A manager's guide to performance reviews

What are employee performance reviews?

A performance review is an appraisal with an employee and their direct manager to evaluate performance, define strengths, identify weaknesses, review professional goals and plan for the future.

The goal of an employee assessment is to use the feedback received for professional improvement and to identify any areas of concern. However, evaluations are not limited to these areas; they can also include discussions around:

• How the employee is currently progressing towards goals
• How effective their working style is
• Soft skills such as time management and communication
• Attendance, punctuality and behaviour in the workplace

How often should performance reviews be conducted?

Once upon a time, performance reviews were held annually, with no other form of review or feedback process throughout the year. And while we say once upon a time, the reality is that many organisations are‌ still using this cadence. This means that there are millions of employees out there feeling left in the dark when it comes to their performance.

When conducted alone once per year, review meetings aren’t an effective tool to determine an employee’s performance. They need to be used in conjunction with other meetings like 1:1s, 360 feedback and more, but we go into that in more detail in the Ultimate Performance Kit.

Download the Kit now.

Ultimately, when it comes to determining the cadence of your teams’ performance reviews, you need to find what works best for you and your organisation.

There are a few things to consider:

• Are managers holding weekly 1:1s with their direct reports?
• Does your company culture embrace feedback?
• Is the current review structure and cadence working for your team?
• Does your team want more feedback?

No matter what you choose, you should continually embrace a culture of regular feedback and employee/manager catch-ups. Not only can it improve communication, performance and overall engagement, it can also make sure that no surprises occur during your formal evaluations. If you don’t give your team regular feedback, you’re missing out on vital opportunities for professional development that will only propel your workforce forward.

Why are quarterly reviews better than annual reviews?

As well as one-on-ones, another way to provide progressive feedback is to establish  quarterly assessments.

Working in addition to annual reviews, quarterly reviews (which our performance review system allows) enable more frequent feedback and discussion and give more opportunities for timely recognition of wins and high performance.

Learn more about the benefits of quarterly reviews and other progressive feedback methods in our Performance Review Bundle.

Annual reviews in isolation are also known to create stress and anxiety for employees. Annual reviews that ask long questions requiring essay-like responses are being scrapped in favour of shorter questions in quarterly appraisals.

This style of progressive feedback creates less stress and elicits a better response from employees.

Why give progressive feedback on employee performance?

Making performance evaluation a natural part of how you work means employees will speak up when they’re struggling or seek help earlier in the process. This proactive approach is more beneficial than waiting until the formal review process comes around.

A company doing progressive performance reviews – the right way

As one of the first companies to make a move to more progressive employment reviews, Adobe famously ditched its traditional employee performance reviews in favour of a check-in model.

In their new model, managers set clear expectations for employees and give progressive performance feedback at a time that suits the employee and the role they perform. This allows managers to make micro-adjustments based on past performance throughout the working year.

In the first year of this shift, the software giant estimated it saved 80,000 manager hours, the equivalent of 40 full-time employees. At the same time, the company could demonstrate higher employee engagement and retention.

How do you create an effective performance review process?

Before we dive in, it’s important to remember that no matter how you design them or how often you hold them, performance evaluations are a two-way street and most definitely a collaborative experience.

So let’s look at seven simple steps to creating an effective performance process.

Pro tip: Prepare with our performance review template

1. Notify employees about performance reviews in advance

Make sure that your employees know that you will be conducting a feedback session and tell them on which date it will be happening.

When your employee is mentally prepared for a performance conversation, they may look into how productive they’ve‌ been. This self-evaluation might spark interest in them to do their best in the workplace at all times.

A recent survey from the Society for Human Resource Management found that 72% of organisations conduct formal performance appraisals only once a year, whilst only 2% of employees gave their employer an A grade for their performance management.

2. Have a specific goal

You need to make sure that you know what you will be accomplishing in this meeting. Does your employee need to improve upon certain skills? Do they need a raise? Should they take a break for a while?

Prepare yourself and your employee before the evaluation and come up with specific, value-driven advice and issues to discuss beforehand.

