Performance reviews should not just be an annual exercise — here’s why

Are performance reviews a priority or an afterthought in your company? Do you have a clear structure, a robust process, and opportunities for everyone’s voice to be heard? Are you reflecting on what’s happened, as well as looking ahead to what’s possible?

Performance reviews can be the key to engaged, high-performing employees, but many of us are still stuck in the past with our approach. Here’s how to future-proof your review process, to make it enjoyable, effective and inclusive.

Performance management is more than a formalised process of measuring performance, or a dreaded check-box exercise that rolls around once a year. It’s actually a powerful opportunity to identify areas for development and increase an individual’s performance and engagement over time.

Great performance management processes are powerful, with research from Gallup showing they can boost productivity by up to 56%. But poor performance management processes can be demotivating, uninspiring, and downright awkward.

Changing the narrative

Performance reviews have had a bad rap in the past. Stressful, forced, or just seen as a waste of time, where both managers and team members are left wondering, what’s the point? So start by changing the narrative around performance reviews and show them in a more positive light.

Talk to your team about why performance reviews are valuable, and explain that everyone deserves to have these moments to celebrate and reflect on their performance, while also looking ahead to their future goals and career progression. With the right structure and approach, performance reviews can become something people look forward to, like they have at the Australian organisation Inclusee.

CEO of Inclusee, Rachael Cook, is a passionate advocate for quality performance reviews, and has used them to transform the employee experience since taking the lead role at the organisation.

“What I love about performance reviews is they’re an opportunity to work with your team to reflect on their success and explore what the future looks like for them. It’s a robust and exciting process, a chance to talk about development and career progression. Our team genuinely looks forward to their performance reviews now that we’ve got a transparent and effective structure in place,” says Rachael.

An ongoing conversation

Rather than seeing them as an annual one-off, think of performance reviews as an ongoing conversation throughout the year.

For Rachael at Inclusee, the phrase they return to over and over again is ‘no surprises’.

“We’ve all been there, taking part in poorly managed performance reviews where we have no idea what’s going to be said, and feel vulnerable and stressed about what might come up in the meeting. At Inclusee, we take a no-surprises approach — by having open and honest conversations throughout the year between managers and team members, nothing coming up in the performance review meeting should be a surprise. It makes the whole process much more effective and rewarding for everyone involved,” she says.

This might mean using weekly or fortnightly one-to-one meetings between managers and team members to address concerns or highlight success as it happens, rather than saving it up for an annual debrief. This approach means employees feel more supported around their development and are more engaged in their workplace.

Making reviews better

Performance reviews have a big impact on job satisfaction, and we know that employees are 3.6 times more engaged when setting their goals and aligning them to company initiatives via the performance review process.

But at present, only 20% of employees strongly agree their performance is managed in a way that actually motivates them to do outstanding work. Not surprising when you consider that 95% of managers are dissatisfied with the performance management process in their organisation.

So how can we make performance reviews better and easier? Tactics include:

Tactics include: 

1. Create a safe space where employees feel they can be honest. Using a template that checks in on employees’ well-being, growth, work relationships, and impact makes everyone clear on the process while ensuring leaders connect with their direct reports on the things that are most important to them.

2. Encourage meaningful conversations between managers and employees through a clear structure in the lead-up to and during the review.

3. Ask managers to hold regular one-to-ones with their people, so there are no surprises.

4. Link the process back to the individual’s goals and professional development, linking these to the overarching goals of the company.

A robust process

A good performance review process is one which is clear and standardised — so everyone knows what is expected of them, understands their role in the process, and has confidence that their performance is being reviewed fairly using a company-wide scale, rather than it coming down to an individual manager’s personalised approach to reviews. Is there anything more demotivating than seeing other people rewarded by the review process, simply because their manager is more generous when it comes to their performance approach?

Good structures create a more fair and inclusive approach to performance reviews, providing clear parameters for the process, so that any underlying human biases don’t have an impact on individual reviews.

Giving people autonomy as part of the review process can help with a sense of ownership and engagement. For example, inviting people to choose which peers and colleagues will provide feedback as part of the process, or to set their own goals.

And give the review process the time it deserves.

“Reviews are an amazing moment to reflect on success and plan for the future. They shouldn’t be rushed. Give people time to think deeply about the process, and show how much you value their contributions,” says Rachael from Inclusee.

This approach at Inclusee using the Culture Amp Performance tool has had a major impact on engagement, with Inclusee achieving a 96% engagement score last year.

Rethinking reviews

Performance reviews are an opportunity to build a culture of open and honest feedback, and they shouldn’t happen in isolation.

By rethinking your approach, you’re creating an opportunity to develop, motivate and engage employees, rewarding them for their contributions, and giving them a platform to look forward, not just backwards.

In a fast-paced business environment, we often don’t stop and reflect. Formalised processes around performance reviews mean we can give our teams the structure to do just that, building a more reflective and creative culture within our companies, and a more engaged employee experience. With this approach, the future of performance reviews is looking bright.

To learn more, watch the full on-demand webinar here.