Guide to employee performance reviews
Posted on 13 Aug, 2012
Holding a regular performance review for each of your staff can be an excellent investment of time. The benefits can include lower staff turnover, improved commitment and productivity, and a team that works more effectively together.
Performance reviews don’t need to be held too often, perhaps once every year or so for established employees and after the first few months for a new member of the team. To be really effective, they need to be planned in advance, giving both you and your staff time to prepare.
It can be too easy to keep delaying performance reviews because ‘something more important’ has come up. While this may seem the best use of your time, repeated delays send a negative message to your staff, telling them that they are not that important. It will improve your credibility to carry out reviews despite being busy, because it demonstrates the value you place on your team.
Issues to consider in employee performance reviews
Feedback. The review is an opportunity for employees to assess their own performance in their job, and to pick out the areas where they think they have done well or made mistakes. As their employer, your role is to help them see their strengths and weaknesses, and to improve their understanding of the impact of their role on the business as a whole.
Your member of staff should also have the opportunity to give their own feedback on how they think the business has treated them. It’s important for employers to try to understand what their organisation looks like from an employee’s point of view.
Targets. This is an opportunity to set targets for the year ahead and review performance against last year’s goals. Targets should be related to the job and agreed with the employee. The best targets are measurable, such as reducing the average debtor days or number of credit notes issued, or raising the number of transactions processed in a certain time.
Peer feedback. Where you have a number of employees working as a team, you may want some of them to give their views on the performance of their colleagues. This information should be collected before the review meeting and fed back to the relevant individual in a constructive manner.
Career development. Many of your staff will have aspirations, with the hope of moving on to other roles in the future. Use the review process to pick up on these hopes. If you can find ways of meeting their need to progress without them leaving your firm, you can reduce the costs associated with hiring new staff.
Not all staff view progression as earning more money or having more responsibility. Many are happy when they are allowed to learn new skills and take on new challenges.
Remove the link to salary. It’s important to set staff expectations about the connection between a performance review and their level of pay. If you do not link the two, it can make the process easier, as your staff don’t feel that this is their chance to bid for a pay rise.
Keep records. To be effective in the long term, performance reviews should include a look at targets and notes from previous years, to see what has changed. Relying on memories of what happened a year ago is often ineffective. Any records should be stored securely and considered highly confidential.
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