If there are forms or feedback that need to be documented, ensure you or the employee has filled these out before the assessment discussion.

Don’t lump all of your employees into the same review system or checklist. Each employee’s work performance will differ and so should your review of them.

3. Have a meeting agenda ready

The best way to guarantee that both managers and employees are prepared is to create a meeting agenda and send it across to them a few days before the evaluation meeting.

As a starting point, it’s important to take a look back at the employee’s past performance and work record and look for areas where the employee’s performance can be improved. Make sure you take your time before the review to look over that individual employee’s work over the last 3-6 months – not just recent events.

You should also ask your employee if there’s anything they’d like to discuss and include that on the agenda as well. They may also have questions for you when you bring up any notes of poor performance, so be ready for that too.

Having a set agenda also means that there will be some rough structure to the review meeting, you’ll both get more out of it and it’ll be easier for you to keep a record of everything that’s discussed. Formalising the review process will help to set clear expectations, so nothing shocks or discourages your employee. The last thing you want is for them to feel like they’re being ambushed.

Some of the most important points to cover during a performance review and to include in your agenda are:

• Do the employee’s day-to-day actions align with your business objectives?
• Is the employee held accountable for their duties and expectations?
• Are there documents to support your employee’s work habits?
• Does the employee need to be recognised or awarded for performing well?
• Is the employee compensated clearly and fairly for their work initiatives?

4. Have a positive attitude

When discussing ways to improve performance, you don’t want to overwhelm a staff member with negativity and criticism; that’ll just leave them feeling uncomfortable, unhappy and completely undervalued. And we all know that’s not good for business and can lead to higher staff turnover and a disengaged workforce.

Remember to talk about the positives, and thank your employee for their hard work or any particular projects they’ve worked on. When discussing room for improvement or future performance expectations, make sure you are being as constructive as possible.

How can you work together to resolve a particular problem? What could you or they do differently to make sure that the problem doesn’t keep happening?

Work together with your employee to come up with solutions to any problems or concerns so that they don’t feel like they’re being bombarded with complaints about their performance.

5. Honesty is the best policy

Whilst being honest can sometimes lead to difficult conversations, it is always best to be open. Openly discussing issues or concerns, or giving positive feedback is conducive to employee development. 

In some cases, employees may not even know that they need to improve in some areas, so bringing this up in a dedicated meeting gives them time to process and ask any questions. 

To ensure both parties get the most out of the evaluation, be clear that it is an open platform for honesty. As managers, you need to make sure that you’re supporting your team and providing a safe environment for open communication. If you are struggling to think of questions, these are a great place to start: 

• Is there anything I can do to support you more?
• Is there any training or guidance you’d like to take part in?
• Is there anything you’re not happy about?

Keeping an open line of communication like this will help employees to feel valued, listened to and more secure in their work environment. It also means they’ll approach you more readily in the future.

To reinforce this, you could also send out an anonymous employee satisfaction survey to your team. Show that you care about your employees, value their input and care about their happiness. In turn, they’re likely to perform better and care much more about your business.

6. Make it a collaborative process

When you are conducting a performance review, make sure that it’s not a one-way conversation and that you are open to your employees feedback and concerns.

Try not to leave any questions or problems unresolved and instead, come up with a plan or solution that has actionable goals and timelines.

Focus on SMART goal setting: (Specific, Measurable, Attainable, Relevant, Timely.)

It’s also important that you can discuss a future-focused plan together.

Does the employee need to work a little harder? Let them know that you will be monitoring their performance a little more closely and give them dates as to when they can expect a follow up evaluation. Maybe your employee has been asking for a raise; this would be a great time to let them know if and when that could come to fruition and discuss what they can do to achieve it. 

At the end of the meeting, it’s important to make sure that everyone is clear about what has been discussed. Let your employee summarise their thoughts about the meeting and make sure that they don’t leave with any questions unanswered.

Remember, this meeting should be for the benefit of both the employer and the employee. So remember to ask if they have any questions.

