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What's a performance review, how to make it effective - and how does software help?
Find all the answers here.
A performance review, also known as performance appraisal or annual review merit rating, is a periodic assessment of an employee's work against specific organizational goals.
A performance review's primary goal is to evaluate an employee's strengths, weaknesses, productivity, and progress. These details help understand what they're doing well and reveal areas for employee development.
A performance review is an integral part of a performance management program.
However, the effectiveness of performance reviews depends on how organizations conduct them.
Companies should implement a 360-degree feedback approach for effective performance reviews because it provides more accurate data since the feedback comes from people from all angles of the organizational structure. Furthermore, employees can receive feedback on predetermined competencies or skills more frequently than traditional performance evaluations.
Self-evaluation- Employees evaluate their performance to identify their strengths and weaknesses.
Superior's appraisal (downward)- Managers deliver feedback based on the employee's performance.
Subordinate appraisal (upward)- Subordinates provide feedback on their managers' and team leaders' managerial and leadership skills.
Peer appraisal- Co-workers evaluate each other's performance.
Giving regular feedback is the most important aspect of performance reviews because ongoing discussions increase workplace productivity.
Accenture, for example, has shifted away from annual performance reviews and towards a continuous feedback model, citing appraisals as an inefficient use of time, money, and effort. Instead, they aim to support employees regularly and ensure that they perform better without having to evaluate them after they have contributed to the company.
So giving employees frequent informal bite-size constructive feedback puts them at ease and allows them to take immediate action.
If unsure where to start, look at successful 360-degree performance review processes like Netflix's. Netflix has abandoned traditional performance reviews in favor of a more comprehensive approach to performance management.
With Zavvy, you can replicate Netflix's successful performance review process. Learn how from the complete case study and step-by-step instructions.
Implementing 360-degree employee performance reviews can be beneficial, but only if done correctly.
Companies should make feedback reviews a regular part of their performance management processes so that:
A performance review software aims to automate your performance review process. It offers flexible features such as goal setting, performance tracking, automated reminders, rating scales, comment entry, and reports, making the review process easier and faster.
Zavvy's performance management tool helps you:
Look for a software solution that allows you to:
1. Customize performance review cycles to your company's needs. This is possible with features like:
These features ensure that the review process perfectly meets your company's goals.
2. Collect and share actionable, frequent, and meaningful insights from the right sources.
3. Automate tedious tasks such as tracking goals and progress and sending forms.
4. Securely store and access company data.
5. Send automatic email reminders and notifications to ensure nobody misses steps or review cycles.
6. Integrate with existing communication and collaboration tools.
7. Reveal details of the larger picture of critical competencies, team performance, and leadership potential.
8. Offer a user-friendly experience that employees can easily access and navigate.
There is no universally applicable "best performance rating scale."
The best performance rating scale would align with your organization's goals and provides enough accuracy without overwhelming the reviewers.
Some organizations use numerical systems such as a five-point scale because they allow for more granular feedback without being overly complex. However, some may prefer a custom rating scale with more specific performance criteria.
Others, such as Netflix, have abandoned the traditional rating system in favor of 360-degree feedback. The reason for that is their preference for qualitative data. Plus, they adjust pay raises and salaries according to market conditions rather than employee performance.