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Why Are Performance Reviews Important? Do They Really Work?

Posted by Jessica Miller-Merrell

anual performance review

A performance evaluation is an opportunity for a manager and an employee to meet and discuss the employee’s job performance, their performance goals, and organizational priorities. For employees, this process can be something they dread or look forward to. Despite being a star employee, there may be things you can still improve on, and receiving that type of feedback can make you feel like you’re being put in front of a firing squad. As new generations continue to enter the workforce, the way they receive feedback varies. The performance review is a long-established process that only works if both parties are comfortable with the information that is presented.  So why are they important, and do they really work?

Employee performance evaluations may seem like a lot of work with very little payoff. Your HR department spends countless hours making sure each manager turns in their respective employee evaluations on time. Performance reviews are hard, and they are only useful if they are done right. We’ve come up with a few pitfalls to avoid when having a performance review with an employee.

Avoid Being Too Vague

The 10-minute performance review really doesn’t work. When employers wait until the last minute to put together a performance review, they are usually short and salty. There is no substance, because everything is discussed in broad terms that don’t help the employer or the employee. They’re usually as brief as possible and don’t provide enough specific examples about what was good or bad about an employee’s performance.  Stop being vague and start getting specific about what you liked and didn’t like in your employee’s work. Performance reviews can only work when they use specific examples that will improve an employee’s job performance.

Prepare!

Going along with our previous pitfall, employers need to spend time preparing for a performance review in order for it to be effective. If you have 10 employees that you need to give reviews to, spread them out based on hire dates and don’t wait until the end of the year. Throughout their work life, keep a file or document where you can jot down specific instances of both good and bad performances and job habits. This will allow you to reflect on the specifics and write a review that matters to the employee. If you don’t prepare, they’re usually not going to take you seriously, and the review won’t work.

Follow Up

One of the most tedious aspects of performance reviews is the bureaucratic forms that need to get filled out and dutifully and sent to HR. As part of the review, you should be setting goals for the coming year. The worst bosses forget about these goals as soon as they’ve completed the review. There’s no quarterly review of the goals to see if the employee is on track, and there is no constant stream of feedback. Performance reviews only work if there is follow-up throughout the entire year and not just for an hour (or less for some) once a year. To be effective, the goals of the coming year have to be kept in the forefront for both employee and employer.

Use Employee Self-Reviews

In my experience, self-reviews are extremely helpful because they give employees a way to reflect on their own performance. Most employees tend to be harder on themself then their boss would be when reviewing their performance.  This will give the employer more details on how the employee has performed, because they are more likely to remember everything, as opposed to a supervisor who’s keeping track of 7-10 employees.

When written effectively, employee performance evaluations can be helpful to both employer and employee. For the employer, it helps create a benchmark on an employee’s productivity, and it provides structure for a pay-for-performance system. It also creates assurance that if an employee is performing in a subpar way, they will have the information necessary to take the proper steps of reprimanding or terminating. For the employee, it provides feedback on how they can improve, what areas they shine in, and, aside from getting a raise, it documents their performance as it relates to getting their next big promotion.

Performance reviews are important because they help each side of the table gather thoughts and become more familiar with the areas that need improvement and those that are working well. If done right, reviews can be one of the best tools for developing an employee’s career with a company. Use these tips we’ve come up with to avoid the pitfalls of a bad performance review.

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About Jessica Miller-Merrell

Author

Jessica is listed as the 2nd most influential recruiter online and as the 8th most powerful woman on Twitter. She is the author of Tweet This! Twitter for Business, a how-to business guide for Twitter users. She also writes for a number of leading publications, including Fortune, HR Magazine, SmartBrief, and HR Executive Magazine.

4 COMMENTS Join the discussion
  • Scott May, 04, 2013

    Aaaah… performance reviews… love’em or hate’em? Mostly everybody will say they hate them, but still use them, because they provide some sort of a support for giving (or not) a raise. Opinions on how to actually conduct a performance review so that they’re not biased are infinite. Just google performance appraisals and you can see that.

  • Desdemona Rubble May, 07, 2013

    The idea of using employee self-reviews is really interesting. I have yet to see a company that does that though.

  • Ruth Blunt May, 08, 2013

    I can honestly say I loathe performance reviews! They are stressful, create tension at work, and people are never happy of their outcome. Not even when they are good reviews. It’s really easy to mess up a performance review, as one mistake during the evaluation period can drastically drop the overall score of an otherwise great appraisal. Do you really think one mistake is representative for somebody work style, and should be judged based on that one?

  • Jim Scully April, 11, 2014

    I started my own firm six years ago and the first rule I established was NO PERFORMANCE REVIEWS, EVER. Douglas McGregor, who in my view is the father of humanistic management, was against them. Edwards Deming, the father of quality management, was against them. Almost every manager I’ve ever spoken to hates them. Why do we keep doing them?

    Adding my own criticisms:

    1) The cascading objectives approach is fundamentally incorrect because, without explicitly saying as much, it is based on the notion that the sum of the parts equals the whole. Organizations are complex, not linear. No, we do not each take a tiny part of the CEO’s objectives as our own!

    2) Turning an employee’s contributions into a number stored in a database is the best way I know to get employees to manipulate the process. It becomes less about performance and all about the number. That’s just dumb.

    3) There is ample research, going back 50 years, that the most effective and credible feedback an employee can get is from the work itself. Feedback from managers is rarely taken in the right spirit. If the manager is not highly respected, it is usually dismissed as inaccurate. The odds of negative feedback improving performance are much lower than the odds of it disengaging the employee.

    4) Giving a mediocre performer a 2% increase and a top performer a 4% increase is not paying for performance. The top performer will say, “OK, it’s not enough but I understand that’s how the program works.” The mediocre performer will feel slighted, too. And besides, Hertzberg showed us that pay is not a motivator but a hygienic activity.

    We need to rethink the whole thing. Or, better yet, we need to listen to those who have thought about it over the years and stop doing things contrary to what they said.

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