Annual Reviews – a powerful tool if used properly


We conduct annual reviews, how do I make the most of these?

Annual reviews, if done correctly, provide an opportunity for managers to recognise work well done and to identify areas for growth and development in their staff.

The reality, however, is that managers and staff usually do not give annual performance reviews the correct time and focus. Many see these reviews as a Human Resources function; something that is not their responsibility. Staff may see them as a waste of time; not linked to their career prospects of compensation. Follow these steps to ensure that you and all your staff make the most of the performance review process:

Ensure that everyone understands why performance reviews are done. The most basic reason is to allow employers to manage the performance of their staff in a formal, documented way. This enables them to follow legislative requirements in the event that they want to exit someone from the organisation.

At a more sophisticated level, performance reviews provide an opportunity for staff to take control of their careers. They have an opportunity to understand their strengths and weaknesses and to discuss how the former can be leveraged and the latter can be mitigated. They have a chance to map their development and career paths in consultation with their managers. You need to make sure your staff appreciates that performance reviews form part of the people management toolkit that allows them to strategically manage their staff. It is not just another administrative, box-ticking exercise.

Solicit feedback from all levels and areas of the business about an employee’s performance. This is called a 360 degree review: the employee should complete a self-evaluation, his peers should assess his performance and his superiors should do the same.

Realistic and accurate self-evaluation is a critical skill; employees need to be able to reflect on their performance not only during annual reviews but every day. This will allow them to regulate their behaviours throughout the year; to get help where needed and to promote themselves when they have done a good job. Peers often see behaviours that managers might be excluded from seeing. This insight, along with the views of the manager, helps to provide a complete picture of an employee’s performance.

Ask specific questions that measure performance against pre-agreed standards. These standards should be linked to job descriptions and employee grades/ levels and should be applied consistently across the business. It is easier to analyse and compare performance data if you use rating scales.

For example, the Likert Scale is a five (or seven) point scale which is used to allow the individual to express how much they agree or disagree with a particular statement. Your performance review question might ask a reviewer to state the how frequently a person displays particular behaviours expected at his level or in his role. It may ask how strongly a reviewer agrees with a statement about the individual’s performance. Insist the reviewers give detailed examples to justify their assessment of an individual’s performance. This allows you to contextualise the feedback.

Everyone in the performance review process needs to know how to give and receive objective and constructive feedback. This starts with a mindset that feedback is about growth; it is an opportunity to improve and is not about breaking people down or making them feel inferior.

Those giving feedback need to have good intentions and those receiving feedback must not get defensive when they hear difficult truths about how they behave. One’s ability to communicate effectively dictates how successful this feedback process is. Follow the 5 C’s of effective communication at all times during the feedback process; what you say needs to be clear, concise, correct, courteous and complete.

The performance review needs to be action-oriented. Once feedback has been given, an action plan needs to be developed. How will strengths be leveraged to further develop them in the individual and to better serve the business? How will weaknesses be turned into development opportunities and therefore overcome?

This plan needs to be time-based and should clearly outline what needs to be done and who the key stakeholders are. It should also be made clear that the execution of the plan is the employee’s responsibility. Individuals need to take responsibility for their performance, their development and their careers and this is a good place to start.


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