Performance review

A performance review, also known as a performance evaluation or appraisal, is a structured process where a manager assesses an employee’s work, celebrates successes, and identifies areas for development. These reviews are a core component of an organization’s broader performance management strategy, typically involving a discussion between the employee and their supervisor.

What Does a Performance Review Include?

Traditionally, companies conduct performance evaluations annually to determine if employees are meeting agreed-upon goals. Based on the outcomes, an employee might:

• Receive recognition through raises, bonuses, or promotions
• Be placed on a Performance Improvement Plan (PIP) if expectations are not met

Performance reviews usually evaluate a combination of hard and soft skills, including:

• Attendance and punctuality
• Time and task management
• Critical thinking and problem-solving
• Creativity and innovation
• Client or customer interactions
• Work ethic and accountability
• Communication and collaboration
• Leadership capabilities
• Job-specific technical skills

In addition to feedback, performance reviews also help employees understand:

• How their role contributes to broader company objectives
• Strengths and key accomplishments
• Areas needing development
• Actionable steps for career growth

While many agree that performance reviews are important, there’s growing recognition that traditional methods may not be the most effective.

Challenges with Traditional Performance Reviews

Common critiques include:

• Annual reviews are too infrequent to be meaningful
• Evaluations are often based solely on a manager’s perspective
• Focus tends to be retrospective rather than forward-looking
• Personal bias or subjectivity may influence assessments
• The process can feel overly rigid or overly time-consuming

These concerns have led many businesses, including those supported by Beyond’s HR and payroll solutions, to rethink and modernize their review processes.

Types of Performance Reviews

Companies may use one or more of the following approaches to evaluate performance effectively:

1. Management by Objectives (MBO)
   A goal-setting method that cascades strategic company objectives through departments and individual roles.
2. 360-Degree Feedback
   Feedback is gathered from a wide range of sources, such as peers, subordinates, managers, and even clients, to create a more balanced evaluation.
3. Peer Reviews
   Employees assess one another’s performance, especially when they’ve worked collaboratively on shared projects.
4. Self-Evaluations
   Employees complete a self-assessment based on predetermined prompts, reflecting on accomplishments, challenges, and opportunities for growth.

Best Practices for Effective Performance Reviews

To ensure the process is fair, productive, and helpful, organizations should follow these key strategies:

• Make the review process collaborative, involving HR, managers, and employees
• Promote honest, two-way feedback rather than a top-down critique
• Create a fair system for recognizing high performance and addressing underperformance
• Ensure employee goals align with team and company objectives
• Provide employees with access to resources and support to clarify expectations
• Address and minimize potential bias or favoritism in reviews
• Build trust by maintaining a transparent, consistent approach to performance evaluations
• Clearly communicate the outcomes tied to performance, including next steps or consequences

Steps to Streamline the Review Process

A structured process helps prevent miscommunication and makes evaluations more effective. Consider these steps:

1. Review and update job descriptions together with the employee
2. Hold regular check-ins prior to the formal review to align goals
3. Ask employees to complete a self-assessment
4. Compare insights from self-reviews, manager feedback, and peer or client input
5. Prepare a formal written evaluation outlining performance and recommendations
6. Conduct a performance review conversation that discusses past results and future goals
7. Link performance to compensation decisions where applicable
8. Follow up consistently to track progress and support goal achievement

How Beyond Supports Performance Reviews

Using HR tools from Beyond, businesses can simplify their performance management strategy, from goal-setting and employee feedback collection to securely storing review documents and aligning evaluations with payroll decisions. With the right systems in place, your team can spend less time managing paperwork and more time helping people grow.