A recent study showed that 46% of organizations have modified their performance management systems within the past year. It makes sense because the business environment is undergoing rapid changes every year, and it is only logical for companies to adapt their performance reviews to match the same.

Employees value performance reviews. It is, hence, the responsibility of the managers to conduct the performance review process in the most effective way possible so that an accurate evaluation of employees can be done. Let us start with the basics of performance review and understand its good, bad, and unexpected elements. 

Managers must have a clear purpose as to why they conduct performance reviews. There are two overarching goals behind conducting quarterly or yearly performance reviews:

• To do an unbiased and actual evaluation of the performance of an employee
• Help align the skills of the employees with the goals they have to achieve

Once the purpose of the process is made clear, the rest of the things come easily. 

Step 1: Start With the Performance of the Employee

Begin from the basics. It is always best to start by evaluating the performance of the employee.

While doing so, make sure to evaluate their performance against their job role alone. There is no point in comparing their performance with their past track record or the performance of their team members. As a manager evaluates the performance of the employee against their assigned role, it gives a clear idea of where they have fallen short and where they have done well.

It is important to make the evaluation as clear as possible. Mark elements that are positive, negative, and neutral. Alongside this, provide instances that support these claims. It makes the performance review process more clear and easier for the employee to understand. 

Step 2: Write Down the Feedback and Form a Narrative

Gathering your thoughts about an employee is the first step in a performance review. The next thing to do here is write it down and link it to the job role of the employee.

You can add an example to the narrative as discussed before, to make things more clear. 

"Sarah always pays very close attention to the little things in her work, especially when she's handling client accounts." Her careful method makes sure that not only do all of her clients' needs get met but they are also surpassed. For example, Sarah carefully looked over the client's instructions for a recent job and found possible differences that could have caused mistakes that cost a lot of money. Because she worked hard on it, the project turned out perfectly, and the client praised our team's professionalism and accuracy.”

Step 3: Remember to Keep the Conversation Going

Once the actual performance review process begins, the manager must keep in mind that it is a two-way conversation. It is easy to get lost in the process of explaining things to the employee, so make it a point to give them the time to speak their mind about whatever they feel about the review.

When employees are given an opportunity to speak their thoughts, it leaves zero room for miscommunication. It also helps prevent employees from feeling that the performance review is unjust or biased in any way. 

Learn about the different types of performance review bias.

Step 4: Choose the Right Tone

While giving negative feedback, managers have to keep in mind that they do not use a harsh tone. Although it is subjective as to how employees like to receive reviews, generally, it is best to keep things on the softer side.

If employees feel comfortable enough to receive the blunt truth about their performance (in case the review is negative), managers can honestly speak up in any way they like (professionally). 

Performance reviews are generally quite strenuous for the employees and are bound to make them anxious. So managers have to tread lightly and choose the right tone here. 

Step 5: Be as Detailed as Possible

One of the major reasons for performance reviews to be less effective is (just one in five employees agreed that their company’s performance practices motivated them) when managers become vague in their feedback.

To avoid this, using as clear language as possible is always advised, which is as important as the tone you choose for the performance review process. Take your time and explain everything to the employee in great  detail, so that there is no room for misinterpretation.

Step 6: Choose the Right Tools

Performance reviews can be time-consuming and hectic. Also, the margin for error is close to zero.

HR managers can make use of employee survey tools to gather employee feedback on relevant topics before conducting a performance review. It helps them come up with a performance review process that is much more aligned with the expectations of the employees. 

Even though performance reviews seem plain and simple from the outside, they are pretty nuanced and delicate. Because of this reason, managers have to take great care in conveying the right message to the employees during a performance review. Otherwise, it can turn out to be demotivating to the employees, decreasing their levels of engagement. 

• Managers must make it clear that the main reason behind conducting a performance review is the betterment of employee performance alone.
• Explain clearly the cause-and-effect of the behavior of the employees and the outcome it brought.
• Always end the performance review by discussing the future steps. It can be suggestions, courses, or skills to improve the performance of the employee. 
• No matter what you say, make sure for it to be as precise as possible. It must make sense to the employees as well. 

Now that you are done with the performance review let us move on to the often-ignored aspect of the process. A performance review is only complete when the manager discusses the after-steps of the review with the employee. At the end of the day, the final goal of a performance review is increased employee performance. So, a performance review must be concluded with some actionable steps that an employee can take to improve their performance. 

1. Reflections and Takeaways

Once a performance review is done, managers can reflect on it and make pointers on what went well and what could have been better. They can also give suggestions to employees as to what they can do to align themselves more with their job roles.

The notes taken by the manager can be used to improve the way the performance review is done, making it more personalized and efficient. 

2. Track the Performance of the Employee

Managers can then focus on the level of improvement the employees show after a performance review process. Tracking the performance of employees and looking for a pattern of efficiency are key steps to measure the effectiveness of the review process.

Managers can make a spreadsheet dedicated to each employee and track their weekly or monthly performance. These data can then be analyzed and used for the next round of performance reviews. 

3. Keep the Door Open

Always keep the door open for the employees to come and visit you. They may have things to discuss or clarify in the roadmap created for them. In such cases, allocating a little time for such employees to have a quick discussion with you will only increase the effectiveness of the performance reviews.

It makes sure that the employees do not get stuck anywhere in the process and that they have every support that they need in order to achieve the planned targets. Doing these small activities will make sure that the time and effort managers put into conducting performance reviews do not go to waste. 

4. Well-Rounded Feedback

There is more than one way to analyze the performance of an employee after a review session. Apart from directly conversing with the employees and tracking their performance, managers can also have a conversation with the team members of the employee to get well-rounded feedback of the individual.

It will save you tons of time as well because gaining insights on an employee and their performance from multiple people gives you a complete idea of how the individual is faring after the performance review. These statements can be recorded and saved for future performance reviews to make your review more concrete and reliable.

Performance Reviews Done Right

Every organization spends a heavy chunk of its time and energy in conducting performance reviews. So why not do it the right way? 

Rather than falling for the trial-and-error method, companies can invest in employee feedback survey tools like ThriveSparrow, which paint a clear picture of what an employee expects from performance reviews.

It also shows you areas that need improvement clearer than any other tools available in the market, which makes it easy to alter your performance review process to suit the specific needs of your employees. So what's stopping you?