What are performance reviews? How do you do? and how not to do?

A performance review or performance appraisal is a process of assessing the work done by an employee over a while. The journey to success requires consistent iteration in the process according to the day-to-day evolving world. Similarly, an organization’s success requires iteration in the employee’s performance according to an organization’s objectives.

This article explains the subtle way of conducting an effective performance review. A performance review which will make your employees feel more comfortable and work with their whole self.

The traditional process

As said before, the performance review process is an in-depth professional review for giving employees valuable feedback about their work. Usually, organizations conduct performance appraisal process once in a year and that too at the start of a year.

Stress in the traditional process

The employees dread the performance appraisal process to avoid hurt feelings or defensiveness. Employees become confused, failing to decide which details should be shared and which should not.

Both the employees, as well as the managers, face a delicate situation. It becomes more challenging when managers need to tell an employee to make some significant changes or improvement.

An Adobe survey states 72% of employees and 88% of managers find it difficult and time-consuming to prepare for reviews. On average managers spend 17hours per employee preparing for a review. 64% of employees find performance reviews outdated, irrelevant, and stressful.

25% of employees left the performance review process in tears and even quit their jobs because of receiving a bad review. Global news report found that men are more likely to have a stronger reaction for a bad review. 40% of men and 31% of women have switched companies after facing a lousy review.

The survey also found that 41% of employees switch to companies that don’t have formal performance reviews. And managers find performance reviews unproductive. All these shows that performance review process needs some severe rectification to provide employees with relevant insights for their professional development.

Improved process

  • Frequent reviews

The first drawback of the performance review process is that it is once in a year. One year is an elongated period, which makes the work difficult for both the manager to review and as well as the employees to follow up. It’s like telling someone’s mistake they have done a year ago, where no one will remember what exactly happened. This will lead to misunderstandings and unnecessary conflicts. So it is better to make reviews frequent and address critical behavior of employees right away.

To cope up with the dynamic work environment, performance reviews must be conducted much more frequently to evaluate and update accordingly. Based on your company’s goals and strategies, reviews can be every month, weekly basis, or even daily basis.

When you give employees frequent feedback, it’s more like providing coaching for their development. It makes them stay focused, engaged, and contribute more.

  • Make it a two-way conversation

Communication is the key to avoid and solve problems. Conduct a review session which enables two-way conversation where both the employee as well the manager gets a chance to express their points and interact with each other more.

Giving lectures for hours on how an employee performed will be hard and sometimes stressful and useless. Make it short and crisp with the required key points to be rectified and appreciated. Make the time invested in the review session beneficial for everyone.

You can use a performance review to set clear performance expectations so that employees understand and work accordingly. And also give your employees the space to assess their performance and set their goals for improvement.

The efficiency of the performance review process can be increased by managing it. Here are a few steps you can follow to manage performance review.

Managing performance review process using KRA and KPI

Using KRA and KPI, you can systematically review each employee and provide them with helpful feedback. KRI and KPI represent the list of things required based on which you give a review for an employee. So what are KRA and KPI?

KRA, which is also called a Key Responsibility Area, is used to assign tasks to be performed based on the job description of an employee. Employees are solely responsible for executing KRA’s based on which review will be given. For instance, For a Marketing person, the KRA will b to increase the number of sales.

Here are some points you need to consider while setting KRA:

  • Go through the job description of the employee thoroughly and then set KRAs accordingly.
  • Set measurable goals like numbers and percentage so that you can easily calculate and evaluate.

KPI, which is one of the Key Performance Indicator, is used to track the performance of the employee and consistently check whether the work is going in the right direction. As said before, if the KRA is to increase sales, the percentage of increase in sales is measured using KPI’s.

Here are some points you need to consider while setting KPIs:

  • KPI’s are subsets of KRAs. KPI’s are estimating the methods you can follow to achieve the KRA’s
  • KPI’s are the smaller goals which help you achieve the ultimate goal.

Thus you can quickly estimate whether the employee has achieved his/her targets or not. Performance management removes the complications in the traditional process and provides you with the required details about the employee’s performance so that you can make further decisions.

You can also automate the process to make the review process even more straightforward. You can create your review cycle according to your organization policy and collect data, respectively.

Other methods you can use are:

Graphic Rating scale

This method is listing the traits each employee should possess and rate them on a numbered scale.

Essay Performance Appraisal method

This method is asking the rater to explain about the strengths and weakness of the employee’s behavior.

Checklist Scale

This method consists of a list of statements of employee traits in the form of yes or no questions.

Critical Incidents

This method includes a list of statements regarding an employee’s effective and ineffective behavior

Work Standards Approach

In this method, the management openly set goals and targets against realistic output standards. Further, it is incorporated into the organizational performance appraisal system.

MBOs (Management by objectives)

This method is result oriented. It helps to set and evaluate SMART goals. MBO’s evaluates how the performance has met the goals. Based on it, feedback is given to the employees.

BARS (Behaviourally Anchored Rating Scales)

This method rates the performance in scales. BARS bring the benefits of both qualitative and quantitative data into the employee appraisal process. It is represented in vertical graphs. CIT (Critical incidents) are used to collect the behavioral anchor points, which are used for documenting the human behavior in a particular field.

Overall, Using these techniques you can collect reliable performance review data. Base on which managers can quickly decide the three main things whether an employee needs further training for improvement, increase in pay or promotion. Don’t forget to appreciate your employees on achieving their goals. Appreciation keeps your employees motivated and productive in the long run.

These are easy and effective ways of conducting performance reviews. Find out which method will be suitable for your organization and then go for implementation. Thus you can change the negative approach towards performance reviews into a positive one increasing employee retention. And help your employees grow which will eventually make your organization successful.

Manage your remote team better.

Free for teams of up to 20 people.

Get free demo →