A recent Gartner poll of HR leaders showed that 87% of HR leaders were considering changes to performance reviews. As we edge closer to solving the puzzle of employee engagement, understanding the performance review purpose and process is undeniable.

Only through course correction can we reach the right destination.

Performance reviews, when done the right way, help managers align employee goals with the company goals. It ultimately increases productivity and employee satisfaction. To gain the maximum benefits from performance reviews, let us understand every possible angle of it. 

What is a Performance Review?

A performance review evaluates an employee's skills, contributions, and areas for improvement. It involves self-assessment, peer feedback, and manager input annually or biannually.

Goal-setting, SMART goals, and constructive feedback guide professional growth. Reviews facilitate discussions on career advancement and skill development, informing decisions on rewards, promotions, or corrective actions. They track progress, encourage accountability, and contribute to the  organization's overall success.

How to Conduct the Performance Review Effectively?

According to a recent Gallup study, only one in five employees agreed that their company’s performance practices motivated them. Conducting a performance review effectively involves careful planning, clear communication, and a focus on constructive feedback and goal setting. 

Here's how to do it in 3 brief steps.

  1. Communicate Performance Standards
  2. Identify the Root Cause of Performance Issues
  3. Dedicate Time for Thorough Standards

#1 Communicate Performance Standards

To ensure your performance standards effectively align employee expectations with your company's objectives, it's crucial to communicate these standards clearly. Managers should take the responsibility to explain the roles and expected outcomes to their team members.

This process involves detailing ethical standards, work quality, and key performance metrics, which should be both realistic and aligned with the company's broader goals.

A few examples of performance metrics that you can communicate to your employees.

Key Performance Metrics Examples

  • Quality of Work: The accuracy, thoroughness, and adherence to work standards.
  • Productivity: The volume of work completed and how it contributes to your team's objectives. This includes meeting deadlines and achieving the goals we've set together.
  • Efficiency: The time and resource utilization in order to achieve results. You can also consider the output relative to the input in your tasks.
  • Teamwork and Collaboration: The ability to work with others, communicate effectively, and contribute to a positive team environment. You can observe how your colleagues engage with each other and support team initiatives.
  • Goal Achievement: This performance metric comprises of reviewing the progress and completion of your individual and team goals, assessing how they align with our broader company objectives.

It's essential to set achievable performance criteria considering the available resources and limitations. Avoid setting overly ambitious standards that could lead to demotivation. Regular constructive feedback and recognition of achievements are pivotal.

They not only help maintain high performance standards but also motivate employees by highlighting the importance of their contributions towards achieving company goals. This ongoing feedback cycle ensures that employees are consistently aligned with the company’s objectives and feel valued for their efforts.

#2 Identify the Root Cause of Performance Issues

Identifying the root cause of performance issues is essential for effective problem-solving and supporting employee growth. It's crucial to analyze whether these challenges arise from skill gaps, motivational factors, external influences, or a combination thereof. Engaging in one-on-one discussions with employees is an effective way to uncover any obstacles they may be experiencing in their roles.

To gain a comprehensive understanding, consider examining performance data, conducting skill assessments, and reviewing personal and professional development goals. Once you've identified the root causes, you can customize your support to address these specific needs. This may involve providing training, mentorship, or coaching to bridge skill gaps, or adjusting workplace dynamics and enhancing job satisfaction to boost engagement and performance.

Additionally, external factors such as resource limitations or organizational changes could be impacting performance. Collaborating to find solutions or adapt to these challenges is key.

Continuous feedback and monitoring will allow you to track progress and refine your strategies, ensuring they remain effective. This proactive approach not only helps in resolving issues but also contributes to the overall growth of your employees and strengthens the organization.

A good way to identify issues is to run surveys that gauge engagement, job satisfaction, work culture, or any other parameter that you would want to measure.

Just use an employee success platform that can gauge your employees' sentiment and measure performance during 360-degree reviews.

ThriveSparrow's Engage Module displaying the surveys dashboard.
ThriveSparrow's Engage Module where surveys of any type can be created and scheduled for your employees.

View our library of employee survey templates here.

