Critics of the performance review have long pushed for its extinction. And it's easy to jump on the bandwagon. When implemented incorrectly, performance reviews can feel outdated, cumbersome, and outright disingenuous. But when handled strategically, the performance review can bring benefits that far outweigh the cost of the process.
Here are five key reasons to keep and perhaps upgrade the performance review for your organization.
1. Retain Star Performers
All-star employees are hard to find and easy to lose. Employees who feel that their efforts go unrecognized are more likely to seek that recognition with a competitor. The performance review is the perfect venue to congratulate and praise your employees for exceeding expectations. And it's a two-way street: employees have the chance to offer their thoughts on their role and where the business is headed as a whole.
But don't just offer thanks and compliments; if an employee is a star, present them with opportunities to move up, take greater responsibility, and further hone their professional skills. You can also refer to the reviews when it's time to choose the best candidate for a promotion.
2. Manage Employee Rewards
Top employees are always learning and expanding their skill set, and their dedication should be rightly rewarded. In the same vein, a business should be happy to invest in top talent. Performance reviews can help dispel the mysteries surrounding employee rewards and create more solid thresholds for bonuses and raises.
3. Provide Opportunities for Growth
Employees and managers should always look to the future. Seeking or providing opportunities for additional training can remedy lagging performance and prepare employees to take on leadership roles in the company. This is also the ideal time to discuss both individual and company goals and make sure everyone is on the same page.
4. Diagnose and Fix Problems Early
If an employee's performance leaves something to be desired, now is the time to address the issue. It may be something as simple as coming to work on time, or an issue out of the employee's hands, such as outdated tools, poor teamwork, or an external issue delaying projects. The goal isn't to assign blame, but to find and fix the root of the issue and bring out the best in the organization. In the worst case, you'll have official records if a terminated employee files suit.
5. Make It Whatever You Want It To Be
There is no universally supreme way to handle performance. You adapt the process to the goals of your business and the needs of your employees. As technologies and processes evolve, so too should your performance reviews. It may be that your performance reviews need performance reviews. Your business may benefit more from ongoing feedback than bi-annual reviews. You might choose to create more specific performance metrics, or lump them into broader categories. You can save time with employee review software or switch exclusively to verbal one-on-ones. The clay is yours to mold. Here are more thoughts we compiled on Rethinking Performance Reviews earlier this year.
Like any tool, the performance review is only as effective as the manner of its usage. By adapting it to the goals of your business, it is the ideal stage to bring out the best in individual employees, address minor issues before they become malignant tumors, and keep the entire organization on track to achieve success.
If you need help with any HR issues, please reach out. We work with businesses throughout the state of Texas and we'd love to help you.