Performance Review Process

Ten Top Tips for Introducing a Successful Performance Review Process

The Performance Review Process is a vital tool to improve performance but is also useful for harnessing commitment from your employees. So, if you don’t have a Performance Review Process your employees are being held back and that could make the difference between the success and failure of your business!!!

If you do have a performance review process in place here are some questions for you to consider:

  • How do you make use of the performance reviews?
  • What are the goals of these reviews?
  • Are employees judged, trained, promoted, etc. by objective data?

Performance Review Process

Performance Review Process (460 x 460 px) (2)There are various different terms used for the process, such as ‘staff development review’ and ‘individual performance and development review’ but whatever the system is called it has a certain amount of documentation that goes with it and usually involves a formal interview/discussion once or twice a year.

Effectively reviewing an employee’s performance involves looking back at past job performance and then looking forward into the future with a view to improving future performance. The overall objective should be to help each employee to maximise their job performance for the joint benefit of the employee and the business.

Employees need to be challenged and developed – what was acceptable performance one year may not be acceptable now, as the company keeps raising the bar to excel to higher levels of performance.

Managers also need to recognize that a performance review is not a standalone entity to be dreaded as it approaches. Rather it should be viewed as simply a part of an ongoing conversation and an entire performance management system.

If you consistently and regularly review your employees performance you will:

  • Ensure each employee understands what is expected of them in their job
  • Provide each employee with the opportunity to discuss any problems or obstacles that they have encountered in trying to carry out their job
  • Identify areas in the job where improvement may be needed
  • Let each employee know how they have achieved against previously agreed objectives
  • Help each employee set realistic plans for further development within your business
  • Agree training and development plans for the forthcoming year
  • Clearly identify objectives for the future so each employee is working towards your business objectives and goals
  • Outline clear expectations so little time is wasted on mundane tasks
  • Make your employees feel appreciated, reducing employee turnover

The performance review process should establish priorities and goals that reflect not only the needs of the individual but also the wider needs of the business.

Integration is easy, performance reviews become solid and employees really benefit from new learning experiences. It takes the subjectivity out of the equation, and provides managers with quantifiable and measurable data.

Top Tips for Introducing a Successful Performance Review Process

A successful performance review process is perhaps the most effective method of keeping each employee on track and working towards fulfilling the aims and dreams you have for your business.

  • Keep it Simple
    My first piece of advice to any business owner who is considering introducing a performance review process is to keep it simple! In my experience complex processes introduce a greater risk of failure. Simple systems can be highly effective, they are easier for managers to understand and implement and are more transparent and acceptable to the employees being reviewed.

    For a performance review process to be successful the aims of your business must be clearly defined and each employee should have their role and responsibilities clearly described. The objectives of each employee should be to ensure the aims of the business are achieved and the overall aim of the performance review process is to keep each employee on track to achieving their objectives. It is essentially a monitoring and adjusting exercise, not a vehicle for criticising or evaluating employees, and employees need to be convinced of that if the process is to work as it should.

  • Link to Other Management Processes
    The review process must form part of your business planning cycle. Timing is essential. You cannot make decisions on paying for training and development if you do not have your budget in place or your business plan in good order. Other initiatives you may need to link to are: Investors in People, customer charters and quality awards.
  • Involve the Right People
    An employee’s immediate manager is by far the commonest source of a reviewer. Sometimes a more senior manager conducts the review, or at least takes some part in the process and signing off. Because of the level of removal from day-to-day contact, the senior manager can potentially be more objective; on the other hand there can be disadvantages such as lack of immediacy, first-hand knowledge and the ready ability to follow up actions.

    It is quite common to use self-assessment for input to a performance review discussion. Self-assessment encourages self-analysis, though it is rare on its own, with no input from others.

    To obtain a wider perspective, external assessors can be used but due to the costs involved, external assessment will usually only cover key positions or individuals.

  • Link Objectives to the Aims of the Business
    You are likely to have well published aims, such as market share and profit levels, but there will be other unpublished aims that support those overall goals, such as how you plan to meet changing market needs. All these aims need to be taken into account when setting objectives for employees.

    Employee’s will therefore have measurable and attainable objectives that are essential elements of the business plan. For the employee to be truly engaged and motivated to achieve their objectives they need to believe in the importance of the aims and to accept ownership of them, a situation that can best be achieved by discussing and agreeing them.

