Employee performance reviews have long stirred up a debate over their effectiveness as a management tool, and seem to constantly evolve to address perceived limitations or to consider new parameters relating to either performance or its measurement. Given the long-standing debate and constant revision, the question of how performance reviews are benefiting company performance, employee effectiveness, and the employees themselves should be asked on a periodic basis.
Because every company is distinctly different in regard to operations, organization, and workplace culture, there are no standardized performance review benefits that are applicable to all companies. However, if your company is utilizing a performance review process, it should definitely be producing some sort of benefits, whether measurable or intrinsic and preferably both.
Read on to determine whether your company, its management, and the employees themselves are realizing any of these noted benefits of performance review management.
Employee Motivation
When supported by a fair and logical merit-based compensation system that rewards good performance with better pay, benefits, and possible promotions — or that penalizes poor performance — the performance review process has proven effective at employee motivation.
Formalize Employee Role Within Company
While the employee may have a title and known responsibilities, performance review management can solidify the respective importance of distinct responsibilities. Not only does the performance review highlight the responsibilities, but also provides measurable goals to assess how effectively the responsibilities are being carried out. The review process can also provide the employee with the opportunity to offer feedback relating to responsibilities as perceived from their perspective. Such feedback about operations or organization from a “ground level” perspective sometimes offers management valuable insights that can be used to increase efficiencies.
Enhance Cohesiveness Between Employees and Company
Goal establishment within performance reviews can help better align employee job focus with company goals. This benefit is further enhanced when all members of a team within the company are working under the same performance review management goal purview.
Structured Employee-Management Interaction
The performance review management process provides a dedicated means for an employee and management to discuss responsibilities, identify potential problem areas, clarify mutual expectations, and establish long- and short-term goals. This planned interaction can help aid employee development by providing a setting in which the employee can learn from positive feedback and/or from the identification of performance areas in need of improvement. The structured interaction can also help establish a better rapport between management and employees, and/or provide insights that can be used to improve employee-management relations.
Employee Compensation, Promotion, Demotion or Termination
It provides company management with a more comprehensive and consistent means of evaluating employees when trying to make determinations about raises and promotions. Inversely, it also provides management with a tool to support demotions or other sanctions related to poor performance, and a tool to help make layoff decisions when faced with the need to reduce staff.
Means of Screening Under-Performers
While management often recognizes under-performers and subpar work during the course of a work week, month, or year, sometime under-performers remain unnoticed and subpar work not identified on a timely basis. The performance review can make it easier to identify under-performers and establishes important documentation relating to subpar work.
Provides Written Documentation to Support Termination Decisions
If an employee decides to legally challenge termination or other actions taken by a company, a performance review provides written documentation that may help justify the company’s actions in relation to the employee.
There is a need for Customized Solution
While other benefits undoubtedly exist depending upon the company and/or performance management system used, the above-noted benefits certainly support the utility of performance review management. The lack of any one-size-fits-all performance review management system combined with the vast differences between company organizations, operations, and cultures, underscores the need for a customized performance review tool that can be tailored to meet the specific needs of each distinct company.
OPerf — Performance reviews, Goal management, and 360-degree assessments, all in one place. It’s all online and customizable. To learn more visit www.operf.io
