Performance reviews are conversations where HR departments & managers examine the productivity, value, competence, impact and general growth of employees over a period of time that they have spent within an organisation.

Employees can be preoccupied with trying to deliver their tasks, meet up with deadlines, basically do their jobs and try to get by, instead of focusing on building a career, hence they often lose value. As an HR manager, these employees cannot help boost your company’s competitive value. This is because they cannot provide innovative services that put your company in a place to compete with other companies gunning for the #1 service provider position in the global market.

Employees’ performances are reviewed based on their job description, performance, growth, and skill acquisition over a given period. As an HR manager, dwindling performances can be alarming to you. So how can you help employees grow and stay relevant within the organisation? How can you help them know that they have either appreciated in value or have not become more valuable over time?

7 reasons performance reviews are important

Employees’ side to the story

HR managers can do their best to be involved in every important thing that concerns employees where necessary, but there is only so much that can be seen. You cannot see everything at every time; sometimes, it takes other employees to tell what is really going on. In order to properly empathise with employees and understand what they go through, getting feedback from them is important. Since HR is ultimately about the employees, HR has to hear from them; understand necessary information about them and how they perceive the work environment.

Employee engagement

Employee engagement is simply an employee’s interest and contribution to a company’s overall success. A study by Smarp shows that companies with high employee engagement are 21% more profitable than companies without it (Smarp; Employee engagement statistics). In making certain decisions about the company and trying to find solutions to a problem, employees’ feedback can provide relevant insights that can help proffer proper solutions. This can save the organisation resources that can be channelled towards other important things.

Promote a healthy work environment

Hearing from employees helps to reduce toxic occurrences and situations. Emotional abuse, destructive discussions, accumulated hurt and regrets from one employee to another, from a supervisor to a team member can be easily discovered and better understood during a performance review. This way, emotional outbursts and unnecessary drama can be prevented and avoided.

Feedback from the company

Has an employee done far better than expected recently or did an employee’s productivity dip at a particular time? Whatever the case is, it can be addressed appropriately at a performance review. What the company thinks and suggests can be presented as constructive criticism. This inspires the employee to grow; for themselves and ultimately the company. In fact, an employee may just be clueless as to how to grow; however, at a performance review, you can give pointers and suggest ways to improve.

Optimise performance

Asides from giving appraisals, performance reviews help to get insights into why an employee has been underperforming or what has been the motivation for an employee’s great performance. Also, responses from HR can provide employees with ideas on where to adjust, what to maintain, toxic relationships to desist from and everything that contributes to an employee’s performance so that productivity can be enhanced.

Identify potentials

Employees are usually expressive during appraisals. In talking about their experiences and answering questions, HR personnel may find interesting potentials, skills and talent that can be worked on for better performances or used in another area. The potentials can either be utilised for the company’s growth or an employee’s personal development. Either way, the raw potentials that are identified during these performance reviews should be leveraged upon for progress.

Targeted strategy development

When organising trainings and considering benefits for employees, feedback from performance reviews can help HRs decide what works best for individuals. Since trainings are meant to provide exposure and help employees grow, the kind of training that will be provided for each employee will be tailored to suit individual needs so as to optimise their skills for productivity.

5 ways to Conduct Effective Performance Reviews

Performance review

Set a goal

Any task without a goal or a purpose attached to it will be done haphazardly. Decide the purpose and what goals you want to achieve at the end of the performance review. When this is put in place, the steps you take will be carefully calculated to achieve maximum results.

Be deliberate about the review team

Who you choose to be part of the team that conducts the performance review should be carefully considered. Employees usually have their preferences and who they would rather talk to. Choose review team members who your employees would naturally feel comfortable with. This can go a long way in preventing filtered opinions. Also, how reviews will be taken can be tied to whoever is giving the review.

Assess success and opportunities

For performance reviews to be successful, they should not be one-sided. Employees are usually open to making adjustments after receiving negative feedback, but also ensure that tasks that they successfully accomplished and did well in previous times are applauded too. It makes them feel like they can do better and are not completely a failure.

Provide instances and examples they can learn from, opportunities they can leverage on to do better. It could be getting closer to their supervisor for mentorship and help, or improving their relationship with a team member that does better and has more experience.

Consider both low performing and high performing employees

The conversation that may occur with a low-performing employee may be different from the one with a high-performing employee. Both categories should be adequately catered for to get the best results. For instance, you can consider understanding the motivations and lifestyle of a high-performing employee and how they can be optimised better. For a low-performing employee, you will most likely want to consider their environment, how they think, and how each of them should be addressed for the review to be successful.

Make plans to follow through

A successful review does not end at the conversation stage. A follow-up plan on feedback provided is necessary to measure progress over time. This is so that a low-performing employee does not sink back into old habits that caused them to be unproductive and so a high-performing employee can continue to do better. Their progress has to be monitored with SMART goals in mind at any time.


According to Forbes (The Secret To Giving Your Business A Competitive Advantage), happy employees are productive employees- and the secret to a successful business. With a proper plan and strategy for performance review, you can be sure to make employees happy, reduce churn rate and increase productivity in your organisation. Healthy and happy employees take the company’s business as their business, willingly learn and do what it takes to defend the progress of the organisation they work in.

Note: During a performance review, discretionary effort in the form of feedback can be adopted in making decisions that affect the company’s growth. Consequently, employees feel like they are involved and their opinion matters in the company’s growth. Therefore, they will be motivated to make decisions on their job that will help the company grow.

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