How to Conduct Employee Performance Reviews

A hiring manager interviews a chief marketing officer candidate.

Employee performance reviews inspire employees to do their best work and contribute to your company’s success. If managers use the assessments to discuss employees’ short- and long-term goals and strategies for accomplishing them, these meetings can also help you boost retention.

Ready to get started? Here’s how to create an effective employee review program.

What Are Employee Performance Reviews and Why Are They Important?

Employee reviews are one-on-one meetings between managers and their direct reports. They help your staff explore how they’re growing and contributing to business goals.

These evaluations:

  • Provide staff with concrete information about where they stand and how they can improve.
  • Enhance team performance by helping employees perform better.
  • Allow employers to recognize and promote top-performing employees.
  • Help managers address issues before they become problematic.
  • Create a company culture that hinges on employee feedback and recognition.

Types of Performance Reviews

There are several employee performance review models you can use for your business. Here are some of the most common:

  • Self-assessment: This is when employees rate themselves against a predetermined set of standards. Their manager rates them against the same criteria and uses both documents as a jumping-off point for discussion.
  • 360-degree reviews: These reviews include feedback from many different angles, making them one of the most thorough options. These reports can include feedback from managers, coworkers, clients, and direct reports. 360-degree reviews provide a multifaceted view of the employee’s competencies and areas for growth.
  • Peer review: Peer reviews are useful because they help employees gather valuable feedback from coworkers. They also grant companies greater insight into the employee’s everyday behavior. This provides a comprehensive employee evaluation and uncovers how they work with the team on a day-to-day basis.
  • Rating scale: The rating scale is an evaluation tool that uses variables (typically core competencies such as teamwork, problem-solving skills, communication, etc.), and values (such as poor or satisfactory or on a scale of one to 10) to evaluate employees. Some businesses leave room for comments so employees can discuss the ratings with managers in more detail.
  • Management by objective (MBO): MBO employee performance reviews use SMART goals (specific, measurable, attainable, relevant, and time-based goals) to provide employees with clear evaluation parameters. Managers and employees agree on the specific goals the employee needs to meet, ensure these goals support company objectives, and identify a specific timeframe for completing them. This method makes it easier for employees to stay on track and gives companies a clear measure of success.

Keep in mind that you don’t have to choose just one type of review. Many businesses use two or more of these models simultaneously. Each can be combined or adapted to fit your specific evaluation needs.

How to Conduct Successful Reviews

Now that you understand different types of employee performance reviews and how they work, here’s how to conduct them successfully.

Decide How Often You’ll Schedule Performance Reviews

Studies show that employees who receive feedback frequently are more engaged. Consider adding a midyear review or even quarterly or monthly reviews. If you can’t have reviews that often, be sure to work feedback into your one-on-ones. There shouldn’t be any big surprises come review time.

Give Employees Access to Metrics in Advance

You don’t have to give employees too much information before the scheduled meeting, but clue them in on the evaluation metrics. Your employees deserve to know how they will be evaluated and what’s expected of them. Send the criteria in advance or make it available year-round.

Focus on the Good

Motivate employees by giving both constructive and positive feedback. Be specific about what your employees are doing right so they are clear on their strengths and weaknesses.

Ask the Right Questions – and Listen

At the heart of any good manager-employee relationship is effective communication. Ask questions that build trust and show that you’re interested in their growth. You don’t want employees feeling like the review is a punishment. Ask what they’re most proud of and how you can improve as a manager. Solicit employee feedback about their responsibilities and company culture. Make them a part of the process, listen to what they say, and make changes whenever possible. It shows you value that employee, which will boost their confidence and make them feel good about the they’ve done and have yet to do. The changes you make can help you recruit and retain top talent.

Help Employees Move Forward Confidently

End your employee performance reviews with clear steps employees can take moving forward. Every staff member should leave these meetings with a clear understanding of where they currently stand and what actions they need to take.

You can use employee review software to set up and manage your assessments. These tools help businesses set employee goals and log their progress. They also keep employee reviews on file for future reference and help managers easily compare current and past reviews.

Continue Improving Your Company Culture

Now that you know how to create better employee performance reviews, you can improve employee satisfaction, enhance team performance, and create a transparent company culture. Keep up the momentum with expert hiring and management tips from Monster.

A hiring manager interviews a chief marketing officer candidate.