How to Effectively Run Performance Reviews Part 1

graphic of performance review

Feedback is essential. It allows your employees to assess their performance and act upon that assessment. Conversely, poor or absent feedback creates a negative working environment for your employees. This negative work environment manifests unclear expectations, ineffective communication, and general inefficiencies in the workplace.

The most efficient and helpful way to implement a healthy work environment is to hold regular performance reviews. Identifying performance review roles is essential to identify performance review roles within your company. However, performance reviews are no substitute for everyday communication or feedback between management and employees. Read on to learn more about what implementing run performance reviews can mean for your company. 

Identifying the Role of the Performance Review

The traditional identity of a performance review is something to be dreaded. Everyone has a cognitive idea of what a performance review entails. Many individuals on the receiving end of performance reviews identify them as harrowing experiences in which they learn all that they have done wrong in their role, are eventually denied a raise or promotion, and are perhaps even fired. These preconceived notions aren’t conceived from thin air: as the Harvard Business Review highlights, performance reviews are often highly subjective and unpredictable. This format is, unsurprisingly, an ineffective method for supplying employees with helpful feedback.

The traditional performance review is outdated. There is data to prove this: it has been identified that one-third of modern U.S. companies are currently or have already completely phased out the performance review. The companies that comprise this one-third portion aren’t surprising: Adobe, Dell, and Microsoft are included in this share of enterprises. When companies this reputable are pushing to abolish the performance review, the question arises: should you follow suit?

Despite its phrasing, it’s not a yes or no question. As a broad concept, performance reviews can find their way into nearly every company and fulfill an important and effective place within that company’s structure. Instead of figuring out whether or not you should abandon performance reviews altogether, it’s essential to identify how your company can best use the concept to improve your employees’ performance and well-being. That begins with identifying performance reviews’ role in your organization.

Abandoning Performance Reviews’ History

As mentioned before, performance reviews have a reputation for being frightening. They are often subjective, and largely unpredictable for those on the receiving end. They’ve been this way for quite some time. In fact, performance appraisals have seemingly been in place since the 1800s. Undoubtedly, the way we view performance reviews has changed over the years. However, that does not mean that they’ve fully evolved into a modern concept. 

As Forbes has pointed out, our current collective cognition of a performance review likely originates from the antiquated assembly line style of work. Performance reviews during and after the boom of factory work were easily administered: everyone had one, easily traceable job, and they were graded on their ability to complete that job during their review. Now, however, jobs are much more complex. With workers wearing more hats and the average education level rising, providing effective feedback isn’t as simple as it once was. 

This is why, to effectively run performance reviews, you must take a step back and look at the concept altogether. Abandoning preconceived notions about what a performance review should be is integral to improving the idea and will only assist your business and its culture in the long run. 

Take Stock of Your Business

After abandoning preconceived notions regarding the performance review and the role it’s “supposed” to play within a business, you can assess how your business will most effectively utilize the concept. To do this, it’s essential that you begin by taking stock of your business, its employees, its processes, and even the type of work your business carries out. For example, you may remember from earlier that many of our ideas regarding performance reviews originate from factory work: that is because the rigid, evaluatory nature of those reviews is what worked best in that setting. In other words: the traditional performance review isn’t inherently wrong or useless; it is simply outdated and unfit for most modern businesses. 

This is why obtaining an intimate understanding of your business and its needs is important. Our factory example shows that not every review style will work for every business. Different businesses have different needs. For example: Is your business in hospitality, manufacturing, retail, or something entirely different? Identifying excellent or poor performance in each of these industries is profoundly different; therefore, administering effective feedback will differ between each one.

Lay the Groundwork

Once you’ve identified your business type and its needs, it’s vital to lay the foundation for your new performance review system. As we mentioned earlier, your performance reviews mustn’t be your business’s only way of administering feedback. In fact, allowing yourself to rely too heavily on performance reviews for critical employee feedback, criticism, and praise can lead to certain employees being left behind due to a clash in communication style.

To lay the groundwork for implementing your performance reviews, you should first look to foster an open, trusting environment within your workplace. In this context, your employees should be comfortable giving and receiving feedback; it also means that feedback and communication should happen regularly. Regular communication regarding performance- this includes criticism and praise- helps normalize the subject, making performance reviews much less daunting. Performance reviews should always be one of many moments employees hear about their performance from management.

Stay tuned for part 2, where we cover top tips for effectively running reviews!