A performance review, also known as an appraisal, performance appraisal, management review, or performance discussion, is a process in which an individual's performance is evaluated and recorded. It can also be described as the evaluation of one's ability to do work according to the expectations of the people who are being employed. A performance review can take many forms and it has varying degrees of importance depending on the type of performance review. In some cases, performance reviews are designed to teach employees how to improve their specific performances. In other cases, performance reviews are used to address issues that may have arisen due to changes in the workplace, such as changes in the company's structure or culture.
Generally, performance reviews take the form of either formal or informal meetings between supervisors and staff members. Supervisors organize the meeting, prepare a written note of what should be covered in the meeting, and end the meeting. The meeting may be brief, but it is meant to provide feedback on the progress and issues of the company. Staff members are then asked to provide their views on the topics that were discussed, with the goal of highlighting any unsatisfactory overall performance. Their opinions can help managers evaluate their staff members and formulate a plan for improving their performance.
Performance reviews are conducted both by the manager and his or her team; however, in most cases the manager will choose to conduct the entire meeting through the use of performance management systems. Some companies have chosen to outsource the task to a third party company. Although the performance management systems typically used have similar features, they differ in the extent of their sophistication. For example, some companies utilize sophisticated analytical programs and software, while others may rely on simpler and less complex tools. Regardless of how performance management systems are used, there are several elements involved in assessing an employee's performance:
An important part of the evaluation process is the preparation of goals or objectives. These goals provide direction for the evaluation, as well as serve as guiding statements for the staff. In order to obtain these goals, managers must first identify the purposes or goals of the performance reviews. These objectives are generally designed to guide the progress of the company, by detailing what is expected of each employee on a weekly basis. In addition, the objectives need to be specific enough so that employees know what to focus on.
Aside from identifying the goals or objectives, managers need to be able to clearly define the terms or "criteria" that they will be using in the performance evaluations. This helps employees understand where they stand in relation to these standards, as well as why they will be evaluated. For example, some managers will specify that a certain number of production hours must be spent working on projects. Other managers might ask employees to complete a specific number of pages of training documents each year. By clearly outlining the criteria that will be used in the evaluation, managers will help employees develop a sense of belonging within the company.
Unfortunately, not all companies take advantage of the power of their annual performance reviews. While most employees appreciate being able to discuss their thoughts and ideas on work, they also find the format of traditional performance reviews uncomfortable. The lack of direct communication between manager and employee can make these meetings difficult and even annoying. While most companies provide for some form of private conversation or group discussion during the meeting, this is not an ideal situation. Instead, many managers prefer to use the meeting's time for other business concerns, such as discussing stock options or introducing plans for the next year's strategy. By avoiding direct communication between employees and managers during the routine performance review, the opportunity to build meaningful relationships with coworkers is eliminated.
While it may seem like an effective way to maintain control over employee interaction, this approach does not work well for long-term projects or ones with long-term effects. In order to maintain productivity and ensure that employees remain committed to the goals of the company, managers should encourage employees to speak up during performance reviews. Involving employees in the decision making process early in the process allows managers to begin to address issues that may arise and allows employees to voice their opinions. This approach also ensures that managers can truly recognize the contributions of each employee, which is critical in ensuring that the best employees are involved in the best projects and performing at their highest level.
While managers may not always welcome employee performance reviews, they must recognize their value. In an increasingly competitive environment, managing talent means finding ways to recognize the skills of employees while providing them with opportunities to advance. Giving employees the freedom to voice their opinions and to make suggestions for improvement means that managers cannot only attract the best talent, but they will also be able to provide opportunities for growth and success. By providing an environment that allows employees to voice their opinions, managers can ensure that the best employees are getting the most out of their work experience.