Performance reviews can be an incredibly powerful tool for your business. They can help you to understand employee mindset, increase motivation, boost engagement, strengthen interpersonal relationships and even improve your chances of meeting your goals as a company. But they can only do that if they’re done well – and you’re possibly not achieving that.
We’re not saying you aren’t good at your job. We’re saying that many managers and their employees in the UK don’t really understand the value a performance review can bring, and how to conduct one to get the best results for themselves and their team. Studies show that nearly 75% of millennials are left unsure about their job performance or how to improve after a review, and 60% believe their managers are unprepared to give constructive feedback during the performance reviews. On top of that, 77% of HR leaders agree that traditional performance reviews are not enough to form an accurate picture of an employee’s day-to-day performance.
So, what needs to change?
What Are Performance Reviews Actually For?
Performance reviews are a chance for managers to give employees feedback on their work, evaluate their performance based on expectations for the role, and open up discussions about future progression. For the employee, it’s a chance to address any concerns, bring up their own ideas and adjust their career progression. When done properly, they help employees to understand:
- What’s expected of them
- What they’re doing well
- How they can improve
- What role their work plays in the overall company’s goals
Performance reviews also give the manager a chance to get to know the employee better, identify both strengths and weaknesses they may have, and send a message that they care about the employee’s performance and development. Performance reviews should generally be a positive experience – a chance to learn and improve on the previous years’ work – and not a disciplinary hearing where managers run through a list of failures. Sadly though, this is often the case, and performance reviews either end up being overly negative, or worse, an utterly useless box-ticking exercise.
4 Things Every Performance Review Needs
If you want to really make the most of every performance review you conduct, then there are 4 things you need to include, which are:
- Employee self-review
- Goal setting
- Performance conversation
- Follow-up plans
To help you understand what each of these stages should look like, let’s examine them more in detail.
Employee Self-Review
It’s always a good idea to ask employees to complete a self-evaluation before their official performance review. This can be a form they fill in, a list of questions they answer or just a free-form exercise. The structure of it isn’t that important, but the process of reviewing their own performance and how they feel they are working is essential. This exercise helps the manager understand how the employee sees themselves, where there are differing views, what areas might need discussing and what the employee themselves is expecting to talk about. This means you as a manager can set clear expectations, steer the conversation effectively and make sure all of the relevant topics are covered.
Goal Setting
In this section, both employee and manager have a chance to discuss goals for the next year. Managers will generally have an idea of how they want the role to evolve, where they want the employee to improve, and where the employee did or did not meet their goals from the previous period. On the flip side, the employee may have goals or ambitions of their own that they want to bring to the table. It’s important to be open to hearing this, because when organisations grant employees freedom and autonomy over how they their work or their development and career direction, their engagement levels naturally increase.
Performance Conversation
This is the one element most managers include now, and that’s the formal discussion of how the employee performed throughout the year. The manager provides written feedback to the employee, and together they discuss how the employee performed. This should include an assessment of how well the employee met their goals, how they worked throughout the year, and discussion of any circumstances or changes that could have affected this. Nothing that gets discussed here should be of any surprise, regular one-to-one’s and catch ups throughout the year will capture a much more worthwhile and effective level of performance management.
Follow-Up
Arguably the most important step in the review is the follow-up. Agree a schedule or method for continuous discussion throughout the year, to catch up on how you both feel things are going. This gives you the chance to explore whether the employee has met their goals and where they might need to improve. You can do this formally with written feedback, or more informally over coffee. This follow-up is critical to maintaining employee motivation and performance, as well as keeping that good relationship going.
Are Annual Performance Reviews Enough?
Ultimately, feedback is an essential tool for all managers and business owners, but its effectiveness is all in the delivery. It’s up to managers to understand the role of performance reviews, and how they can best deliver feedback to their team. A solid annual performance review is an essential part of this, giving a grounding for both manager and employee and a solid platform to work from.
But you know your team best. Is one performance review a year really enough? Many businesses are now starting to adopt a new approach to performance reviews – one that’s more continuous and involved. Integrating monthly or even weekly check-ins, and on-the-spot feedback has actually been shown as more effective than individual performance reviews.
According to a study done by PwC, 51% of employees said they welcomed and expected regular feedback and praise for a job well done. 51% also said that feedback should be given frequently or continually on the job, with only 1% saying that feedback was not important to them. Overall, a regular feedback cycle between managers and employees can result in timely corrections to behaviours, improved and ongoing development and a much better employee-manager relationship.
At vivoHR we are passionate about helping businesses get the most out of their employees, and making sure everyone is progressing in the direction they want. We believe that the development and performance of your team is a continuous cycle of goal setting, planning performance and working with staff to achieve their goals. If you’d like to discuss how this will work for you, or get some advice on improving your performance reviews, just get in touch with the team today and book your free consultation.