HR glossary / P / Performance review

Performance review

Definition

Performance review is a regular process of assessing an employee’s work and achievements over a specified period. Its purpose is to identify strengths, and areas for improvement, and to set future goals and expectations. It’s a key aspect of human resource management, enabling the monitoring of progress, and employee development, and ensuring that individuals within the organization align with its objectives.

Traditionally, performance reviews are conducted annually, but many companies are now opting for more frequent, often quarterly, check-ins with employees. The process requires preparation from both the manager and the employee. A well-conducted performance review should be objective, fact-based, and focused on specific accomplishments and behaviors of the employee.

While performance reviews are an essential management tool, they can also be a source of tension and misunderstandings if not executed correctly. The process must be fair, transparent, and based on constructive dialogue between the employee and the manager.

FAQ

How often should performance reviews be conducted?

Performance reviews are typically conducted annually, but many organizations are moving towards a more frequent schedule, such as semi-annually or quarterly, to provide more timely feedback and better support employee development.

A performance review should include a clear and concise evaluation of the employee’s job performance against specific goals and criteria, areas for improvement, strengths, and a discussion about future objectives and career aspirations. It should also provide an opportunity for the employee to give feedback and discuss their views on their role and performance.

Performance reviews can be made more effective by ensuring they are two-way conversations where both parties feel comfortable to speak openly. Training managers in effective communication and feedback techniques, setting clear performance metrics, and using tools like 360-degree feedback can also enhance the process.

Uses

Goal setting

Facilitates the establishment of achievable goals tailored to drive employee and organizational success.

Career development

Identifies opportunities for career advancement and professional growth, helping employees to realize their potential.

Compensation decisions

Informs decisions about raises, bonuses, and other forms of compensation based on performance metrics.

Training needs assessment

Helps in identifying areas where employees require further training or development.

Succession planning

Assists in recognizing potential leaders and planning future leadership by evaluating current performance and capabilities.

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