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.
Speaking from much experience (good and bad), here are some tips for Canadian businesses to get the most out of performance reviews and avoid common mistakes.
First things 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 organization 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.
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 organization’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:
OKRs (objectives and key results)
- Quantifiable objectives that allow managers and employees to track progress and measure results:
- Identify high-level OKRs that contribute to business success and align with the role in question.
- Example: increase market share in British Columbia by 20%.
- What the employee needs to do to be successful:
- No more than 5 items.
- Only identify items 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.
Skills
- What skills the person needs 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.
Frequently asked questions about performance reviews
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).
Ultimately, however, it’s your decision what the objectives are.
What to say in a performance review?
Performance reviews are most effective when they work as two-way conversations between the employer or manager and the employee. The trick is covering the formal parts of the review process while leaving plenty of space for discussion and feedback.
If you track performance in real-time (hint: software is your friend here) and check in regularly with the employee, it’s much easier to create an atmosphere where both parties can be open about how things are going, what’s working and what could be improved. There’s also much less chance for surprises come review time.
Should I use AI to generate a performance review?
Artificial intelligence tools provide real opportunities to streamline the performance review process, especially when you are creating the review.
It’s important to be aware that large language models like ChatGPT generate responses from large datasets, so we recommend using AI as a starting point that you then tailor specifically to the needs of the role and your organisation.
Human input is key. MyHR makes designing and executing performance reviews a breeze, with a library of review templates, AI-generated drafts, and an expert team of HR professionals ready to ensure your review structure and implementation are exactly what you need.
How many OKRs should I put in a performance review?
We recommend a maximum of 4-6 objectives for each performance period.
Including more than 6 OKRs 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.
