What is a performance review?
Performance reviews are periodic processes in which you as an employer, or a manager, document and evaluate your direct reports’ work in a set of given time. These can feature either qualitative data, quantitative data, or a combination of both. An effective performance review recognizes both strong and weak areas of performance, provides solutions to some of these areas deemed to need improvement, and sets goals to achieve by the time of the next performance review.
The term “Performance Review” primarily refers to the documentation or analysis involved in evaluating an employee’s performance. However, as mentioned before, the ideal review is also a process. Therefore, the term also includes any meetings or discussions in relation to this evaluation.
Why is a performance review important?
Performance reviews are extremely useful for a company due to the potential impact that they can have. Through an effective review, a manager can successfully have an intentional conversation with an employee and help improve performance, and more importantly, keep a stream of feedback between the two tiers of hierarchy. Compounded with regular discussions about employee progress, an individual can feel much more satisfied in knowing how their supervisor views their work, and how they can progress.
When should a performance report be written?
Many managers often struggle in recognizing when to write a performance review. To properly identify when to write such a device, it is important to realize the concept of Recency Bias. Recency bias is defined as a cognitive bias that favors recent events over historic ones. An example of this would be how a lawyer’s final closing argument in court is said to be one of the most important moments in law due to it being the last, and therefore favored, event that the jury hears prior to being dismissed to deliberate.
To put this into the context of business, imagine that a worker has completed a very important project in January, with constant work through the rest of the year, and a below-average performance in December. Should a manager write this employee’s performance review in December, what would be the first thing to go through their mind? In most cases, it would be the latest event, which in this case would be the aforementioned poor performance in December. The report would probably focus on this, and therefore, would not be a good metric to evaluate an employee with. Therefore, it is extremely important to remain cognizant of this bias and recall the other tasks, in this case, the project completion, and add them to the review. A performance review that is clear of recency bias is much more reliable, and also more accurate.
Once you have identified the concept of recency bias, and have taken steps to ensure avoidance of such, you can write this review at your convenience. Performance reviews are best written at the conclusion of a financial or business year but can also be written more frequently as well to create a constant stream of feedback – for leaders using AIM Insights, the data is optimized for monthly reviews. Regardless of when this report is written, it should not be the sole way that an employee is evaluated. The key thing to remember here is that an employee has no way to improve without receiving feedback or constructive criticism. If someone doesn’t know that there is a problem, how would they be able to fix it? The same applies to the employee review. Provide feedback, whether it be through a Slack message, or a text, or even a chat over coffee. This way, an employee would not get blindsided by a bad review.
How should a performance review be conducted?
Ideally, a review is started from the very beginning of the period to be evaluated and defined by management. This boils down to recognizing what an employee has been assigned, and then what they are completing. Workforce performance management software such as AIM Insights can be used to help automate this process. The primary responsibility of the reviewer is to take notes throughout the entire period to ensure the best possible review. This helps with avoiding the aforementioned recency bias conundrum. As mentioned before, this review should be compounded with regular conversation or meetings, to allow for improvement. Once it is time for the actual written report, use benchmarks and performance indicators. In some businesses, it may be the number of sales, or the number of customers recruited. Regardless, quantitative data is objective, and can often assist in writing the rest of the report. Use thresholds and compare them to the employee’s progress to determine acceptability.
After this review is written, a meeting should be set up to discuss this with an employee, with prior delivery of the review. While this discussion may be difficult, it is important to recognize that this is to help improve performance, as well as employee mood. Remember, keep it constructive, juxtaposing both praise and improvement recommendations. With these tips, you should be well on your way to writing the perfect performance review. Best of luck!