Tips for effective performance reviews

For many businesses a good review system can help to improve communications.

In fact, probably the best reason in most situations for conducting performance reviews is that they improve communication.

Performance reviews enable employees to receive feedback on how well they have been doing their jobs, and to set goals for the next year. At many companies, they also provide a way for employees to assess their managers.

But more than communication benefits, properly done appraisals can certainly aid employees to increase their effectiveness. They also help people clarify their responsibilities and what’s exactly required of them.

In the ideal world, a credible review system can not only increase the performance of the staff, but also help them to work together, with common goals and fewer obstacles.

• 360 degree feedback,
• Upward appraisals, and
• Peer appraisals.

Even in a micro business, these are all important management tools that can help people work together more smoothly and more efficiently.

If there is often tension in the workplace or if there are things that are never mentioned, appraisals, where they are carried out openly in an atmosphere of trust, can have a powerful effect. The performance of employees and manager’s alike can be enhanced significantly.

To make all this happen, it is important to involve employees in the process. If they have ‘buy-in’ from the start, they are obviously more likely to support the system and embrace any results.

Retention is another related benefit of appraisals. Especially among younger people, one of the prime reasons employees walk out of organisations today is the lack of communication and lack of direction and lack of feedback.

For putting a worthwhile review process in place, it is vital to customise the review for each department and job so employees are evaluated by factors that are most relevant to their positions. The more specific the criteria used to evaluate people in specific jobs, the more effective the review will be. Some of the key competencies to focus on, include:

• Job knowledge
• Leadership
• Management ability
• Teamwork
• Communication
• Ethics
• Judgment
• Problem-solving ability

The ideal performance review should not simply look back at the past. It should preview the time ahead as well. It should have strong emphasis on planning – planning how to improve certain things, training plans and the role of the individual in the plans for the business.

As with any other important element of managing a business, preparation is vital. Both parties need to prepare ahead for the review meeting. The manager should review the staff member's goals and record significant points to be discussed. At the same time it is important to ask the employee to come prepared to discuss his or her assessment of key accomplishments as well as areas in need of support or improvement.

For a performance review to be effective, even apparently small things should be attended to:

• The venue – should be comfortable and easily accessible for both parties and a place that encourages open discussion (that means ‘the café’ is NOT appropriate;
• The time of day – must be a time when the manager can focus 100% of his or her time on the review and allow enough scope for a full and unhurried discussion;
• Scheduling – lock the meeting time into the diary well in advance so that both parties have plenty of time for thinking and preparing.

Before a manager launches into a performance review meeting, the objectives should be clear. Equally, the manager needs to focus on a small number of essential elements to ensure that the review covers everything and leaves both parties satisfied at the end:

• Approach the review with an open mind, prepared to adjust or revise based on the conversation.
• Concentrate on the big things first. In what areas has performance fallen short of expectations? Wherever possible, cite concrete examples and note specifics that demonstrate positive performance and areas in need of improvement.
• Review each goal set for the performance period. To what degree were the expected results achieved?  What steps can be taken to remove any barriers that interfered with success?
• Keep feedback about developmental areas constructive. Be specific and objective. Use facts to support your feedback.
• Focus on professional development. Performance reviews are an excellent time to discuss opportunities for your staff member's growth in his or her current position.