Good performance reviews work. What’s more, they can help businesses of all sizes achieve results.
But reducing performance reviews to a box-ticking exercise, or conducting them without setting appropriate goals, they can feel like a real chore.
We’ve been helping Australasian businesses with performance reviews for over 12 years, so here are some tips to get the most out of your review process and avoid common mistakes.
First thing’s first: the definition of a performance review
A performance review is a formal, structured evaluation of an employee’s work performance and contribution to the organisation over a set period, e.g. 3 or 6 months, 1 year.
The review process involves setting objectives, measuring progress, and meeting to discuss achievement, areas for improvement, and future goals.
There are various ways to structure and conduct a performance review, e.g. a rating/score or a more subjective assessment, but they usually involve input from the employer/manager and the employee.
Why performance reviews matter
In the busy work environment, it can be hard to get an accurate picture of how your people are performing without having some sort of formal appraisal process.
Performance reviews provide a structured way for you and your employees to set goals, accurately track progress against the goals, and reflect on successes and areas for development.
A good performance review system should also provide regular opportunities to give and receive feedback, which encourages initiative and achievement, and assists in identifying and addressing underperformance.
Effective performance reviews have been shown to increase productivity, employee engagement, and staff retention, and to help spot and nurture talented staff.
Read more about the importance of conducting performance reviews.
Top tips for running great performance reviews
1. Do the up-front work to prepare for the performance review
For performance reviews to be most effective, both the business and the employee need to understand the reason for conducting them and get real value from the process.
This requires preparation - both in identifying the critical aspects of a role and how it contributes to the organisation’s goals. From there you can work with individuals on defining clear objectives that align with company direction and employee aspirations, and what metrics you will use to measure success.
You also need to schedule regular check-in conversations that provide a forum for feedback and coaching.
Not every employee needs to go through the same formal performance review cycle. Positions that have a genuine opportunity to deliver over-and-above results for improving the business and helping the person's development should have a detailed review.
Positions that typically have routine work patterns that rarely change may not need formal performance reviews as performance management in these roles happens daily.
2. Keep it simple
Complicated performance reviews with drawn-out objectives and complex matrices create an administrative burden, both for you and your employees. You’ll spend more time filling out forms and less on the real point of conducting reviews: regular performance conversations with your people.
To simplify, try this structure:
Objectives
- What an employee needs to do to be successful in the role.
- We recommend a maximum of 4-6 objectives for each performance period.
- Only those that are over-and-above the core role, e.g. sales targets or project deliverables rather than “turning up to work on time”.
- These are “hard” measures, easy to articulate and measure.
- Objectives should be realistic, time-bound, and achievable.
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.
3. Structure your performance reviews like a conversation
Good performance reviews should focus on conversations, not forms and paperwork.
While documentation provides a basic way to articulate expectations, track performance, and measure results, it should never replace actual dialogue with your people.
At the start of any review period, set regular check-ins so that you can pass on timely feedback that reinforces achievement and identifies areas for improvement. The feedback process should be two-way so the employee can reflect on their efforts and provide insight into any challenges and development goals. Asking open-ended questions that encourage the employee to think about their work performance will help.
The end of the review period should conclude with a final wrap-up session that covers all ratings, achievements, and areas to work on. There shouldn’t be any surprises in the results, as you will have been checking in with the employee along the way.
Delivering negative feedback in a performance review can be difficult, but try to stay objective and seek to understand what is behind the issue(s) and to work with the employee on solutions, whether that is more training or closer performance management using a performance improvement plan (PIP).
4. Get the performance review frequency and cadence right
Different roles in an organisation can benefit from different performance review cycles.
Most businesses tend to align the full review to an annual cycle, but monthly or quarterly assessments may be better for some roles, especially if an employee is new to a position, isn't performing, or the workload or priorities change frequently (e.g. a salesperson).
Regardless of the review cycle, make sure there are meaningful check-ins throughout, and don't wait for scheduled meetings to pass on praise for a job well done or to discuss ways an employee could do better.
5. Use software to streamline performance reviews
Using software with a good performance review feature helps simplify the review process and sharpen focus. The goal here is to reduce the administrative load and make it easier for managers and employees to accurately track and discuss performance.
As well as helping ensure reviews are tailored to the goals of each team member and the business as a whole, an integrated digital platform will provide deeper insight into people's progress.
MyHR’s dedicated performance review module ensures you drive employee success by setting clear performance objectives, accurately recording progress, and enabling meaningful collaboration with employees at every step. Every review is tailored to your business and the role, and if you need any support, our expert HR team is on call to troubleshoot and provide guidance.
Summary: 5 quick steps to leading better performance reviews
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Do the necessary up front work to prepare for the performance review - ensure the employee’s objectives are aligned with the business’s direction and goals, and you have defined clear success metrics.
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Don’t over-complicate it - keep the structure of the performance review simple.
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Focus on having great conversations - ask good questions and encourage the employee to provide their own feedback and insight.
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Nail your performance review cycle and frequency - align the performance review cycle to a frequency that makes sense for your business.
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Use software to streamline the process - Centralising all of your employee’s results over the course of the cycle reduces the administrative burden and allows for easy reference and evaluation when the performance review comes around.
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 performance issues before they get massive. If you’re ready to hardwire employee performance and achievement into your business, book a demo with MyHR and experience the power and simplicity of our integrated platform.
