Performance reviews, or performance appraisals, are one of the most critical aspects of a company’s human resources management. These regular meetings provide a valuable opportunity to assess employee performance, identify areas for improvement and recognise achievements.

In this article, we will explore what a performance review is and how best to conduct it in order to maximise the potential of employees and improve the company’s overall performance.

What is a Performance Review?

A performance review is a formal process during which an employee and his or her supervisor discuss the employee’s work performance. This periodic evaluation provides an overview of competencies, achievements and future goals. It is a crucial time to set clear expectations, recognise successes and identify areas for improvement.

Performance reviews are a crucial step in the growth and development of employees and, consequently, in the evolution of the company. With clear communication, constructive feedback and measurable goals, these reviews not only improve individual performance, but also contribute to the overall success of the business. Implementing a performance appraisal practice is an investment in innovation, productivity and employee satisfaction. All key elements for the success of any business over time.

What is work performance?

When we talk about job performance, we are referring to the way an employee performs his or her work in the corporate environment. It is a complex concept that encompasses various aspects, including the efficiency, effectiveness, productivity and quality of the work performed by the professional or a team of professionals within an organisation. Work performance can be measured through a number of indicators, which we will discuss in detail in a moment.

Work performance is often evaluated through periodic appraisals that contribute to the evolution of employees’ competencies and the improvement of individual and organisational performance over time.

Here are some of the most relevant indicators for measuring work performance:

• The quantity and quality of this work are essential indicators of job performance. An employee who produces a large amount of high-quality work is considered to be highly performing.
• The ability to meet deadlines is a sign of efficiency and organisation. Employees who deliver work on time demonstrate good time management and prioritisation.
• Working effectively in a team, communicating clearly and contributing positively to the work environment is crucial to an employee’s overall work performance.
• In customer-oriented industries, such as customer service or sales, the ability to meet customer needs and expectations is a key indicator of job performance.

The benefits of periodic performance review

A good performance review, when managed effectively and professionally, offers several benefits for both employees and the company.

Below we have collected some of the main benefits of a well-conducted performance review.

Benefits for employees

• Constructive feedback: a detailed evaluation provides specific feedback, enabling employees to understand their areas of strength and opportunities for improvement.
• Professional development: helps to identify areas where they need to improve and to plan development actions to advance their career.
• High motivation: recognition for good work during the performance review can increase motivation and commitment, prompting one to continue to give one’s best in one’s work.
• Career planning: provides an opportunity to discuss long-term career goals and identify ways to achieve them.
• Recognition: positive feedback during the evaluation reinforces the professional’s self-esteem and makes their contribution to the company recognisable.
• Emotional stability: transparent and objective evaluation reduces employees’ anxiety and uncertainty about performance and their fate in the company.

Benefits for the company

• Performance improvement: by identifying areas for improvement, the company can work with employees to improve their skills, thereby increasing the overall performance of the business.
• Talent identification: listening to employees’ concerns and supporting their development can increase loyalty to the company, reducing the turnover rate.
• Staff development: reveals opportunities for staff training and development, contributing to the continuous growth of employees and the company.
• Goal alignment: ensures that employees’ individual goals are aligned with company goals, creating a cohesive, goal-oriented workforce.
• Talent management: provides valuable information for the identification and development of future leaders and managers within the organisation.
• Positive organisational climate: a corporate culture that values and supports its employees through fair and constructive evaluation contributes to a positive and collaborative working environment.
• Improved internal relations: promotes open communication between supervisors and employees, thus improving relations and collaboration within the company.

How to conduct an effective performance review

The purpose of the performance review, as already mentioned, is to provide a formal, structured evaluation of an employee’s performance over a specific period of time.

This is how any performance review should be conducted:

Planning

Both the supervisor and the employee should prepare for the review. The supervisor should review the employee’s performance throughout the year, collecting data and feedback. The employee should reflect on his/her work, recognising achievements and uncompleted goals.

Honest communication

Both the positive and the negative should be communicated constructively. Emphasising successes encourages good work, while identifying areas for improvement provides opportunities for growth.

Clear and measurable objectives

Define clear and measurable goals for the future. These goals should stimulate one to do more and better but, at the same time, be attainable and aligned with corporate objectives.

Active employee involvement

Allowing the employee to evaluate their work can provide valuable perspectives. Ask them to identify their strengths and areas where they would like to improve.

Recognition and appreciation

Openly acknowledge the employee’s achievements during the year to help increase his or her motivation and commitment.

Professional Development

Discussing training and development opportunities to help employees improve their skills and progress in their careers is another key step to contribute to professional development.

Follow-up and support

Finally, it would be ideal to create an action plan based on the review that includes specific goals and performance scaling. The supervisor should offer continuous support to help the employee achieve these goals.

Every word shared during these reviews is a step towards a stronger and more resilient company. Through the recognition of each individual’s skills and achievements, personal goals can be aligned with those of the company.

Moreover, this approach provides the opportunity to face challenges together, identify gaps and establish concrete plans to overcome them just as only the best teams know how to do.

If you would like to find out how to conduct proper performance reviews, please contact us. For us at Kilpatrick, it is a pleasure to be at your side to achieve your business success together.