7. Talk about career development

Career progression is important to most people, and employees want to know that there is room to grow with the company. An employee evaluation is the perfect time to put a plan in place for employee development.

In order for this to be effective, ask what your employees goals are and how they see themselves developing within the company.

What does a good employee performance review look like?

By now it should be clear – a good employee assessment is a well-structured, constructive and objective evaluation of an employee’s job performance and contributions. The review process provides valuable feedback that helps employees understand their strengths, areas for improvement and opportunities for growth.

You’ll know you’ve run a successful employee appraisal when you have the following outcomes:

• Clear objectives which focus on specific job-related criteria, such as key performance indicators (KPIs), OKRs or goals and competencies relevant to the employee’s role
• Evidence and documentation – As a manager, you should prepare for the review by gathering relevant data and documentation, such as performance metrics, project outcomes and examples of the employee’s work. 
• Two-way communication – the review should be a two-way conversation, allowing the employee to share their thoughts, concerns and goals.
• Constructive feedback that is specific, actionable, and framed in a way that encourages improvement rather than discouragement, highlights achievements and successes, but also addresses areas for development with clarity and sensitivity.
• Career pathway or career progression opportunities – the employee is clear about progression and growth opportunities, such as training, workshops or mentoring
• SMART goals which align the employee’s efforts with the organisation’s objectives
• Follow-up and support – after the review, provide ongoing support and follow-up and schedule regular check-ins or one-to-ones to track progress

Most companies will do an appraisal at least once every six months – but the more regularly you catch up with your employees, the more on top of things you’ll be and the quicker you’ll know about any issues in the team. Your employees will also feel a lot more valued, knowing that you’re trying to look after them.

A successful assessment process can also lead to more engaged employees, increasing productivity and driving profitability in your business.

How should managers handle negative feedback during appraisals?

It’s never nice to get negative feedback, but in some situations, it’s unavoidable. The key to handling negative feedback during evaluations is to take an empathetic, supportive and constructive approach.

If you’re delivering the feedback, make sure that before the review, you’re fully prepared by understanding the concerns and gathering specific examples. When raising the feedback, start with positives to set a positive tone, and then present negative feedback objectively, focusing on job-related aspects rather than focusing on your employee’s character.

Leave room to actively listen to the employee’s perspective, and avoid being defensive. Be ready to offer practical solutions and resources to help them improve, and emphasise that negative feedback is an opportunity for development and that you and the business support their improvement. Always wrap up the review on an encouraging note rather than ending it on negative points, reaffirming your belief in their potential and commitment to their success.

And if you receive negative feedback from your team? Approach it with an open mind and a willingness to listen and learn. Embrace constructive criticism as an opportunity for your own growth and development. Engage in open discussions with your team to understand their concerns and work collaboratively towards improving the overall work environment and team dynamics.

Being receptive to feedback sets a positive example for your team and strengthens the trust they have in your leadership.

Should performance reviews be used for promotions or salary raises?

Appraisals can serve as valuable input for promotions and salary raises, but they should not be the sole determining factor. Instead, they should be one component of a comprehensive evaluation process that considers various factors, such as skills, experience, achievements, and contributions to the organisation.

That being said, evaluations can be used to identify high performers as well as recognising achievements and contributions, which may be relevant to salary reviews.

Do it all with our all-in-one platform

As important as they are, performance reviews take time, preparation and involve you to step away from your day to day work duties. But there are ways you can simplify this process! 

Manual processes had their time, but they are outdated and take up time that could be better spent on other tasks. The Employment Hero platform takes the stress out of HR and payroll and has the functionality to streamline and improve your employee evaluation procedure. 

Our next-gen software helps launch businesses on the path to success by powering more productivity every day. Offering everything your business needs, from finding and hiring top talent using SmartMatch, seamlessly onboarding new hires, automating complex payroll, and driving employee engagement and morale all backed by UK-based expert support.  

If you’re looking for an all-in-one people management platform to help manage your performance reviews, spending less time on admin and more time focusing on your employees,Employment Hero can help.

Download our Ultimate Performance Kit now to get expert tips on managing performance in the workplace.