What Is the Real Purpose of Performance Reviews?

Gina Deveney
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The annual employee review is a standard business tool used by most companies as a matter of practice. Most continue using this tool without questioning why. Though employee appraisals may continue in modern practice due to habit, they originated as a means of feedback and opportunity for promotion. Performance reviews, modified for the modern work environment, still offer the potential for providing feedback on performance and identifying areas of improvement.

In the past, employees tended to spend their entire careers with one company. In such an environment, the performance review process made sense. Every year, supervisors provided employees feedback directly linked to bonuses and promotions, and these reviews were used as external motivational tools.

As decades passed and working patterns shifted among various industries, the annual review process persisted. In today's workplace, very few employees enjoy decades of longevity. Most employees have the same employer for only a few years, so they might receive only a couple of performance reviews.

To restore the utility of the performance review, experts recommend revisions to the process. One such revision is incorporating a 360-degree review. In this type of performance review, several of the employee's co-workers submit anonymous reviews of the employee's performance. The supervisor compiles the feedback and provides it to the employee. An anonymous review by peers is often a more honest and representative assessment of an individual's work performance.

Another update to the antiquated review practice involves changes to the frequency. Attempting to recall a year's worth of successes and mistakes for each employee is challenging, if not impossible, for most managers. Human memory is flawed and likely to include only recent activity. Additionally, waiting until the performance review occurs to discuss a problem area does not help the employee or the company make improvements.

The employee review as an annual means of assessing an employee's past performance and future advancement with the company should evolve into frequent meetings with each employee to provide relevant feedback and support. Instead of conducting a review once a year, managers should review employees' performance on an ongoing basis. Managers can make feedback more relevant and timely by checking in with poor performers as needed, offering guidance or suggesting improvements. Managers should also check in with high performers regularly and extend the feedback loop. Rather than simply providing a one-way flow of feedback, managers can use these check-in meetings to learn about the employee's priorities, suggestions and feedback on management.

When employers retool the performance review to meet the needs of a company's culture and workforce, it can provide valuable opportunities for discussion of an employee's performance. Outside of the formal review process, though, managers should strive to provide regular feedback to their employees.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net



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