How to Conduct an Effective Employee Performance Review

Employee performance reviews are integral to both your company and its employees. When handled appropriately they can improve communication, productivity, and job satisfaction. They provide an opportunity for you to connect with your direct reports and give valuable feedback that will help them grow in their positions. According to a 2017 Gallup study only three in 10 employees strongly agree there is someone at work who encourages their development. Following a few best practices will help you ensure the performance reviews you give are effective and encourage employee growth and development.

5 Best Practices for an Employee Review

1. Discuss expectations prior to the performance review.

Give your employees the opportunity to have a successful review. Share the metrics you will use to evaluate them. Top priorities can vary depending on the nature of the position. Will their ability to work closely with a team be heavily assessed or are you more concerned with them working on their own individual contributions? Are there certain tasks or projects that will warrant a more stringent evaluation than others? Communicating this beforehand gives your employees insight as to what they need to focus on throughout the year. It eliminates the ambiguity that can lead to misunderstandings.

2. Have regular, informal one-on-one meetings throughout the year.

There are mixed opinions on the value that traditional annual performance reviews provide. A 2005 People IQ survey found that 87 percent of both managers and employees believed annual reviews were ineffective and not useful. Scheduling several informal meetings thought the year will help you to establish trust with your employees prior to having a formal performance appraisal. During these meetings you can give ongoing, preliminary feedback. This is less daunting as your evaluation doesn’t have to be documented. It creates a more encouraging atmosphere and space for your employees to express their challenges and concerns as well.

3. Make at least two copies of your evaluation, one for you and the other for the employee.

When you complete the performance review be sure to document and make copies for yourself and the employee. It will serve as a reference in the event that you want to offer a salary increase, implement a performance improvement plan (PIP), etc. Giving the employee a copy also ensures that your assessment was communicated to him and helps to prevent any later confusion.

4. Begin and end the conversation on a positive note.

Performance reviews should be approached from a positive standpoint. While this is the time you will communicate areas in which the employee can improve you should be delicate in your approach. Beginning and ending the meeting with a discussion of the employee’s positive attributes is a good strategy to help prevent resentment that sometimes comes with pointing out another’s weakness(es). Also, be sure that the recommendations you give are stated in a way that shows you care about his future with the company.

5. Be prepared for questions regarding sensitive subjects i.e. promotions & raises.

Employees are not the only ones who are anxious around review time. For numerous reasons you may be as well. Sensitive topics tend to arise during annual reviews and if you are not prepared to discuss, things can become awkward. One subject you should always be prepared for is salary increases. Even if they decline to mention at any other time during the year you should expect employees to initiate this discussion during their performance review.  In many organizations performance is directly linked to salary and therefore, employees are more comfortable discussing it during that time.

You can prepare by figuring out if a raise is feasible given budget constraints and their performance details. Also, take time to consider any other delicate topics that may arise. Being prepared prior to the meeting will increase your chances of having a successful review.

Create a Successful Performance Review Process

Keep in mind that performance reviews can be intimidating for anyone. The process can be especially overwhelming for employees as it places them and their work in the spotlight. Focus on building an ongoing relationship with them and making the review process as fair as possible. In the long run your employees will appreciate it and so will you.

For tips on hiring top talent and more strategies to encourage their growth and development, contact  Norstrem & Associates at tim@norstrem.com.