June 1, 2018

How to Create a Performance Review Process in Your Company

Written by
Dave Anderson
Tags: HR

Employees are the lifeblood of a company. They come to work every day to accomplish tasks that propel the organization forward. When a company succeeds, it’s because of the cumulative achievements of each person on the staff.

But no two employees perform exactly the same. Each person has areas where they excel and areas they need to improve.

It’s crucial for managers to monitor employee performance and provide feedback that helps every team member reach their full potential. The key is to create a formal employee performance review process lead by human resources and executed by department leaders.

Decide on review frequency

The first step is to decide how often your company will conduct reviews. It should be frequent enough for each employee to always be aware of their performance but not occur so often that it interferes with the company’s primary efforts. Here are a few review frequencies to consider:

  • Annually – Yearly performance reviews are common in most companies. This frequency is fine if your company has consistent operations but you should consider more regular reviews if the organization is growing and evolving.
  • Semi-annually – Conducting reviews twice a year is a nice alternative to the typical annual review. It’s a short time between review cycles but not so often that feedback is a rehash of previous meetings.
  • 90-day – A review every three months can be too frequent for a seasoned employee but is helpful for a new hire. The manager can learn if they’ve settled in and feel comfortable with their new responsibilities.

Performance reviews will always need to be continuously improved. If your HR team finds the time between reviews isn’t ideal, the process can always be adjusted.

Set review criteria

There’s a lot that goes into being a successful professional. Performance reviews should be thorough and touch on everything your company wants of its employees. The exact review criteria will differ by company and role but should typically cover the points below:

  • Job performance – Reviews should primarily focus on the employee’s ability to accomplish role-specific objectives. Every employee needs to have clear responsibilities that contribute to the team and company plans.
  • Work quality – Employees should deliver high-quality work that meets the company’s standards. Try to quantify each team member’s success by establishing role-specific metrics.
  • Initiative – The best employees strive to learn new skills and do more impactful work. Managers should track the professional growth made by the employee since their last review and gradually assign them more challenging projects.
  • Collaboration – A company’s success depends on people with different skills coming together to work toward common goals. Ensure each employee is a team player and respectful of their colleagues.
  • Time management – Every person should be fully engaged during their time at work. Assess an employee’s willingness to help colleagues or take ownership of a new project when they have free time.

Use the standards above as a starting point when forming your company’s performance review process. Then have each manager refine their team members criteria based on role responsibilities and objectives.

Train managers to conduct effective reviews

While HR leads the company-wide performance review process, it’s up to managers to ensure each of their employees are properly evaluated. Before putting your plan into action, train managers on the following points:

  • Give specific feedback – Managers should always avoid general, empty phrases in reviews. It’s important they prepare by assessing the employee’s past performance and coming up with clear feedback to share.
  • Provide examples of past behavior – One way a manager can give specific feedback is to cite an example of something an employee did. Both parties should recall the situation, and the manager should provide advice on how the employee can improve if the situation arises again.
  • Be fair yet honest – Reviews should never be either too harsh or too positive. The manager should cite what the employee did well and where they can improve while accounting for any problems outside of their control they faced.
  • Ensure feedback is constructive – Feedback should always be actionable. The employee should not only learn where their work came up short but also come away with an idea of how they can improve going forward.

Reviews shouldn’t be put into practice until your managers are fully prepared. Be sure to spend time training them on everything that goes into conducting effective employee evaluations.

Learn from reviews

The benefits of performance reviews should be a two-way street. Employees should come away understanding how they’re doing and the company should learn how it can be an even better place to work. Here are some post-review action items for the organization:

  • Reward top performers – Employees who excel at their jobs should be rewarded with a raise and promotion. If your company doesn’t take full advantage of their potential, another employer will.
  • Help underperformers improve – Employee reviews provide the opportunity for underperforming employees to get back on track. Have managers note the improvements they want to see, monitor the employee’s performance, and follow up during the next review cycle.
  • Correct underlying issues – Reviews often bring widespread issues to light. Listen to the concerns voiced by employees and take steps to fix the problem.
  • Identify areas the company can improve – Like employees, your company should always be striving to do better. Find out how you can improve the employee experience so everyone is set up for success.

The performance review process also gives employees the opportunity to share what’s on their minds. Be sure to listen to their thoughts and make improvements where you can.

Create a successful employee review process

Before your company can reap the benefits of performance reviews, it needs to create a plan that works for everyone involved. Follow the tips outlined in this article and your company will soon have a successful process in place.

Dave Anderson is a content writer for Reviewsnap. He lives in Portland, Oregon where he enjoys snowboarding, hiking, and all things outdoors.