Employee Performance Review - What Is It and How to Conduct It?
In large companies, employee performance reviews are often a standard practice, but in small companies, management may hesitate to implement them. Why does this happen and does the employee performance review make sense?
What Is an Employee Performance Review?
Periodic employee evaluation is one of the key tools that allow management and HR departments to thoroughly assess employees’ performance and identify any potential issues in the company. The employee performance review enables a thorough understanding of how an employee fulfills their duties and what their strengths and weaknesses are.
Unfortunately, many people perceive it as a control tool, which can introduce unnecessary stress and pressure. In reality, for employees, the performance review is an opportunity for development and advancement, but also for a salary increase or change in position.
According to experts from Vanderbilt University, its purpose is not to point out mistakes, but primarily to inform employees about their strengths and areas for improvement. Moreover, employee evaluation also serves as a motivational, developmental, and educational function, which translates into better overall company efficiency.
Why Is It Worth Conducting an Employee Performance Review?
Conducting a performance review provides a company with a wealth of valuable information and is a great stimulus for employees’ development. Here are a few benefits of regularly conducting employee evaluations:
Increasing employees’ productivity
Employee evaluations allow employers to identify areas in which the employee can increase the efficiency of their work. For example, an employer may identify that an employee is spending a lot of time on a less significant task that could be done successfully by an intern. By recognizing this issue, the supervisor has the opportunity to free up time and energy for a more experienced employee.
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- Employee Motivation
Appreciating and praising the work done by an employee can make them even more engaged and motivated, as they see that their efforts are recognized and valued. It’s important to praise and motivate subordinates, and periodic evaluation allows for doing so regularly and fairly.
- Increasing employee engagement
Employers who regularly conduct periodic employee evaluations show their employees that they are interested in their development and performance. This, in turn, leads to increased engagement in their work.
- Identifying training needs
The knowledge gained from the evaluation can help in developing training and development plans that will help employees improve their skills and perform at a higher level, resulting in greater profits for the company.
- Building a relationship with the employee
Dedicating time to conversation, appreciation, and jointly finding solutions based on the conducted periodic evaluation are a great foundation for building a long-lasting relationship between employee and manager. A strong relationship increases loyalty and positively impacts employee engagement.
What are the types of periodic employee evaluations?
There are many ways to conduct a periodic evaluation. One of the most popular systems is the so-called 90, 180, 270, or 360-degree evaluation. How do they differ and which one to choose?
- 90-degree evaluation
This is an evaluation where the employee is assessed only by their immediate supervisor. It is the simplest form of evaluation used in smaller companies where there are not many hierarchical levels.
- 180-degree evaluation
This is an evaluation where the employee is assessed by their immediate supervisor and by themselves. The employee assesses their own skills, achievements, and progress at work. This form of evaluation allows for a better understanding of the employee’s strengths and weaknesses.
- 270-degree evaluation
This is an evaluation where the employee is assessed by their immediate supervisor, by their colleagues, and by themselves. Team members evaluate their coworker, which allows for different perspectives and increased objectivity of the evaluation.
- 360-degree evaluation
This is an evaluation where the employee is assessed by their immediate supervisor, by colleagues, by subordinates, and also by clients or other external business partners. This form of evaluation provides comprehensive information about the employee and their impact on the business environment.
How to conduct a periodic employee evaluation?
Conducting an employee’s periodic assessment is a process that requires proper preparation and approach. Here are a few steps that will help in conducting an effective and valuable periodic assessment of the employee:
- Create a periodic assessment template
Before starting the first conversation, make sure to prepare a periodic assessment template in your company. To conduct an employee evaluation, a specially profiled survey consisting of open and closed questions will be needed. It should include questions about knowledge, time management, work organization, hard and soft skills, predispositions, as well as the motivation of the employee. - Prepare for the meeting
Before conducting a periodic assessment, it is worth thoroughly analyzing the employee’s work results, the goals defined in the previous period, and any issues that may have arisen during work. - Conduct the conversation
Have a conversation with the employee to discuss their achievements, progress, as well as weaknesses and areas requiring improvement. Provide the employee with feedback on their work from the previous period, and try to understand what their professional goals are and how you can help them achieve them. Remember that the conversation should take place in a friendly and comfortable atmosphere.
In conclusion, conducting an effective periodic assessment of the employee requires preparation, empathy, and openness to a conversation with the employee. It is important to remember that an employee evaluation should be treated as a process that helps in the development of the employee and the achievement of organizational goals.
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