To evaluate performance within your organization and determine what your employees need to succeed, you need a tried and true process. The solution lies in performance reviews. The annual performance review is a cornerstone of performance management programs. As performance strategies have evolved, so have the needs and purposes of performance reviews.
In this article, we will share some essential information about performance reviews and explore different types of performance reviews and their benefits.
What is a Performance Review?
A performance review is a fundamental way to leverage talent, understand needs and opportunities, and gather the necessary information to connect with employees and develop larger organizational strategies. They play a central role in empowering employees by helping them reach their full potential.
Definition of a Performance Review
A performance review, also known as a performance appraisal, is a one-on-one, two-way conversation between a manager and an employee about performance impact, development, and growth. It is a crucial element in the continuous performance management approach to evaluate and drive success for the employee, the team, and the organization.
Types of Performance Reviews
There are many different types and methods of performance reviews. For simplicity, we can categorize them into two general types: multi-rater and single-rater.
Regardless of what you choose, the performance review process should fit your organizational culture and be relevant and meaningful to both the employee and the manager. After all, no one wants to participate in a disengaging or worthless process. Here are some types of performance reviews organized by:
Number of Raters
Rhythm or Frequency
Topic or Focus
Multi-Rater Performance Reviews
Here are some examples of multi-rater performance reviews:
360-Degree Performance Review
At the heart of a 360-degree performance review are evaluative feedback loops. However, 360 reviews are most effective when built on a broader foundation of trust. Employees should walk away with clear, actionable steps forward, knowing what to continue and what to improve for future impact.
Benefits of 360-degree performance reviews include:
Diversifying and measuring performance data
Providing unique perspectives
Showing leaders where they can improve
Self-Evaluation
The purpose of self-evaluation is to enhance mutual accountability, engagement, and alignment between the manager and the employee. The manager gains insight into how to better coach and guide the employee, and the employee can discuss their performance with their manager’s perception in mind.
Reflection is a critical element of growth and change, and self-evaluation is a crucial opportunity to assess past challenges and successes. It also sets future goals and priorities for continued development.
Peer Review
Managers cannot be everywhere all the time (nor should they be). Successful organizations position managers as coaches or facilitators. When teams are strong, peer feedback improves. Peer feedback is important because:
Peers have unique perspectives to share insights
Recognition means more when it comes from peers
Peers can often be confidants or trusted mentors
Colleagues may know how to identify and share feedback so that it is well received
Upward Feedback
When employees and leaders approach feedback with a healthy mindset, upward feedback can help both parties understand that they are in it together and help each other improve. This helps build a more trusted relationship where employees feel comfortable discussing what is going well and what is not.
Performance feedback can sometimes be frustrating for employees, especially if they don’t get a chance to provide feedback in return. It’s refreshing to be asked to provide feedback to your manager or a responsible person, and upward feedback is crucial for continuous dialogue about performance.
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Team Performance Review
A team performance review helps managers assess and coach performance within the context of the team. It provides a clear picture to help identify strengths, development opportunities, goal adjustments, and additional potential.
Team performance reviews can help:
Understand what is important to the team
Set goals aligned with individual and business needs
Foster shared ownership and accountability for priorities and performance
Show support for overall team performance and dynamics improvement
Continuous Performance Reviews
Continuous performance reviews address what is happening in the present moment. The speed is essential as it allows managers to coach on what matters now and provides employees with the space to accelerate and change. When employees adjust their performance before it’s too late, they become more successful, and so does your business.
Here are some examples of continuous performance reviews based on annual, semi-annual, quarterly, and monthly rhythms:
Annual Performance Review
There is a significant role for the annual performance review, but not in the traditional sense. Think of lengthy forms, forced rankings, and over-the-top grades. The modern approach provides the opportunity for managers and employees to look back and celebrate the value of a year’s worth of contributions, challenges, growth, and achievements.
