An effective performance review process provides a valuable foundation for discussion and development planning, while offering constructive feedback and development opportunities to employees.
Performance management and performance review no longer involve “checkbox report cards.” Think of a performance review as an ongoing, collaborative approach, as illustrated by the graphic below.
A collaborative approach to performance
Performance management can make leaders and employees uncomfortable. Moving from a traditional, stressful review process to a collaborative approach provides the opportunity for both parties to:
- Have valuable business discussions
- Clarify expectations
- Discuss any challenges/obstacles in the way
- Align employee activity with business goals
- Build employee commitment by involving them in the process
A collaborative performance review process requires informal coversations/meetings throughout the year to assess employee progress and adjust accordingly to keep projects on track. Mid-year discussions can be time-based, milestone-based or incident-based.
When done this way, when the official performance review time comes around there should be no surprises and therefore less trepidation. The performance review becomes the documented summary of last year’s performance and this year’s activities, milestones and goals—and how they will be accomplished.
Goals of an effective performance review
The goals of an effective performance review include:
- Clarifying job responsibilities
- Identifying and acknowledging changes
- Reviewing business objectives by assessing an employee’s achievement against last year’s objectives and defining business objectives for the upcoming year
- Evaluating training and development by identifying gaps in skills and knowledge in a current position and creating a plan to acquire this knowledge, and discussing the employee’s future and planning what’s next on their career path. Examine how the company can help prepare them to take on bigger roles as the organization grows
Performance review outcomes
Outcomes of the performance review usually support salary increase or bonus decisions. Bonus payments are often based on the achievement of objectives set out in the performance review document. This makes compensation decisions easier to make and communicate.
Who’s responsible to conduct the review?
The performance review and mid-year touch points are a joint responsibility between employee and leader. The reviewer is generally responsible to drive the process and has authority to make a final assessment if agreement cannot be reached.
Both parties should review objectives from last year, prepare an assessment and think about training needs/opportunities. When the formal review takes place, the mid-year touch points provide a good basis for discussion and agreement on the review document.
Preparing for the performance review
Although the reviewer may be driving the process, the employee should be equally prepared for the annual discussion. Both parties should:
- Keep notes all year to remind themselves of the successes, non-performance, challenges and learnings throughout the year
- Review and assess past objectives
- Consider circumstances surrounding each objective
- Consider the employee’s strengths and clear successes
- Identify areas where improvement is needed, and how that improvement might be supported
- Consider how priorities changed through the year
- Use demonstrated examples—this makes your opinion more tangible and more readily accepted
- Turn off cellphones—this is an important discussion and distractions can make both parties feel unappreciated
Additional tips for the reviewer
- Collect feedback from leaders, clients and colleagues
- Take a collaborative approach—aim for consensus whenever possible
- Avoid surprises! Any situation affecting performance should be mentioned or discussed when it happens. This includes congratulations on successes and debriefs on challenges and non-performance
- Allocate enough time to have a thorough and focused discussion
- Choose a private, non-threatening environment to hold the review
Additional tips for the employee
- Take an active role in the review process
- Be prepared to discuss what could have made you more successful. Consider how you could have done things differently. Think about whether you need more resources, better technology or more training in future
- Explain to your reviewer how you would like to see your job evolve. Consider whether there are additional responsibilities that you are ready to take on right now
- Be clear on what you would like to do next. Research any training you might need and where you might get it
- Share suggestions on specific objectives for next year that would enhance your contribution to the business and give you a professional challenge