The Pros and Cons of Employee Performance Reviews

Employee performance reviews are important management tools. They can be used to address problems, praise good performances, and receive essential feedback. Although there are many benefits to reviews, there are also some drawbacks. Planning and preparing allow you to make the most of these communication opportunities and avoid potential pitfalls.

Benefits of Employee Performance Reviews:

Employee review can be excellent PR. Employees who feel they have an opportunity to voice their thoughts, opinions, and recommendations are more invested in their company. They feel more valued, and thus, work harder, reduce turnover, improve productivity, and contribute to your business growth. An employee may even share a great idea or lead you to one of your own.

One of the most important benefits of an employee review is the chance to begin resolving problems. Remember to review employees’ performances and statistics beforehand. You may be disappointed if you simply ask the individual if they have concerns; you must take the lead if you want the review to be to your benefit. Don’t waste the opportunity for genuine discussion of employee performance and attitudes.

Employee performance reviews, conducted well, can provide you security in the case of future firings or disputes. Take notes during the review about any problems discussed as well as your suggestions for improvement. If you ever find yourself disputing the terms of a firing or disciplinary action, you can better discuss (and prove) the identification of issues and your attempts to improve the situation.

Finally, employee performance reviews keep you informed about what is happening in your company or department. You will gain a better understanding of events, issues, and even company culture you may have otherwise missed.

Drawbacks to Employee Performance Reviews:

There are few drawbacks to conducting employee performance reviews. The cons generally fall into two basic categories: (1) the effort and time it takes to set up and conduct reviews and (2) mistakes made during reviews, which lead to negative outcomes.

It is rarely a mistake to conduct employee reviews, but they may be held too frequently. You might do reviews quarterly or biannually, with different degrees of formalism. Make sure you know the right approach for your company. Random or too-frequent reviews mean less preparation and more wasted time.

Employee reviews can be stressful on both sides, but it’s you who has to gather information and hold sessions. Conducting proper reviews requires a significant amount of effort, but this is a small negative compared to the benefits.

A common negative outcome is a temptation, usually found in inexperienced managers or supervisors, to be too kind in the review. It is important to point out employees’ strengths, but glossing over serious problems leaves you worse off than if you never had the review at all. Employees will not correct mistakes, may feel that you’ve wasted their time, or doubt your authority.

There are few cons to conducting reviews. Still, there are mistakes to be made that may damage your position or relationships with employees. Avoid these issues and you can reap the benefits of performance reviews to improve your business.

How to Prepare for Better Employee Performance Reviews

Employee performance reviews are an important part of effective management. Every business can benefit from the process.

However, advanced planning is needed in order to achieve results. You must prepare for the reviews and have a basic plan for conducting them. Performance reviews are most useful and beneficial if you take care to outline goals, plan topics of discussion, and consider potential difficulties.

Announcing performance reviews at least a week or two in advance will give employees time to prepare useful comments. It also commits you to the task and sets deadlines for your preparation.

Make a list of your goals for the meetings. Reviews are just an exercise even if you do not achieve anything. Many employers and managers dread reviews; you can at least make them worthwhile. Think of what you want to communicate to employees. Even more importantly, create a list of actual results that you want to see in the future during the discussions.

Look over any notes you have taken about particular employees, departments, or projects. Include customer comments or client surveys. These comments should complement harder statistics whenever possible. Statistics are more important to some jobs than others, but you should have some particular benchmarks for every position.

If you oversee and review a large number of employees, consult with supervisors and managers if possible. You may be unaware of small achievements or minor points that need improvement until you go through this process.

A performance review must consist of real communication. Employees may simply agree with everything you have to say. Encourage them to speak by asking open-ended questions. Ask them how they plan to improve their work, what they think about any new procedures or clients, and require them to meaningfully evaluate their own performance.

At the end of the performance review, you must discuss means for improvement. These should be fairly measurable actions the employee can take to improve their work. Even if they have performed very well, you can discuss their future goals and skill development.

Remember to review employees’ strong points and achievements. They may be unaware of a positive aspect of their work. This encouragement may promote positive behavior and make the employee more responsive to suggestions for improvement. It benefits you to have employees who feel they are noticed and valued. These individuals will contribute more to your company’s success than those who feel ignored.

It is essential that you take notes and create a record of the performance review. They will prove useful for future reviews as well as any possible disputes relating to problems discussed.

Careful, sincere listening can help solicit important information. A conversational atmosphere is more effective than one-sided exchanges and creates positive feelings.

Without proper preparation, employee performance reviews can have a negative effect on your business. If a supposedly thorough review ignores problems, the issues become more entrenched and difficult to manage. Employees may feel that they are not being listened to, resulting in less loyalty and less effort.

Take time to plan your reviews and you will benefit from the improved knowledge and communication opportunities they offer.