What Type of Employee Performance Review Works Best

An employee performance review can be very valuable to both employees and employers, providing encouragement and realistic goals.

Key points:

  • An effective employee performance review can boost productivity and morale—while a poorly executed review may do the opposite
  • Goal-setting and regular feedback are important parts of a meaningful performance review process
  • Talent management software like SentricHR streamlines performance reviews, with customizable templates, real-time goal tracking, and employee engagement

An employee performance review, when done well, is deeply valuable for both employers and employees. Constructive feedback can improve employee performance, ensure realistic goals are attained, encourage professional development, and diffuse conflicts before they begin. Regular recognition motivates and engages employees.

Unfortunately, performance reviews don’t always achieve those goals. Surveys indicate that at least 75% of HR professionals—and maybe up to 90%—say the traditional annual performance review does not accurately measure performance. Those formal reviews are also deeply disliked by many employees, driving up to 25% of employees to tears without resulting in notable improvement. In fact, only 14% of employees say an annual performance review has helped them improve. 

In this blog post, we look at options for effective performance reviews, with tips to help you offer actionable feedback and appropriate recognition—without the tears.

What is an Employee Performance Review?

During a performance review, an employer or manager offers an evaluation of an employee’s overall work contributions. The review usually:

  • Recognizes success
  • Offers feedback
  • Identifies strengths and areas for improvement
  • Discusses training, promotion, and/or compensation  
  • Checks in on progress towards previous goals
  • Sets goals for the future (see the section on goal setting below)

The Employee Performance Review Process

The objective of the performance review process is to evaluate an employee’s progress towards established goals. It’s a chance to reflect on recent achievements (and things that might have gone wrong), and look to the future to plan professional development, changes to compensation, and career progression.

Goal Setting  

Goal setting is the foundation of any performance review process. Goals are the expectations and benchmarks performance is evaluated against; they must be clearly communicated to ensure fair and meaningful performance reviews.

Goals may reflect an employee’s job description (such as a sales objective or process improvement). They may be training or educational goals, or project-specific deadlines. Follow SMART (Specific, Measurable, Actionable, Relevant, Time-Bound) guidelines to establish well-defined objectives.

Some other points to keep in mind while goal setting:

  • Collaboration. Engage employees in developing goals to ensure both employer and employee have a shared understanding of expectations.
  • Flexibility. Revisit goals often and be ready to revise in light of changing circumstances, unexpected progress, or obstacles.
  • Strategy. Agree on a plan for how to attain each goal.
  • Evaluation. How will you measure success? Establish benchmarks during the goal setting dialogue.

Regular check-ins will keep goal achievement on track and identify potential issues early—but they can be tough to fit into busy schedules. Talent management software can help HR, management, and employees set concrete goals, monitor deadlines, and track progress in real-time.

Continuous Feedback

Establishing a continuous feedback loop is valuable to both the employee and the organization, and will reduce year-end surprises.

Ongoing or “fast feedback” fosters a culture of open communication. Employees who receive useful feedback at least weekly are four times more likely to be engaged than employees who receive less-frequent input. They are also more than three times as likely to be motivated to do outstanding work.

How to make feedback a habit

Most employees—including 72% of those under age 30—would like more frequent feedback than they currently receive. Consider:

  • Daily or weekly check-ins. These can be team meetings as well as one-on-one conversations.
  • Ongoing dialogue. Informal conversations between managers and employees can help deliver meaningful feedback without the intimidation of a formal meeting.
  • Celebrate successes in the moment. Take a moment to acknowledge achievements before moving on to the next task.

Different Types of Employee Performance Reviews

In addition to continuous check-ins, a scheduled one-on-one formal performance review is a useful opportunity to discuss long-term objectives and compensation, and have a frank conversation about any challenges.

Below are some types of performance reviews to consider. In all cases, be sure to document feedback—both positive and negative—in a shared digital space. Keeping track of goals and achievements in a system like SentricHR will let employees and managers see previous and current reviews for complete transparency.

Year-end review

The traditional year-end review usually aligns with the company’s financial year-end and is an opportunity to re-align individual goals with the organization’s goals.

Creating and managing performance reviews for every employee can be time-consuming—using or customizing a ready-made performance review template can save considerable effort. Templates provide an outline for the review and can keep discussions on track. Entering goals and ongoing feedback throughout the year streamlines assessment and reduces the intimidation of an annual meeting.

Mid-year or quarterly reviews

Depending on the organization, scheduling two or more performance reviews each year can be beneficial to individuals and teams, especially for new hires or newly formed teams, or during times of uncertainty (such as during Covid-19 lockdowns). Regular reviews can foster consistent improvement, connections, and better morale.

Self-evaluation, team evaluation, and peer evaluation

Encouraging employees to complete regular self-evaluations can offer insight and understanding into how they perceive their performance. A self-assessment can also include space for the employee to evaluate their team, the team’s progress toward goals, as well as their peers.

Talent management software can simplify collecting and collating evaluation data from multiple sources.

Focused review

Instead of an all-encompassing performance review, you may choose to focus on a specific area of discussion, such as:

  • Compensation  
  • Goal-setting  
  • Professional development
  • Performance improvement

Simplify Performance Review with an HRIS

An all-in-one HRIS like SentricHR will help you manage performance. Ready-to-use and customizable performance review templates let you assess employee performance and track goals at any time. Employees can also access and complete performance reviews directly in SentricHR for full transparency throughout the year.

For more insight into how to design the best performance review process for your organization, read our post detailing 10 of the Best Performance Management Practices for Your Business.

To learn more about how SentricHR can help, schedule a demo today.


The Sentric Team

The Sentric Team

At Sentric, we help businesses make people management easier with industry-leading technology and standout support.

Sentric HR & Payroll Insights

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