Business owners who want to become great workplace leaders often ask themselves the same question: should they start doing performance reviews? After all, performance reviews take time, and they can make the workplace seem needlessly formal.
But as you’ll learn in this article, performance reviews are well worth the time and effort involved.
What is a Performance Review?
A performance review, also called a performance evaluation, is a regularly scheduled one-on-one meeting between an employee and a supervisor to discuss how the employee is doing in their job. Performance reviews typically involve:
- Evaluating an employee’s performance against measurable factors
- Identifying employee strengths and weaknesses
- Offering and receiving feedback
- Setting goals for the employee to achieve by the next performance review
Performance reviews usually happen once a year, but each review should always feel like a continuation of the previous one. As you conduct your performance reviews, it’s always a good idea to recap the results and action items of the last review as a starting point for discussing the current review.
It’s also good practice to have regular check-ins throughout the year to assess how employees are progressing towards their performance goals. This gives everyone the opportunity to address obstacles and get back on track before the end of the year when it’s too late.
Performance Reviews Make Employees Feel Equal
One of the biggest struggles that good workplace leaders face is how to make all employees feel like they’re valued. While it’s easy to praise and reward top performers, average or underperforming employees might feel underappreciated and overlooked. The problem can be especially bad when you hire family members because most employees will assume that they’ll get preferential treatment.
If you want to inspire more leadership and motivation in the workplace, then adopting performance reviews can act as an “equalizer.” Because every employee agrees on the criteria for success, it’ll be easier to keep track of who’s actually performing well and, more importantly, who deserves a promotion or raise.
Performance Reviews Help You Spot the Best Talent
Even the most successful workplace leader can’t keep track of everything at once, and that applies to employee performance. Without performance reviews, all you have to rely on are your personal observations and memory.
Think of it this way: would you rely only on your memory and gut instinct when deciding whether to sell your company? Just like you should sit down and review your company’s finances and performance before making a major business decision, you should also keep details of how your employees are performing before deciding whether to promote an employee and give them more ambitious goals and responsibilities — or whether you’re better off going your separate ways.
Performance Reviews Promote Open Communication
As any good workplace leader knows, open communication is critical to creating a healthy work environment. But creating a culture of communication and transparency is often easier said than done. There’s no better way to start than to adopt performance reviews.
Performance reviews promote general workplace communication because they build a relationship of trust between you and each employee. Your first performance reviews may not seem all that communicative, but don’t give up. Over time, as employees notice how their feedback leads to real change, they’ll be more willing to tell you anything without the fear of being punished for doing so. Eventually, you’ll be able to rely on your employees to give you the most critical information about your business’s day-to-day operations, such as how they really feel about new changes in the workplace or what their concerns are about meeting sales targets.
Performance Reviews Reveal Employee Motivation
There are plenty of ways to boost workplace motivation. Team-building exercises, mini-challenges, company picnics, and incentive programs are tried-and-true methods employed by companies around the world.
But the real question is: what motivates your team? Unless you take the time to understand each employee’s career goals and personal motivators, you can never hope to maximize their productivity and potential.
As employees open up to you more in their performance reviews, you’ll have a better understanding of how to boost productivity in the workplace. And not only will you know how to motivate the team as a group, but you’ll also know what makes each employee tick. For instance, an employee might mention in their performance review that they’re willing to work hard as long as they always have the ability to leave by a certain time to pick up their child from school. Without performance reviews, you may have never realized this. Instead, you’ll always know that this employee who leaves at 3:00 every afternoon isn’t slacking off. They just want to be a good parent as well as a good employee.
Performance Reviews Empower Employees
When your employees feel like they’re just there to be told what to do, they’re not likely to feel motivated to go above and beyond their job description. But when you take the time to do performance reviews, you’re encouraging employees to take an active part in their professional life. That’s because they’re no longer just given goals, but are actively participating in how they want to improve their performance over the coming year.
As you sit down with each employee for their review, you should certainly have some clear goals prepared for them. But instead of leading with a list of targets and criticisms, open the conversation by asking the employee how they think they performed over the last year and what they think would be reasonable goals for the next 12 months. Even if you end up adjusting these goals to fit what you had in mind, when employees feel like you’re taking their feedback seriously, they’re much more likely to feel like they’re part of the process — and more likely to stay motivated throughout Q1 and beyond.
Performance Reviews Show Your Employees That You Value Them
When your team knows that you care about their success, they’ll care about the success of your business in return. At Confie, we put an emphasis on helping people succeed. Get in touch with us today to learn more, or give us a call at (714) 215 2500.