#3 Dedicate Time for Thorough Discussions

Allocating adequate time for thorough discussions during performance reviews is essential for fostering a meaningful dialogue and providing constructive feedback. Schedule individual meetings with each team member to ensure these discussions are comprehensive and not superficial. Such sessions allow both you and your employees to share thoughts, celebrate achievements, address challenges, and plan for future career aspirations.

Active listening is crucial during these evaluations. Strive to fully understand your employees’ viewpoints and the details of their work. Discuss their successes, areas of progress, and professional development aspirations. This balanced approach ensures fairness in your evaluations and demonstrates your commitment to their growth.

By dedicating time to these discussions, you foster a collaborative environment where performance issues can be openly addressed and resolved together. This not only shows your commitment to their development but also helps build trust and satisfaction within your team, enhancing overall engagement and productivity.

What to Convey During the Performance Review?

During the performance review, managers should convey several key messages to employees to ensure a productive and constructive discussion.

1. Recognition of Achievements

Acknowledge employees for their efforts and triumphs at performance reviews. This appreciation boosts their accomplishments and motivation. Citing examples shows your employees that you appreciate your employees' efforts.

Public or internal recognition of team successes can increase morale. Discuss how the employee's efforts affected team and company goals. Appreciation boosts self-esteem, motivates employees, and creates a favorable organizational culture that enhances employee loyalty and engagement.

2. Areas of Strength

Present concrete instances of an employee's qualities during a performance evaluation.

Develop your employees' talents by highlighting their strengths and areas of improvement. This can give employees a clear picture of where they excel and where they need to make improvements.

Showing employees their talents may enhance their motivation and engagement by making them feel proud of their job. This can help employees maximize their talents by concentrating on their strengths.

ThriveSparrow's Hidden Strengths view in performance review reports.
ThriveSparrow's hidden strengths view in performance review reports gives both managers and employees a clear picture of what is needed.

3. Areas for Improvement

Encourage open communication and enable your staff to raise questions regarding expectations. Set quantifiable objectives and KPIs to track success.

This helps them stay motivated by reviewing and reinforcing standards during review time. Communicating objectives helps you create a high-performance culture by giving employees direction and purpose.

4. Clear Expectations

Set clear expectations for employees' work following a review period.

Clear standards hold people accountable and ensure everyone works toward the same goals. Encourage open communication and enable staff to raise questions regarding expectations.

Set quantifiable objectives and KPIs to track success. Staff stay motivated by reviewing and reinforcing standards during review time. Communicating objectives helps managers create a high-performance culture by giving employees direction and purpose.

5. Developmental Opportunities

Performance reviews are a gateway to learning and growth, making employees feel valued and invested in their career progression, which in turn boosts their engagement and retention.

During the review, explore training, advancement opportunities, and challenging projects that could enhance your employees' skill set. Your development plan will align with their goals, interests, and career aspirations. Focus not what your employees have achieved but also on where they can go next.

Providing regular feedback, and offering coaching are ways that will support your employees in realizing their potential. By fostering an environment that prioritizes learning and development, you will not only advance their career but also build a team poised for success.

6. Feedback on Behavior

In performance reviews, you shouldn't just assess your employees' work but also how they work. This includes their behavior, communication skills, cooperation, and ability to collaborate.

Timely, constructive feedback allows for reflection and growth. Be committed to fostering open communication to understand and improve interpersonal dynamics. By discussing how behaviors impact their role and relationships, you can aim to build a foundation of trust, respect, and effective teamwork.

My goal is to provide feedback that is supportive and constructive, focusing on how we can all contribute to a positive work environment. Together, we can enhance our social skills and teamwork, making our workplace more collaborative and inclusive.

What to Do After the Performance Review?

After the performance review, managers should quickly let employees know what the results were and what the decision was. They should also work with employees to develop practical plans for growth and offer ongoing feedback and support.

Recognizing growth and accomplishments is an important way to keep your employees motivated and encourage good behavior. Use what you learn from the review process to help you make decisions about talent management and add to the organization's plan. By doing something to follow up on the review, managers encourage their teams always to improve and push them to do their best work.

Wrapping Things Up

Everything starts with employees. Be it the failure or the success of an organization. In order to make sure that the company and the employees are on the same page, it is imperative that managers understand their employees better. The key is in asking the right questions. ThriveSparrow has perfected this art and can help you gain mastery of it as well through our curated surveys. All you have to do is give us a call.