Performance Reviews and their Value

Performance reviews or appraisals are a key aspect of performance management. Recently yearly reviews have been criticised with employees preferring more regular conversation, but, regardless of frequency, the aim of performance reviews remain the same: to identify any areas where employees need support or growth, and to implement plans to help them improve. They can also be used to inform other decisions, such as administrative decisions regarding pay, bonuses, promotions, or redundancy.

In recent years, there has been some criticism of traditional approached to performance reviews, such as:

• Assessments and the feedback given are not a reliable reflection on an individual’s performance due to their subjective nature;
• They don’t focus enough on steps which could be taken to improve an employee’s performance;
• They aren’t held frequently enough;
• The process is time consuming and demotivating.

Despite these criticisms, there has been evidence which suggests that, if done frequently enough and with a real focus on implementing improvement techniques, performance reviews can aid an employee’s growth. Furthermore, there has been evidence to suggest that it is the employee’s reaction to the feedback, rather than the feedback itself, which influences their future performance. Therefore, making sure employees view performance reviews as a fair process and a chance to discuss their own strengths and concerns with their manager or HR is key.

Assessing Performance

Assessing and measuring performance will, out of necessity, change from industry to industry and company to company. Some roles will lend themselves to certain kinds of performance metrics, whilst others will need a more considered approach to the performance review process. Furthermore, what is considered good performance in one area may need to be defined more broadly, or have a longer timeframe, than in another area. It may be that not all measures focus on outcomes, but instead focus on employee behaviour or their learning development.

In some jobs, performance metrics can be calculated automatically on an ongoing basis. Provided this data is reliable and relevant, this can be a source for performance reviews. Some employers may even choose to make this data readily available to their employees by using real-time dashboards. One benefit of this approach is that individuals can change their effort levels and focus in response to changing demands, a useful feature in time-critical environments.

A more subjective approach is for managers and individuals to give written feedback through a questionnaire. This is a more individualised approach to performance management, but it also constitutes a more subjective analysis, and if not done carefully, could provoke accusations of bias.

In every job there is a large amount of data which could contribute to the performance review, but it is advisable that measures are kept to the minimum that would be useful and relevant to support employees, and that are appropriate for the role. In relatively straightforward cases, prioritising specific metrics which allow specific and stretching objectives to be set is appropriate. In more complex cases, less-specific goals, behaviour standards and learning objectives may be better drivers of performance.

A critical aspect of good performance measures is that they need to be trustworthy and fair. Managers or raters may be biased towards or against an individual, and raters may give higher ratings if they are considerate or lower ratings if they are conscientious or feel powerful in their job. Employees can also sometimes enhance their ratings through self-promotion or damage their ratings by challenging the status quo. Reducing this bias can be achieved in many ways, such as using different raters to check scores, training raters in comparing employees with set standards, or using an expert to check scores.

Feedback

Feedback is essential to the performance review process as it should both motivate an employee and guide them to improve. Feedback should be given regularly to allow for changes in individual circumstances, both personal and professional. It should also be a two-way process, and given in a way that the employee feels comfortable to discuss their performance with their manager. Discussions could cover factors that have impacted or impeded recent progress, steps to continue professional development, or aims for developing the individual’s current role or career.

Ideally, managers should have well-developed skills in giving feedback, including:

• Asking good questions: knowing when to use open or closed questions, probing in a manner that encourages employees to open up about their experiences or feelings;
• Active listening: noticing body language, clarifying comments, and responding in a way that furthers the conversation;
• Giving constructive feedback: focusing on evidence rather than opinion, praising strengths whilst drawing attention to areas of development, and the steps that can be taken to reinforce these.

The relationship between employees and their managers is a key aspect of the performance review process, and can be very effective in developing the strengths and supporting the growth areas in a team. There is evidence to support the view that it is better to help employees build on their strengths and encourage them to replicate those successes in other areas than to dwell on weak aspects. This approach tends to focus on coaching employees and has a future focus, whilst not ignoring underperformance, which may be part of its effectiveness.

At the bottom of a good performance review which encourages healthy development is open communication between employers and employees. Feedback should ideally focus on strengths and future development, rather than dwelling on under-performance, and should be delivered in a manner that encourages discussion from the individual considered. For more information on performance management and why it matters, see our article: What is Performance Management?

In-House HR helps businesses with the necessary HR procedures by taking the strain of people management out of your organisation. Our service not only allows you to centralise your personnel records in one secure place, but also saves you time by providing documents and policies necessary for your business, and customised for your ease. Clocked-In, our absence management system, does more than manage absence. It also provides you with employee performance reviews, a built-in organisation chart, and an emergency roll call, among other features. To learn more about In-House HR and Clocked-In, visit the features pages on our website, or email us at info@in-househr.co.uk. We look forward to hearing from you.