    As a result Managers will control better focussed people who understand the critical elements of their jobs, will work towards them without needing constant supervision, will not allow themselves to become bogged down in non-essential tasks, and will not drop all their problems on their manager’s desk. Each employee will fully understand the importance of their role in the business, will be helped to fulfil their goals and will gain satisfaction from doing so.

  • Set Clear Objectives
    It is important that the objectives are clear, open and demonstrate criteria that are performance-based and fair. Employees and line management should feel a sense of ownership for the scheme. People need to feel free to talk about failings and disappointments and be prepared to accept constructive criticism. They also need to feel that goals are realistic and attainable.
  • Frequency of Reviews
    Feedback is not something that should happen in isolation, it is a continuous process that should be given throughout the working year. It should be an extension of the day to day management and supervision of your employees. Dealing with accomplishments and challenges as they happen ensures your employees receive positive encouragement as well as corrective coaching immediately. Then when it’s time for the next formal review meeting there are no surprises and the conversation can focus on how the employee has grown and look forward rather than concentrating heavily on the past.

    The frequency of your review meetings will be determined by your specific needs, many businesses choose to hold a formal meeting once or twice a year, with interim reviews quarterly or even monthly where the business is changing quickly.

  • Measure Progress
    The measurement of progress is made easier if each annual target is broken down into milestones, for example plan ready by end January, mock-up of the new product by end February, prototype ready by end May, testing complete by end August and so on. At each review meeting the employee’s actual progress should be compared with the milestones. If the planned level of progress has not been achieved the reason should be identified and appropriate action taken. This may require changes to be made in the production process, the information system or the target itself, or training or better support for the employee. If a series of shortfalls suggests lack of application by the employee, then a session of counselling or ultimately disciplinary action may be appropriate. Conversely, if progress is as planned or better, an analysis should be made to determine whether anything can be learned and used elsewhere in the organisation. Carrying out reviews in this way is a valuable learning experience for the business.
  • Include an Appeal Stage
    An appeals procedure to a more senior manager should be available to allow employees to appeal against their assessment. In practise, if the appeals procedure is used frequently by employees, something is wrong with the climate in which the review process is operating.
  • Keep Records
    While an effective review process doesn’t need paperwork, simple minutes from the review meetings can be useful as they will serve as a record of targets and progress towards them.

  • Train Your Managers
    Everyone who is to review another employee must not only be convinced of the value of what they are doing but also the effect it may have on the other person and, therefore, must be trained to manage the process competently. A reviewer must apply skills in both interviewing and counselling in such a way as to inspire the employee and to some extent this may be taught in classroom mode. However, the knowledge acquired may only be turned into skill by practice by, for example, a full day of supervised one-to-one interviews with colleagues.


  • Consider carefully your purpose in appraising employees
  • Convert your business aims into individual employee targets
  • Determine who is to review whom
  • Convince everyone of the value of the process
  • Train reviewers thoroughly
  • Set a structure and timetable of review meetings
  • Consider producing a form to guide reviewers and record progress
  • Regularly audit the process and make appropriate improvements
  • Keep it simple — and keep it going.
Library of Essential HR Business Documents
Ready To Go HR Department - policies imageA subscription to my Library of Essential HR Documents provides a ‘Ready To Go HR Department’ that offers simple step by step advice to common HR problems. I like breaking down processes into simple easy to follow steps and have check-lists and templates for absolutely every HR situation you can think of. My easy to follow flow charts, meeting scripts, check-lists and template letters ensure everything is done properly, efficiently and compliantly in a professional, friendly and knowledgeable way.

When you join you will receive instant access to:

  • Policies – clearly written and communicated policies are your best defense against tribunal claims.
  • Flowcharts – provide step-by-step guidance to key aspects of HR.
  • Forms and Letters – are templates with clear prompts were text should be added.
  • Meeting Check Lists – provide a reminder of the essential points to be covered in the particular situation.
  • Q&A’s: provide practical solutions to common HR situations.

The Performance Review folder contains guidance and resources to help you manage annual formal appraisal meetings with your employees. I provide a model Performance Review Policy and two template forms which can be offer a basic or complex approach to performance review meetings which you can adapt to suit your requirements.

Ten Top Tips for Introducing a Successful Performance Review Process

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