How to get the most out of performance reviews

10

By Marvin Opperman, People Director, Sage Africa & Middle East

Marvin Opperman, People Director, Sage Africa & Middle East

As your business evolves from startup to scale-up or grows from a small entity into a medium-sized employer, you will inevitably need to formalise your HR processes and systems. From recruitment and onboarding to employment equity and training, there is certainly a lot to think about. One vital function you should undoubtedly include is performance reviews especially the discussion.

Performance reviews used to be a source of angst for employees, especially given their association with salary increases, performance bonuses, or negative feedback. However, today’s more progressive companies see them as an opportunity to help its employee grow not only in the business but to progress their career as well. They offer a platform for employees to seek support, resolve issues, and set realistic goals. Embedding an effective performance management philosphy helps employees flourish while improving collaboration across the organisation.

A performance review is a discussion and engagement between an employee and manager to examine the employee’s performance focusing on tracking the performance goals, objectives, feedback on observations and review milestones contracted on. Businesses usually have performance meetings every quarter or once a year. Managers and employees provide feedback, set targets for improvement. Regular reviews help keep team members motivated, aligned with the company’s vision, and ensure employees understand their role in the company’s success.Regular engagement not only normalises the art of continuous feedback as well as mitigates any form of suprises toward and/or at the end of the performance period. 

Both the employee and the company will derive more value from the performance review when it is treated as an essential and valuable part of the employee’s growth in the organisation rather than a box-ticking exercise. Importantly, annual performance reviews should not impede regular feedback throughout the year.

A structured yet flexible approach to working with colleagues to recognise and improve performance has become crucial in a world of remote working. Formal performance reviews and regular informal performance discussions help employees feel a sense of belonging, contribution is felt and allows them to see and understand the value their role holds within the organisation. It is often lost in translation and is a critical component in ensuring your workforce remains engaged and aligned to the performance of the organisation. 

Performance review methods

Performance Reviews will vary according to company culture, practice, industry and each employee’s role in the business. For example, someone working in retail might be evaluated on how they interact with customers. In contrast, a salesperson might be assessed on their sales figures. However, many of these metrics are still evolving as more people work remotely. There is increasingly a shift towards key performance indicators (KPIs) that are outcome-focused. It is critical to ensure that the practice is consistent and effectively embedded in and throughout the company. Methods of measurements will differ but the core focus should be aligned. We have seen an increase in engagement and moral once employee’s understand how their role aligns to the business performance objectives.  

Today, companies are leveraging a combination of different tools and methodologies to measure performance. Performance management modules in HR systems can be useful in helping you track objectives and key results and provide 360-degree feedback to employees. In more competitive environments, HR systems can help make performance management more transparent and objective as well.

Meetings and catch-ups

You might choose to have casual meetings every few months to discuss progress or issues for a less formal performance management approach. It is preferred in smaller companies where team members work closely together. However, larger companies can also benefit from consistent discussions on performance. This method caters for real time feedback which is an effective measure to cause-correct where there is misalignment. 

Rating scales

With rating scales, managers work through a predefined list of activities and rank the employee’s performance against set metrics. It is common in larger companies that capture data on general performance across the business.

Ranking against objectives

Objective-based reviews involve setting targets at the beginning of each financial year or each quarter and then deciding if the employee has achieved these goals during the review meeting. This method can be used in almost any organisation.

360-degree feedback

When a business seeks 360-degree feedback on an employee, it asks for comments from the manager, colleagues, and customers to get a bigger picture of the employee’s performance.

Tips for getting more from performance reviews include

  • Offer precise feedback on performance and highlight the business impact.
  • Use clear examples when discussing overperformance or underperformance. 
  • Document and discuss employee performance throughout the year so that the performance review does not contain any surprises. 
  • Review performance using clear KPIs. Try to make them as objectively measurable as possible.
  • Remember to relook KPIs for employees who are primarily working remotely, focusing on outputs and adjusting KPIs if their role has changed. 
  • Be generous with praise and recognition. 
  • Once team members are clear regarding their role and have the necessary tools, trust your team to get on with it.
  • At all costs, avoid micro-managing unless you are dealing with a serious underperformer.
  • Team performance should be as closely tracked as individual performance. 
  • Colleagues should feel safe to share feedback with their managers and leaders. A performance review shouldn’t be a top-down discussion. 

The secret ingredient to successful performance management in a remote and hybrid working world is continuous feedback discussions. They give colleagues a sense of belonging to a team, updating them on company developments and how they impact them to ensure they stay focussed on their goals and can adjust behaviour and output timeously.

About Sage:

Sage is the global market leader for technology that provides small and medium businesses with the visibility, flexibility and efficiency to manage finances, operations and people. With our partners, Sage is trusted by millions of customers worldwide to deliver the best cloud technology and support. Our years of experience mean that our colleagues and partners understand how to serve our customers and communities through the good, and more challenging times. We are here to help, with practical advice, solutions, expertise and insight.