The A-Z of performance reviews

As the end of the financial year approaches, performance review season is in full flight for many organisations.

Performance reviews can conjure up all kinds of feelings for employees and managers, but a well-considered appraisal offers a chance to recognise employees’ contributions, emphasise their role in your organisation’s success and demonstrate your interest in their growth and development.

New research from SEEK has found that 41% of Australian employees participate in some kind of performance review. While performance reviews are an opportunity for employees and their managers to review goals and identify prospects for future development and learning, they also offer the chance to raise any concerns. “Where there are performance issues, a review gives you an environment to address this and determine a way forward,” says remuneration and benefits expert Andy Pope.

Performance reviews can take many forms. They include:

• Rating scales – this is where a variety of areas are appraised. A checklist may be used to evaluate employees’ technical skill set, behaviours, teamwork and communication skills

• 360-degree feedback – this involves in-depth appraisals and feedback from peers and other stakeholders in order to gain a complete understanding of the employee being reviewed

• General performance review – this involves evaluating whether established goals were met and setting new ones 

• Employee self-report – this requires an employee to consider and reflect upon how well they contribute to the organisation

Some organisations will use a mix of these methods.

For those who participated in performance reviews, roughly a third (34%) use a combination of both informal and formal methods, whereas 34% accessed informal feedback only, and the remaining 32% only did formal appraisals.

More employees agreed that informal feedback (94%) was seen to be of more value than formal performance appraisals (86%).

• Informal reviews allow for open conversation and for managers to provide feedback on the spot

• Formal appraisals allow structure and documentation that can be tracked over time

• Different generations may prefer different types of reviews – in general, Gen Y and Millennials tend to prefer informal, conversational reviews whereas Baby Boomers favour formal, linear appraisals.

As the end of the financial year approaches, performance review season is in full flight for many organisations. “Having a standard process for all staff demonstrates that everyone is treated fairly and this builds trust in your organisation,” says Pope. “Such a process also gives you an opportunity to identify and eliminate any bias against age, gender, background and so forth.”

• Be organised - if you have a formal review process, identify the best time to conduct reviews, block out certain days and invite employees to choose a time that suits them

• Distribute paper work in advance – this means employees come prepared and the conversation can be guided and efficient

• In the middle of the review cycle hold a ‘touch base’ meeting, which is a brief and more informal version of a formal appraisal.

There are three mains steps in preparing employees for their appraisal:

Setting out a clear process helps eliminate angst and build trust, says Pope. “Address upfront if the review process includes or influences pay decisions or promotions.” This is an important point, given that 66% of employees look forward to their review, with the most common reason being the potential opportunity for a pay rise.

It was also found that many employees (46%) were typically given less than a week to prepare for a formal performance review, and 27% were given up to a fortnight. “Giving people time to prepare, and a voice in their evaluation allows them a chance to feel more in control,” says Pope. “That way the review is a two-way process, not simply something ‘done to them’.”

Consider what has gone well and what might be improved upon. “As well as gathering feedback and evidence of their performance over the year, ask your staff to be ready to discuss what the future looks like,” says Pope. “This will give you both the chance to plan the future, and takes the review conversation away from being purely assessment focussed.”

As well as a standard form that sets out the key areas of the review, business owners should prepare support materials such as conversation guides. “This doesn’t need to have bells and whistles, it simply helps provide clarity on both sides as to what will be discussed,” says Pope. “It can provide structure and a reference point in the event conversations are difficult, as well as ensuring each employee receives a consistent quality of interaction.”

Source: Independent research conducted by Survey Sampling International (SSI) on behalf of SEEK. Interviewing 4800 Australians annually with data being weighted to be nationally representative of age, gender, location, employment status and income (based on ABS).