With the end of the financial year fast approaching, many employers are starting to think about their annual staff performance reviews. Although performance reviews can occur at any time throughout the year, many employers choose to do them after 1 July, once their annual budgets have been finalised.

Why are performance reviews important?

Traditionally, performance reviews were developed as an annual tool used to drive staff performance by evaluating past performance. The modern approach to performance reviews occurs on a more regular basis, either quarterly or monthly. Although there is an element of reflection on past performance, there is a strong focus on driving and improving future performance. The reviews typically involve a conversation between the manager and an employee about the employee’s performance, development, and growth.

Given the amount of change a business can experience within a one-year period, it makes sense to check in with staff more regularly and ensure that targets, goals, achievements, and any performance concerns are addressed quickly and often to facilitate employee success. These conversations can be formal or informal but either way, should be documented and retained in a confidential location. In the unfortunate event that an employee is not performing to an appropriate level, this documentation will demonstrate that the employer has acted reasonably.

Regular formal or informal check-ins with your staff are important as it helps:

  • Employees to understand exactly where they stand and what to do to improve
  • Managers to provide real-time coaching and help overcome obstacles
  • Businesses to benefit from a constant flow of data on individual and team performance

What items are addressed in a performance review?

Regular informal or formal performance meetings need to be a conversation with equal contribution from both the employer and the employee. Whilst there isn’t a “one-size-fits-all” approach to performance meetings, it is important that they promote trust, reduce anxiety, create clarity, and showcase alignment. In addition to discussing the employee’s performance, these meetings should also cover:

  • Career growth and development
  • Engagement challenges
  • Alignment to business goals
  • Changes or key messages
  • Recognition
  • Peer feedback
  • Customer feedback

Key things to consider when preparing for a performance review

Performance reviews can provoke anxiety for both employers and employees. If consistent performance feedback has been provided, there shouldn’t be any surprises to either party. If either party is surprised by the information being discussed, this may be a sign that there is a lack of communication and transparency within the relationship.

Some key factors to consider when preparing for a performance review include:

  • Focus on the future – The past cannot be changed and although important to mention when issues arise, focusing on the past can be quite disengaging.
  • Be transparent and collaborative – Performance reviews can create a significant amount of anxiety for an employee. Involving the employee in the planning and preparation of the review can help reduce their anxiety.
  • Be objective – Gain evidence from a variety of sources including customer and staff feedback, reports, and goal progress notes. Every query should be backed by evidence, not by an individual’s personal opinion. This applies to both positive and constructive feedback.

How to prepare for a performance review

Managers should approach all performance conversations with thoughtful preparation by:

  • Synchronising performance expectations, employee goals, and goal progress
  • Gathering factual data and examples
  • Preparing notes and an agenda
  • Finding an appropriate time, location and venue for the discussion
  • Setting expectations for the employee

The key thing to remember is that there should be no surprises from either the employer or the employee during a performance discussion. If strong lines of communication are maintained, the experience will be less stressful for all concerned, will help facilitate a trusting relationship, and will enhance overall performance and satisfaction.

Check out our previous blogs, Our Top 10 Tips for Effective Performance Reviews, Why Communication is Important in Managing Poor Performance, and How to Give Negative Feedback to Employees for some more information about managing employee performance.

If you’re looking for assistance in preparing for staff performance reviews, don’t hesitate to get in touch with our team, via the chat box here or calling us on 08 6150 0043.

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