
Set aside time to speak to them privately. Discuss what is going well and what isn’t, what challenges they face, and any assistance the business can provide. Always ask the employee for their input and opinion.
Give yourself enough time to talk about any issues that have come up, and to discuss potential solutions, if needed. A typical check-in is anything from 5-30 minutes. Anything longer means there is probably a bigger issue that needs to be resolved, and should be taken out of the performance review framework and addressed on its own.
How do I conduct a performance review meeting?
You and the employee should each privately evaluate how they’ve performed against the objectives (a good HR system will make this easy). Then have a meeting where you take turns going through each objective and explain why you gave the rating that you did.
If the employee has underscored themselves (i.e. they think they’ve done poorly when they’ve done well), explore this to understand why they think their performance is lower than the reality.
If they’ve scored themselves highly when they haven’t done as well as they think, try to understand why and explain why you’ve rated them lower.
Ultimately, you should both understand where the other person is coming from and even if you don’t agree, the employee understands why they’ve been rated the way they have.
How do I deliver a poor or negative performance review?
As with all difficult news, giving negative feedback in a performance review takes some tact. By the end of the review cycle, the results shouldn’t be a surprise, as you will have been checking in with the employee along the way.
The best outcome is the person recognising the issue(s) and then trying to improve, so giving them a military-style haranguing will probably be counterproductive.
This might be hard if the results of the review are overwhelmingly negative, but try to stay objective and seek to understand, even if you are moving towards stricter performance management or potential disciplinary action.
Learn more about managing poor employee performance.
Are employee performance reviews confidential?
Broadly speaking, yes. Information about an employee's performance, conduct, and training is not covered by the Australian Privacy Principles, so long as the employer only uses it directly in relation to the person's employment.
It is common for performance reviews to be discussed and circulated at the 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 team members or divisions.
For the sake of fairness and clarity in the employment relationship, we recommend you tell employees what personal information the business collects and who you might share that information with, even if you are not required to by law.
