4 Important Reasons Why You Should Conduct Performance Reviews

Performance evaluations are becoming less popular lately, according to Fast Company. Unfortunately, this is a big mistake made by managers. Performance reviews are uncomfortable for all parties involved, and although some may think they are becoming extinct, this shouldn’t be the case, especially for small businesses. Not only are they important for employees, but companies can get a lot from performance reviews too. By getting feedback from your employees, you can see where you stand as a manager and where the employee feels like he or she stands as well. Are they getting the help they want? Are they going the extra mile? Is it time for a raise or a promotion? Performance reviews are a great opportunity for managers to have a one-on-one with their employees and hear them out, which is one of the main reasons why they should not be avoided. Read on to find out more about the benefits of conducting performance reviews.

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They Improve Communication

Like mentioned before, performance reviews are a great way to get feedback from your employees. A good performance review is designed to facilitate conversations between employees and their managers. They should not be an interrogation or even a reprimand. As a manager, you want to make sure that you are actually listening and comprehending what your employees are saying. Many employees have a lot to say, but they keep it bottled up because they don’t want to get in trouble or appear to be whiny. Give your employees the opportunity to open up to you; this will improve your relationship with them in the end.

They Allow for Transparency

Transparency is a very important characteristic every company should have, not only with their customers but also their employees. Performance reviews are a great way for managers to be transparent with their employees. They can be honest about how they think the employee is doing, and also give them advice on how to improve their job performance. When it comes to compensation and promotions, it can get somewhat tricky. This is because all employees want them, but obviously, not everyone can get them. So what happens when a certain employee gets a promotion? Usually, the rest of the employees will want to know the details about why that person got promoted. This is your opportunity to be transparent, genuine, and honest. This might motivate your other employees to work harder to earn their promotion.

They Allow for Recognition When it is Deserved

When you first hire someone, you usually set quarterly goals for them or their department. Performance reviews are the ideal opportunity where managers can go back and review in detail everything an employee has worked on. If an employee has achieved those goals, then this should be recognized and the employee should be rewarded. Many employees have left their jobs because they feel underappreciated, or they don’t get rewarded for going the extra mile. This may sound like some employees are “needy”, but at the end of the day those employees work for you and without them, your company would not be where it is now. Just like rewarding, sometimes reprimanding is necessary. If a manager notices that an employee has not been achieving goals, or that they have been slacking off, they could use performance reviews as a time to talk to that employee and provide them with feedback. Also, keep in mind that performance reviews are a great time to set expectations for the future, which brings us to our last point.

Setting Career Goals

Although the primary goal of a performance review is to determine how an employee is performing in their role and whether they are a good fit for the company, it can serve a larger purpose of helping employees determine if they have chosen the right career path. The feedback a worker receives during performance reviews regarding their strengths and weaknesses is invaluable in helping them determine their future.

Conducted correctly and frequently, performance reviews can have a really positive effect on the success of your team. Once a year is not often enough to really grasp how well your employees are performing, and how satisfied they are. Shoot for having reviews every six months, quarterly or even monthly. Consider all the positives listed above and then take steps to guaranteeing continued success by formally communicating with your team more often.