What business managers need to know about effective employee performance reviews


Conducting effective employee performance reviews
A busy manager dealing with the daily cut-and-thrust of business can inadvertently disconnect from the people they need most, making performance reviews an opportunity for effective engagement.
In the words of Henry Ford, ‘Coming together is a beginning. Keeping together is progress. Working together is success’. Working together is exactly what a performance review is all about.
Effective performance reviews allow both parties to sit down and get an understanding of where the business is heading, and more importantly, how the employee can contribute, as well as an opportunity to address issues of under-performance, and areas for improvement. Allocating one-on-one time with employees is an implicit statement of confidence in their value to the business.

Be mindful of setting the right environment

Remember when performance reviews were limited to senior executives of larger companies, often conducted by members of a board? Times have changed and most employees these days are given formal evaluations, at least once a year. Then why does the mere mention of such a process elicit unfounded fears from some staff?
Here are a few ideas to counteract this reaction:

  • Ensure an interruption-free, non-confrontational environment.
  • Always give plenty of notice.
  • If appropriate, allow a friend or colleague to sit in on the meeting.
  • Make the employee feel as comfortable and at ease as possible.


Celebrate, then recalibrate

People love to hear about it when they’re doing well and even ‘intangibles’, like a happy disposition, can be of value to a business. Point out an employee’s strengths in the first instance. What have they achieved? How have they improved since the previous review? How do their skills make them valuable to the team? It’s smart to start any meeting on a positive tone, and performance reviews are no different.
Then ‘recalibrate’ by addressing areas for improvement, setting realistic goals, and adjusting the employees’ performance measures to meet these goals.

Remember the adage – one mouth, two ears

Use your two ears to listen carefully to employee feedback. There’s no point in setting a strategic direction for the company if those charged with the day-to-day machinations aren’t on the same page. Ask open-ended questions and discourage ‘yes’ or ‘no’ answers.

Tips for managing the tough discussions

If under-performance has helped initiate the performance review, it can be a stressful time for both manager and employee. It’s normal for a manager to feel slightly uncomfortable raising difficult issues with colleagues, even subordinates.
There are many ways to approach tough discussions, such as:

  • Be clear about what’s expected in the role, and how the staff member is falling short.
  • Speak English – using terms such as ‘KPI’ or ‘ROI’ might be common shorthand for some, but that kind of jargon can be confusing and confronting to a person who is already under stress.
  • Identify what needs to improve, how it can be improved, and by when. Setting a deadline, and a pre-determined follow-up meeting date is critical to motivation and success.


Always look on the bright side

An evaluation gives both sides an opportunity to be heard. If a staff member is at a point of frustration, then the performance review allows them a chance to explain themselves and understand what’s required. A review can even foster a sense of inclusion that, without a one-on-one discussion, would not be possible to the same degree. Think of an evaluation as an opportunity to better get to know an employee you don’t get to spend much time with. After all, creating time to invest in staff is one of the smartest moves any organisation can make. Keeping valuable staff rewarded, motivated and loyal creates a culture that will ultimately benefit the business, even if the ‘bottom line’ can’t quantify it.
Effective performance reviews will bring sustainable results to your business. Learn to manage them well, and your employees will even start to look forward to them. Consider developing your business communication and management skills with a Diploma of Leadership and Management (BSB50420), or Diploma of Business (Leadership) (BSB50120).