Performance reviews are a widely-used tool among businesses of all sizes seeking to achieve success. Though managers who provide ongoing feedback and coaching may view them as redundant, performance reviews provide a valuable opportunity to help hone your workforce.
Phil Greenough, founder and CEO of the Boston-based Greenough Brand Storytellers, writes in an April 2017 article for Entrepreneur.com that the main appeal of performance reviews is “to take a holistic look at each employee’s performance over the past year, compare it against expectations, recognize areas of success and identify, discuss and plan for opportunities to improve. It also allows the manager and employee to track performance trends over time.”
Performance reviews help provide a baseline against which you can measure employee performance. They also give employees a way to track their own growth and better understand what the company expects of them — but all of that can only work if they are accurate.
Accuracy is paramount
Performance reviews can only truly be used to achieve success if they are used properly, which is to say that they accurately reflect the performance of your employees. In a June 2018 article for The Balance, human resources expert Susan M. Heathfield warns against inflating a worker’s ratings to avoid difficult conversations or to make the department look good.
“Remember that in the case of a layoff or firing, lawyers can subpoena these employee evaluations as evidence in a court case,” she says. “If a manager fires an employee for poor performance in June, but the employee can produce an evaluation from December that rates her highly, the company will have a hard time defending the decision to terminate.”
Similarly, it is important not to set unrealistic expectations that lead you to rate high-performing employees too low, as this can demoralize them and drive them out of the company. “Keep in mind that low-performance ratings lessen an employee’s chances of promotion and growth within the company. They increase the chance of a voluntary termination. An accurate low rating can help weed out bad employees, but an inaccurate one can drive high performance out of the company.”
Conversation is key
When meeting with an employee to discuss their performance review, conversation is key. Your employee needs to feel that your intention is genuine and your relationship is positive, which will help them feel motivated to improve in the workplace. You can do this by making conversation, taking care not to do all the talking or to lecture your employee, which can make them feel as though you treated them unjustly. Even if an employee’s performance was below average, unless you plan to let them go, you want them to leave the review feeling optimistic about their ability to turn things around.
“You want an employee who is motivated and excited about his ability to continue to grow, develop, and contribute,” Heathfield writes in an April 2018 article for The Balance. “Aim for performance review meetings in which the employee talks more than half of the time.”
Heathfield recommends asking the employee questions that encourage conversation, such as how they feel you can be a better manager, what they hope to achieve for the company that year and how you can help them provide the tools they need to reach those goals. By doing this, the performance review process can become a powerful tool in your management tool set.
“The performance review can enhance your relationship with employees, improve performance for your organization, and enhance employee-manager communication significantly — a boon for customers and work relationships,” Heathfield writes.
The annual performance review period can be a tense time for both you and your employees. But when used well, performance reviews can go a long way toward building a positive relationship with your employees and fostering long-term growth.