Does your company need a performance review program?

Performance reviews are one of those topics that most managers like to avoid. But at some point, as your company grows, it’s a good idea to think about establishing some sort of performance review system. Performance review programs, if done well, can help identify key performers, how bonuses and raises should be distributed, and even who may be ready for a promotion. But a good performance review program should be much more than those formal, annual reviews managers and employees dread attending. In fact, at most organizations, performance reviews are not done enough, and done poorly at that.

The goal of a performance review is to give workers feedback on what they are doing right and discussing areas that need improving. Often times, the hardest part of the review process is simply knowing where to start. Try giving the employee the chance to start the conversation. Most likely they have a lot to say. With minimal questioning and direction, you should be able to uncover a wealth of information regarding their opinions of their job, the workplace environment, and goals for the future.

When it comes down to giving feedback and constructive criticism, it’s best to use adjectives that are meaningful and measurable, rather than simply using good, excellent, or poor. Those evaluations are too generic for an employee to really get useful feedback on their work.

For companies that have heavily project oriented work, annual or quarterly performance reviews are giving way to review meetings at the end of each project, transitioning from performance review to performance management. Ongoing year round conversations can be more productive, as the manager is able to give feedback to the employee in the moment, while the situation is still fresh in everyone’s mind. The HR Council for the Nonprofit Sector defines performance management as “More than just an annual performance review, it is the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals.” This type of management is especially useful for companies with large Millennial workforces, as they grew up receiving constant feedback from their parents, teachers, and mentors. They want timely, frequent, and specific feedback that will ultimately help them improve their skills in the future.

Whether it’s once a month or at the end of a project, employee review sessions should end with the manager providing direction and guidance on where to go for the future. An action plan should be agreed upon between the employee and the manager to work on improving their weaknesses, while maximizing the value of their strengths. And most importantly, as a manager, you need to remember to follow up with the employee on a regular basis to best manage their performance.