What Is a Performance Review and Why Does It Matter?

By Indeed Editorial Team

Published 14 July 2021

Staff performance reviews are important for any company, and their effectiveness depends on how the managers conduct them. A great employee review helps members of staff identify growth areas while maintaining employee-manager relations. Knowing what a performance review is and what purpose it serves can help you prepare for this aspect of your job. In this article, we cover the basics of performance reviews so you can use them effectively to grow in your career.

What is a performance review at work?

A performance review is a periodic assessment of an employee's overall performance and their contribution to the organisation. Typical of work appraisals, a work review entails identifying employee strengths and weaknesses, setting future goals and sharing feedback. Some companies conduct their performance reviews annually, while others do so monthly or quarterly.

Work performance review methods

Depending on their style or business needs, employers can use various performance review methods to assess their workforce. Some use a combination of methods or approaches to understand their employees' performance. Below are some of the common appraisal solutions available to employers.

  • Essay evaluation: The employee or the assessor writes a brief essay that summarises the strengths and weaknesses of each employee including supporting facts and case studies. While this approach results in a thorough assessment, it can be time consuming.

  • Self evaluation: HR asks each employee to fill out a self-assessment form, which lets them reflect on their performance, conduct and behaviour. Letting employees do a self-evaluation enables the management to compare their own assessment and what their employees think of themselves.

  • Checklist scale: This approach entails preparing and completing questionnaires with yes or no answers. The assessor answers specific questions that relate to the employee's performance, competencies and skills.

  • Critical incident: With this method, the employer maintains a logbook that details instances of positive and negative conduct among employees. For example, one employee may have performed a project to a high level while another may have behaved poorly towards a customer or a colleague.

What is the purpose of a performance review?

Regardless of how frequently a company conducts performance reviews, periodic evaluation meetings give the employees the opportunity to assess how well their efforts match the company's goals. The outcome of the assessment enables employees to continue aligning with changes in the organisation's long-term goals.

In addition, staff performance reviews are a great way of highlighting employee achievements and discussing any concerns about the job. Employers get a better understanding of what the management expects from them. They can also ask questions and provide crucial feedback to their immediate supervisors and managers. This can help clarify expectations and allow managers to discover and resolve issues. A workplace performance review can help the employees understand:

  • What they're doing right

  • Where they need to improve

  • How their work dovetails with the company's long-term goals

Managers who conduct performance reviews can easily identify high performing members of their team and encourage growth and personal development. They can also share the expectations with their teams, foster employee engagement at the workplace and resolve issues before they escalate.

What do you do in a performance review?

A typical performance review involves different elements. One of these is a summary of your written evaluation. Your employer expects you to write a self-assessment report before your performance evaluation date. So, look at your performance over the course of the year, or how long you've been working at the organisation.

Think back over the last year and say what initiatives you took at work. Highlight any of your accomplishments and whatever mistakes you made. Be honest about yourself. Describe how you've helped your team, office or manager and give specific examples. Rather than using words such as industrious or team player to describe yourself, you can share concrete examples of your accomplishments or contributions.

The face-to-face meeting

If there's no requirement to do an employee self-assessment, you may participate in a face-to-face meeting with your manager. The manager might ask about your contributions to the company or achievements. This can be an opportunity to share specific examples that demonstrate your strengths. Note down what you have accomplished and memorise your notes for this part of the review.

You may also give your colleagues both positive and negative reviews regarding their performance in the past year. Remember, your colleagues will read your feedback as part of employee evaluation, so it's best to provide constructive feedback.

Related: How To Conduct an Employee Evaluation

What should be included in a performance review?

Most employees focus on pertinent areas or skills that employees require to perform their work effectively. Communication, collaboration, problem-solving skills, punctuality and the ability to accomplish goals are all crucial in staff performance reviews. But they're not the only important things. Reviews also include the following:

Overall performance

One of the main purposes of a performance review is for managers to understand employees' overall performance. They may include a detailed summary of findings at the end of the performance review report. The review may include comments on any items in the review. Constructive criticism is also helpful. Criticism outlines issues and provides suggestions on improving or maintaining an employee's performance.

Strengths and weaknesses

It's common for employers to appreciate good deeds in the workplace and appreciate their employees' strengths. Your manager can use reviews to understand your weaknesses and mitigate any effects they might have on your job performance.

Identify areas of your work that you can improve and where you could benefit from support. By sharing your weakness, you can help your manager develop strategies that might help you overcome certain weaknesses and improve your work.

Growth areas

While a positive review may boost your mood, it may not be enough help you advance your career. Perform research into your career and higher roles you can pursue to understand the skills and experience you need for career growth. For example, you may need to learn a new technical skill or undergo management training or undertake a high-level project.

During your performance review, your manager can give you constructive feedback and inform you about specific growth areas and skills you can improve.

Ask questions

If you rarely get the opportunity to ask questions in your role, the annual performance review may help you get answers. For example, you can ask questions about the status of your department or opportunities for career growth. This is also a good opportunity to clarify the company's goals.

Goals for the future

Another crucial aspect of a workplace performance review is identifying goals. It's important for the goals to be specific, measurable, achievable, relevant and time-bound. Be clear about the goals you want to achieve in the next month, three months, six months and year. Make sure they align with your manager's expectations. When the next review comes, you can have specific goals to review and you can discuss what you accomplished.

Growth within the company

Your annual performance review is also the best time to affirm your commitment to grow within the organisation. Use the opportunity to let your supervisor or manager know that you are ready to take the next steps. Ask about timelines for raises and promotions and what else you can do to get there.

Related: Guide To Writing a Self-Assessment Report

Tips for preparing for workplace performance review

Regardless of whether a performance review is formal or casual, you can take steps to prepare for it. Here are a few tips to help you prepare for an upcoming performance review:

  • Prepare notes: You can write notes to prepare for the performance review. Document the issues and goals you'd like to discuss during the review, including your strengths and weaknesses.

  • Brainstorm session: You can share specific examples of how you've achieved the goals you set in the last review and what areas you've improved on.

  • Self-evaluate: It's important to evaluate your performance before you attend the review meeting. This can help you prepare to discuss your skill gaps, goals and strengths.

  • Write questions: A performance review can be an opportunity for you to ask your manager questions about projects or processes. You can write down questions before the meeting to prepare.

  • Set expectations: Performance reviews can offer a chance for you to clarify the expectations for your work and communicate about any issues as they arise.

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