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Performance Reviews: Part 1 – What Are They?

5 mins read

This article series is written to provide you further insight to Performance Reviews and why they are important, including different processes that your company can implement.

What is a Performance Review?

Performance reviews are traditionally done on an annual basis and are considered an effective way to evaluate an employee’s work performance, identify strengths and weaknesses, offer feedback, and set goals for future performance.

During a performance review, managers will discuss the employee’s recent achievements, how they are performing in their job responsibilities, their progress towards goals, and areas for improvement. Performance reviews are intentional, meaning they are scheduled conversations with an overall objective of providing support and helping employees understand expectations and perform better moving forward.

Performance Management

Performance management is vital to the success of any business in resolving performance problems before they become insurmountable. Since transparency and communication have become hot topics in the workplace, leading practice is to implement formal evaluations and informal reviews.

Formal Performance Evaluations: are generally conducted on a semi-annual and/or annual basis, where the employee receives a score based on their performance. The semi-annual review (mid-year) generally takes place halfway through the year in June; while the annual review is done at the very end (December) or beginning (January) of the year. If you implement two formal performance evaluations yearly, the score and evaluations captured on the annual performance review is the final performance score. The scoring and evaluation captured on the mid-year review does not count, this is only meant to provide an employee the initial scoring of their performance for the year.

Informal Performance Reviews: are generally conducted on an as needed basis or structured on a weekly, monthly, or quarterly basis. Typically, this informal process does not include an evaluation score, only intended to touch base and provide feedback.

Practicing more frequent communication in the workplace helps build trust between the employee and their manager by allowing multiple opportunities to give and receive feedback on performance before the end of the year, as no final performance outcome should be a surprise to anyone. Surprise performance outcome scores are not fair to the employee and holding off on feedback could have a negative impact on the business.

Businesses are starting to transition away from the traditional way of evaluating performance, which is solely based on scoring the employee’s work performance as it relates to their job duties and ability to meet deadlines.

In recent history, businesses have begun to realize there is more to an employee’s performance other than how they perform their job duties alone, putting emphasis on company culture. Because of this shift, businesses evaluate their employee’s capacity to perform their job duties and incorporate their capacity to execute as it aligns to the company’s culture, values, mission, and core competencies. In addition to this factor, businesses have also introduced peer evaluations into the equation, which is only meant to provide anonymous feedback on how the employee works as a team member.

Main Goals of Performance Reviews

When done right, performance reviews can help employees understand:

    • What they’re doing well
    • How they can improve
    • How their work aligns with larger company goals, and what is expected of them

Managers who use performance reviews effectively can easily:

    • Recognize high performing employees
    • Correct issues before they become insurmountable
    • Communicate expectations
    • Encourage growth and development, and foster employee engagement

Regardless of whether a performance review is formal or informal, it is important to schedule the meeting far enough in advance so the employee and their manager can prepare for it. This ensures the main goals or objectives of these meetings are met. Preparing for these meetings will be discussed in a future part of this series.

Now that you have been introduced to what performance reviews are, the purpose they serve, and the different types of performance management reviews; please stay tuned for part 2 of this series when we discuss Formal Performance Evaluations and the difference between mid-year and annual reviews.

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