Career Coach, Professional Resume Writer, Freelance Writer
In a world where the smallest mistake can cost your business tens of thousands in lost revenue, your talent is key to keeping your edge on the market and driving growth. However, managing a workforce of any size can be a challenge. Employees come with their own particular skill set, ambitions and flaws. So, it can be difficult to uncover their individual drivers. Not to mention the challenges brought on by the hybrid and remote working models where in-person interactions have become few and far between.
In this context, a strong performance management framework is crucial for staying on top of your employees and driving engagement. And if you feel like you still have some work to do in this area, you’re not alone. In fact, a 2020 Gartner study found that, 87% of HR leaders were considering changes to their performance review process. So, to help you make the process as effective as possible, we will look at:
- What a performance review is
- How to make the process as effective as possible and
- Some good and bad performance review examples
What is a Performance Review?
Performance review is an ongoing business process used to define, track and improve the work of individual employees. The process is great for spotting key strengths and weaknesses in employees and building a personalized strategy for growth. Key performance indicators (KPIs) are a good tool for measuring employee competencies.
KPIs should always be measurable and time bound—i.e. an employee should achieve X by Z time. This way, both you and the employee know the expectations.
What Goes Into a Performance Review?
As important as performance reviews are for business success, they can easily backfire if not conducted properly. Inconsistent tracking of employee performance or focusing only on the negative aspects of their work can leave employees feeling bitter and unappreciated.
When planning and conducting your performance reviews make sure you take into account both their job-specific achievements and their overall contribution as an employee. Some areas to consider are:
- Professionalism – This can be hard to measure. So, specificity is key. Perhaps they need to use a specific greeting when answering the phone? Or, they’re expected to respond to client emails within a certain timeframe? Whatever it is, define these expectations and track against them.
- Communication Skills – How effective is your employee when talking to colleagues and clients? Are they able to forge strong relationships and collaborate with others?
- Leadership – Regardless of their current role, leadership is an important skill for achieving results in the workplace. Take note of how they handle pressure, how other employees respond to them and how often they take initiative.
- Problem-Solving – Every business wants to have an army of problem solvers that can navigate challenging times and drive growth. Is your employee creative when faced with a challenge? Do you have examples of them thinking outside of the box and coming up with solutions?
- Attendance and Dependability – Having employees who’re punctual, reliable and engaged in the workplace is just as important as having the right skill set for the job. Can you rely on your employee to get the job done?
Why are Performance Reviews Important?
Performance reviews might not be your idea of fun, but they’re key to business growth. Not only are they great for forging strong relationships with your employees, but a Gartner study has found that companies who’ve abandoned reviews altogether noticed a 10% drop in employee productivity.
Here are some of the other benefits you can expect from your performance reviews:
McKinsey has found that a staggering 54% of business leaders say that their performance management practices haven’t had a positive impact on overall performance. That’s because employees often perceive the process as unfair and not grounded in a real business needs. In order change this:
- link individual goals with business priorities;
- offer effective coaching;
- reward good performance with financial incentives;
Performance reviews aren’t intended only for spotting weaknesses. They’re also useful for communicating when an employee has done a good job.
This is also a great opportunity to discuss any changes in business strategy, specific business challenges and how their work is contributing to address both. This way you not only position the employee within the larger context of the business, but you also make them feel more included and an important part of your overall success.
High-performing individuals are the pillars of your business. Employers must take the time to identify and nurture them as the future leaders of the business. Dedicating time to track employee’s performance and discuss their goals and ambitions can help you discover the hidden skill set in your workforce that you can put to good use while helping your employees achieve their career goals.
How to Conduct a Performance Review?
Performance reviews can be stressful even for your best employees. The very nature of the conversation where you discuss their past actions and behaviors can make people feel vulnerable and uncomfortable. So, you should be well prepared. Here’s how you can have a solid foundation to make sure the reviews are well-planned and -executed.
Get Everyone on the Same Page
Your employees will be much more comfortable with the whole process if they know exactly what to expect from their performance review. Before you conduct your very first review, explain what your expectations are from them. What competencies are you going to be looking at and what does “good” look like?
Give Employees Time to Prepare
A week or two before the review, remind your employees to select a few examples of their work to bring to the meeting. Likewise, on the day of the review, share a copy of your appraisal two or three hours before the meeting. This will give the employee enough time to process your feedback and come to the meeting prepared.