This conversation should always be a summary, focusing on the big picture. It’s also a great opportunity to reflect on where to focus on long-term goals and priorities in the future. Set your agenda to review all goals and milestones already achieved and avoid introducing new information or behaviors that cannot be changed or adjusted.
Mid-Year Performance Review
If monthly or quarterly performance reviews are not feasible for your organization, consider a mid-year rhythm. A mid-year performance review still allows for adjustments and corrections for the rest of the year, creating touchpoints to discuss key milestones and progress. This is also the time for performance assessments.
Quarterly Performance Review
Regular performance check-ins are ideal as they create a mindset that development and progress are more important than perfection. At a minimum, quarterly check-ins provide an ideal rhythm for a continuous performance review approach that focuses on the future.
Monthly Performance Conversations
A monthly approach to continuous performance conversations provides a shared framework for both parties to build an agenda around goals, opportunities, obstacles, and decisions. This facilitates clear, practical, relevant, and continuous discussions.
Thematic Performance Reviews
Performance reviews should not be isolated and rigid. These conversations should be flexible and encompass all aspects of overall employee performance.
Here are some examples of thematic performance reviews:
Professional Development
Professional development should be a regular part of performance reviews. Employees who develop and grow feel like they are moving forward, which helps boost performance. This type of individual success often aligns with greater performance contributions to the organization. Professional development discussions should align with individual desires and needs.
Behavioral Change
The old adage of doing the same thing and expecting a different result applies to performance reviews. Traditional performance processes will not motivate, inspire, or drive performance (or engagement).
Organizations that are not flexible, adaptable, or innovative will cease to exist. Employees need to feel comfortable and successful in this type of environment. Any performance review approach should aim for behavioral change and continuous forward momentum. It should positively impact:
What should change
What should continue
Where to focus next
Compensation Records
Compensation records are performance reviews that set expectations. These types of discussions can serve as catalysts but should be handled healthily. They should:
Create transparency for employees, managers, and leaders
Occur regularly (not just when employees get or don’t get a raise)
Focus on pay understanding and addressing any questions or concerns
Goal Setting
Setting and discussing goals is crucial for creating focus, setting priorities, and enhancing employee performance. Reviews with good goals help employees progress and gain momentum. When setting and evaluating performance goals, ensure they are:
Set at the right level: Noble goals can create too much burden, and easy goals may lead to decreased motivation.
Measurable and meaningful: Meaningful goals help you (and your team) know if you’re on the right track.
A rallying point: Goal-setting reviews create built-in moments for team and individual transparency, alignment, reflection, and evaluation.
What Role Does DocSuite HR Play in Performance Reviews?
DocSuite HR plays a vital role in employee performance reviews by providing a central means to collect and track performance data and evaluations. The system can record personal goals, contributions, and monthly reports. It also offers features for providing continuous feedback and documenting outcomes for use in promotions and future development processes. Its features include:
Data Collection:
The system helps gather performance data from various sources such as direct supervisor evaluations, peer reviews, and self-assessments.
Goal Setting:
The system can record and track personal goals for each employee, making it easier to assess their progress towards achieving those goals.
Continuous Feedback:
The system provides a means for continuous feedback on employee performance, whether positive or in need of improvement, through features like one-on-one conversations and periodic performance evaluations.
Outcome Documentation:
The system can document performance review outcomes, including evaluations, discussions, and development plans, making it easy to refer back to them in future promotion and development processes.
Performance Analysis:
The system can comprehensively analyze performance data, helping identify trends, existing issues, and developing strategies to improve overall team performance.
Facilitation of Promotions and Development:
The system serves as a tool to support promotion and development processes by providing reliable and comprehensive data on employee performance and their potential.
Enhancing Transparency and Fairness:
The system helps enhance transparency and fairness in performance review processes by providing a unified framework for evaluation and treating all employees equally.
Effective performance reviews require a solid foundation. Start using our free performance review templates to make your conversations the most efficient yet.