7 effective methods for conducting employee performance review

Employee engagement is pertinent to an organization’s success. 

Engaged employees not only feel valued but also believe that they’re heard and that they’re a vital cog in the organization’s wheel. They’re necessary for an organization to achieve its goals and turn its vision and values into reality.

In theory, employee engagement seems like child’s play since there are just three essential components to employee engagement: an inspiring leader, rewards and recognition, and professional growth. 

But, in reality, 85% of employees are not engaged or actively disengaged from their work. This global phenomenon costs economies approximately $7 trillion in productivity.

So, how can managers overcome this issue and engage their employees?

By conducting effective employee performance reviews.

Your guide to employee performance review and effective ways to conduct it

An employee performance review, performance evaluation, or performance appraisal is an assessment of an employee’s work performance by their manager. 

Such reviews, whether undertaken annually, quarterly or monthly, help a manager identify an employee’s strengths, evaluate their work performance, share concrete feedback, and plan and set goals for future development.  

Effective performance reviews are key to employees leveraging their strengths and honing their weaknesses. This is also instrumental in helping employees better understand the company’s long-term objectives, their role, and how they can contribute.

In fact, 92% of employees desire tangible feedback more than once a year from their managers. 

This might seem like a tall order, but when done right, managers can leverage employee performance reviews to:

• sniff out employee dissatisfaction, 
• communicate expectations, 
• foster employee growth and development, 
• recognize consistently high-performing employees, 
• cultivate employee engagement, and
• lower employee turnover.

Evidently, a performance review is necessary for an organization. But managers can easily get lost in the myriad of HR policies, practices, and in-house techniques. So how can they effectively conduct an employee performance review?

7 Methods managers can employ to to conduct employee performance review effectively

Managers can make a real difference in their employees’ lives through employee performance reviews if they put in the time and effort required to learn and uncover essential things about each of their subordinates. 

The review process must be well-structured, and managers need to be well-prepared for the review for it to be valuable and useful for each employee.

Managers can employ the following methods to offer constructive feedback to their subordinates, make the most out of the review process to boost their subordinate’s morale, and build better relationships with them.

1. Create performance review forms

Performance reviews offer managers a unique opportunity to connect with their subordinates in an open setting and understand their points of view as well.

Hence, it is paramount that managers get actively involved in the review process and design a performance appraisal form to garner actionable insights.

Performance appraisal form can be your guide when it comes to tracking the organization’s needs related to hiring, training, and budget allocation towards these two activities.

By nature, performance review forms combine the manager’s assessment and the staff’s self-assessment. Managers can assist their staff avoid common self-assessment mistakes.

Since everyone is unique with distinct needs, managers must create customized forms depending on their team’s roles, abilities, and scope of improvement. This approach helps engage your employees and boosts their sense of belonging. 

To get tangible data, you can develop a rubric rating system involving numbers, point scales, or grades. Create room for additional constructive feedback to explain the context behind a given score or grade to your employees. 

A well-formatted performance appraisal form ensures that the parties involved are clear on the agenda and can focus on essential points without getting sidetracked or blindsided.

2. Discuss the appraisal review

After you’re done reviewing an employee’s performance, share the collated data with the concerned employee. Make them feel welcome enough that they can add any points they’d like to add or discuss.

Although the performance review is a manager’s responsibility, the discussion can’t entirely be driven by them. It’s crucial that an employee gets to put in their views edgewise for it to be an effective discussion. 

While going through an employee’s performance review, you must’ve highlighted the areas where they’re lacking and can improve. As a manager, you’ve your agenda in mind and would’ve likely outlined the points you’d like to put forth.

But before you get to that, it’s important to ask the employee for their thoughts on the same. They should feel like a noteworthy part of the process and not that you will drive the discussion, and they’re there just for the ride.

It’s likely that an employee might’ve come to the same conclusion as you, and resourceful employees might even go the extra mile. They will put in serious consideration and might come up with ideas on how and where they can improve. 

Listening to your employee’s wants and needs—monetary or career growth—will help you understand where they’re coming from, what they need to feel more fulfilled in their current role, and how you can assist them.

Encourage your subordinates to invest in themselves and learn new skills to grow professionally. 

While discussing the points your subordinate can improve on, ensure that you’re doing it concerning their set goal or objective. 

Since it’s a decisive meeting, ensure that you’re not just focused on the areas your subordinate can improve on. Appreciate them for all that they’ve achieved thus far and celebrate their success. 

3. Determine future course of action

A performance appraisal isn’t necessary to just reflect on the past. It’s an excellent opportunity to plan the future course of action for an employee. 

Managers can leverage past performance as a base for setting future goals and objectives, and align those with the organization’s goals.

Being clear with your employees will help them know what’s expected of them at work and motivate them to achieve their set targets.

4. Formulate a game plan for the CTAs

After you and your employee agree on the future goals and objectives, formulate a game plan to help your employee achieve them. This game plan must establish deadlines for achieving various goals.

The formulated game plan must be actionable, achievable, and lead to your employee’s overall growth and development. 

5. Summarize the meeting 

You can conclude the meeting by encapsulating the discussion. Touch on the points discussed, areas that can be improved, and the future outlook. 

You can also plan the date and time for the next performance review meeting. This will ensure that you’re both on the same page and help you develop a regular feedback habit. 

Be sure to let your employees know you’re in their corner and want them to thrive. Mention that your door is always open should they wish to discuss their concerns or challenges.

Conclude the performance review meeting on a positive note to not only engage your employees but also motivate them. 

You’ll inevitably talk about their shortcomings, but it’s your job that your employees don’t marinate on just their weaknesses throughout and after the meeting. They must leave the meeting feeling hopeful and driven, and not discouraged and dejected.

6. Follow up with your employees

A performance appraisal is a very important metric, but all progress will be lost if you don’t follow up after the conclusion of the meeting. Its effectiveness is reduced if you forget to follow up with your employees on the discussed agendas. 

It might not be possible for you to check up on them daily, but make it a habit to follow up with them every once in a while, especially before they’re slated to achieve a goal or objective as per the formulated game plan. 

Following up will not only guarantee that everyone is serious about the discussed agendas but also let your employees know that you’re invested in their careers. 

7. Hold performance evaluations regularly

It’s the norm to hold employee performance review meetings annually to assess if an employee’s accomplishment should be rewarded with a promotion or a raise or, in some cases, both. 

But conducting performance appraisal meetings regularly is beneficial for an organization and its employees. 

You can hold weekly, monthly, or semi-annual informal performance reviews to check in with your employees. 

This will aid in lifting the pressure off the annual performance reviews, prepare them for receiving honest feedback, and make it easier for them to reflect on their achievements and weaknesses. 

It’ll also become easier for you to point out your subordinate’s mistakes sooner and assist your employees in honing their imperfections in real time.

Conduct effective employee performance reviews

The next time you as a manager think your time could be better utilized, focusing on other strategic matters than putting in effort for performance reviews, think again. 

Performance reviews are one of the best techniques to engage and retain employees. Employees whose accomplishments are recognized and celebrated are likely to perform better. 

Moreover, enthusiastic employees also aid in improving the performance of their team, which in turn, accelerates a business’s growth, and adds to its profitability. 

Author Bio: Arjun Ruparelia

Email – ruparelia.arjun@gmail.com

An accountant turned writer, Arjun writes financial blog posts and research reports for clients across the globe. Arjun has five years of financial writing experience across verticals. He is a CMA and CA (Intermediate) by qualification.

18/10/2022