Everything you need to run an effective performance review

Performance reviews can be hugely beneficial to both employees and managers. But with 49% of workers saying their company’s performance reviews feel like a box-ticking exercise, it’s important to know how to get the most out of these check-ins – for everyone involved.

Whether your company follows a structure, or you’re able to conduct reviews how you choose, these tips can help you (and your employees) get the most out of the experience.

Why are performance reviews important?

First, it’s important to understand the ‘why’ of reviews and how they’re beneficial. In the words of Chris Regan, Chief People Officer at MatchBox Exchange:

“Performance reviews are designed as a check-in for both managers and employees, with the purpose of reviewing an employee's performance against their KPIs or position description.

“A good performance review process will leave the employee with an understanding of areas they are doing well in, and a clear plan to improve in areas in which they are still developing.”

As well as giving employees the chance to celebrate wins and discuss areas of improvement, Courtney Gibbs, Head of People at Whispir, adds that performance reviews can help deliver a bigger picture view.

“Performance reviews provide useful feedback about job performance and align an employee's role with the company's overall vision.

“This helps employees to better understand the purpose of their work, which can be beneficial in driving motivation and giving them more context to work they do.”

Preparing for a performance review

For a performance review to be valuable, preparation is key. Gibbs explains that you and your employee should both come to a performance review prepared with notes and talking points, including:

  • documentation from past reviews
  • previously set goals
  • notes of interest from prior check-ins, and
  • feedback from coworkers and customers, where relevant.

Having a shared agenda that both the employee and manager have helped to shape, Gibbs says, will “help set a positive and constructive tone for the meeting, and encourage employees to come to the review with questions and a growth mindset.”

This kind of preparation shouldn’t happen only in the lead-up to a review, though. Regan says managers should also have feedback-driven conversations with their employees throughout the year.

“Good managers know that continuous feedback is key, and a 'no surprises' approach is ideal for a helpful review process,” she says. “Saving up examples of where employees can improve for a once-a-year chat is demoralising and disengaging. Instead, it’s a much better approach to deliver feedback early and often.”

Tips for during the performance review

Many employees dread performance reviews, so setting the right tone from the get-go can make a difference.

Gibbs recommends focusing on the value this process provides for the employee.

“Emphasise that the goal of a performance review is to solve problems and identify ways to help both the employee and the company grow,” she says. “A review should be a two-way conversation, and it should be equally beneficial for both parties. During the review itself, you can further exemplify this by ensuring you listen as much as you speak.”

Regan agrees the focus should be on what your employees have to say.

“You can start the review by summarising what to expect from the upcoming conversation. This can include you encouraging them to do the majority of the talking and to take you through what they think they are doing well in their role and any areas they feel they can improve on."

“After all, the review is all about them.”

Steps to take after a performance review

Taking action after a performance review is another essential step to making the most of it. For example, if someone has highlighted an area they want to learn more about, you might organise training for them.

Regan says a development plan can help you manage and act on these crucial next steps.

“It's great practice for managers to document everything discussed and then share this with the employee to ensure they are on the same page,” she says. “From there, you can create a development plan for any areas for improvement or continued growth.

“The development plan should become a living, breathing document you can both refer to as part of the regular check-in meetings and ideally reviewed quarterly to assess progress.”

As Gibbs explains, a performance review is just one step in what should be an ongoing process.

“Managers and employees should incorporate these discussions as part of their 1:1 check-ins,” she says. “Managers can also encourage an open-door policy to help employees feel more comfortable talking about potential issues, improvement, and development, rather than waiting another 6 or 12 months to refocus on growth.

“Creating a culture of ongoing feedback can help improve your company even sooner.”

Source: Independent research conducted by Nature of behalf of SEEK, interviewing 4000 Kiwis annually. Published May 2023.

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