If you want your message to get across, you need to be as specific as possible. When communicating your feedback, steer away from vague statements and use specific examples to illustrate your point. For instance, instead of saying “you need to be more engaged”, say something like “you should volunteer more often to take ownership of team projects”.
Performance reviews should never feel like finger-pointing exercise. Even if you’re talking to someone who has a lot of improvements to make, highlighting their personal flaws won’t make them a better employee.
Instead, focus on specific actions they should or shouldn’t take. Instead of saying “you always forget to log your tasks”—which can come across as criticism—say “it’s important that you always log your tasks so that we have accurate data to work with”.
Best Practices & Tips
Make the Process Employee-Owned – this might be counter-intuitive, but when employees have a say in the design of the performance review process its effectiveness increases by 19%. So, instead of going at it top-down, why not ask your employees to own the creation, testing and selection of the final performance review design?
Keep ‘Em Regular – instead of making this an annual event, schedule your reviews throughout the year at regular intervals. Even better, instead of keeping all your feedback until the next review, why not share it on the spot so employees can make incremental improvements along the way?
Find a Private Space – performance reviews can stir all sorts of emotions, so privacy is important. If you work at an office with glass walls and you don’t have a visually isolated room, then position the employee in such a way that their back is turned to the office.
Use a Performance Management Tool – Today we’re spoiled for choice when it comes to performance management tools. Instead of relying on your memory or notes which can be unreliable and incomplete, implement a dedicated software which can automate a lot of the processes and gather a large amount of data along the way.
Good & Bad Performance Review Examples
Each performance review is an official record which can be used in disciplinary actions or in court if things ever come to that. That’s why it’s important that you keep your appraisals neutral, professional and constructive even if you think some of your notes are private.
Below are some good and bad performance review examples. Notice that bad performance review examples are vague, highly opinionated, and often offer no solution. On the other hand, the good performance review examples are specific and offer room for growth.
Bad Performance Review Example:
Helen is a go-getter when it comes to spotting opportunities and has excellent communication skills with clients. She’s personable and very good at making clients interested in our product. However, she’s really argumentative when challenged internally and, as a result, is hard to work with. She often forgets to follow up with leads on time and her numbers for the past quarter demonstrate that.
What’s wrong with this review?
There are several things that the manager could have phrased more professionally and still convey the same message. Even though they highlight some positive aspects of Helen’s work, the review quickly goes into highlighting personal flaws of the employee without giving constructive feedback on how they can improve.
Good Performance Review Example:
Helen is a good account executive when it comes to spotting sales opportunities and building value with clients. She’s always on time and can be trusted with finishing internal tasks well. However, she struggles with sharing responsibility when working on group projects which can create tension in the team. Helen failed to chase four opportunities in the last quarter which led to missing out on a potential revenue of $56,000. In the next quarter, she needs to work on her time management, communication and organizational skills.
What’s good about this review?
This performance review highlights specific problems with Helen’s performance. Additionally, the review offers steps on how these issues can be improved. Instead of accusing Helen of being forgetful, the manager focuses on the data – that she missed to follow up with four opportunities on time.
When it comes to sharing feedback directly with your reports, here are a few more shorter good and bad performance review examples:
“You’ve really dropped the ball lately.”
(this is too vague and feels like a personal attack on the employee.)
“Your sales this quarter have been down by 40%. Is there a reason for this, and how can we improve from here?”
(it’s specific and the focus is on the results, not the person)
“You really messed up that report.”
(it has an accusatory tone without offering any constructive feedback.)
“We found five critical mistakes in your last sales projections report. Was there any particular reason you struggled with it?”
(this focuses on the outcome and gives the employee a chance to explain.)
“You seem to crack under pressure.”
(this is an opinionated statement, and can be taken personal.)
“That call with client XYZ seemed to be particularly challenging for you. What can we do to make sure you’re better prepared to handle difficult calls moving forward?”
(this offers a specific example and leaves room for improvement.)
Performance reviews might feel like a burden when you have so many other tasks and metrics to worry about. However, if done correctly, they can help you build trust with your employees and unlock their potential to achieve outstanding results.
They don’t have to be necessarily difficult to conduct either. As long as you have some system in place to track ongoing performance, you focus on the results and not the person and you are specific about the improvements that need to happen, you can remain confident that your performance reviews will inspire positive results moving forward.