What is a performance review?

A performance review, also known as a performance appraisal or performance evaluation, is a formal process to assess and discuss an employee’s work performance over a specific period.

Performance reviews can be conducted annually or more frequently, such as quarterly or monthly, to provide employees with more timely feedback.

What is the purpose of a performance review?

The main purpose of a performance review is to provide structured feedback on an employee’s performance based on established goals and objectives and discuss how they can continue to develop in their role. A performance review gives an employee and their manager an opportunity to discuss their achievements, progress, strengths, challenges, and areas for improvement. The review can also establish goals and expectations for the next review period.

A performance review can be used to:

• Review an employee’s progress and achievements;
• Recognize strong performance and contributions;
• Identify areas where improvement may be needed;
• Clarify job expectations and priorities;
• Set goals for the next review period;
• Discuss professional development and training opportunities;
• Identify challenges that may be affecting performance; and
• Let the employee discuss their own experience and concerns.

Performance reviews can also contribute to decisions about compensation, promotions, changes in responsibilities, or other employment matters, depending on the organization’s approach.

What does a performance review include?

There is no single format that every organization must use for a performance review. The structure varies depending on the organization, role, and purpose of the review.  Performance reviews should be based on relevant, job-related criteria and conducted consistently.

A performance review commonly assesses:

• The employee’s progress against their goals and objectives;
• The quality and quantity of their work;
• Job-specific skills and competencies;
• Communication and collaboration;
• Contributions to the team or organization;
• Areas for improvement;
• Professional development needs; and
• Goals and expectations for the next review period.

The employee should also have an opportunity to provide their own perspective on their performance. This can help identify differences between how an employee assesses their performance versus how their manager assesses it.

Who takes part in a performance review?

The employee and their direct supervisor or manager will usually be the primary participants in a performance review.

The manager provides feedback and assesses the employee’s performance against the expectations and goals established for their role. The employee can also reflect on their own performance, discuss achievements and challenges, and provide feedback to their manager.

Some organizations also use 360-degree feedback as part of their performance review process. This approach gathers feedback from a wider group of people who work with the employee, such as colleagues, direct reports, customers, or other teams.

How often should performance reviews happen?

The frequency of performance reviews depends on the organization’s approach and the needs of its employees.

An organization may conduct formal performance reviews annually, while others may conduct them quarterly or more frequently. Some employers combine a formal annual review with regular performance conversations throughout the year.

More frequent discussions can give employees an opportunity to receive feedback and address issues before the next formal review. They can also allow goals to be updated when an employee’s responsibilities or priorities change.

There is no single review schedule that is appropriate for every organization. The important consideration is that employees receive clear and meaningful feedback on their performance.

What happens after a performance review?

Performance discussions should not end after the completion of a performance review. The outcomes of the review can be used to establish clear expectations and goals for the next review period.

Depending on the review, this may include:

• Setting new or building upon existing performance goals;
• Identifying training or development needs and opportunities;
• Agreeing on areas for improvement;
• Adjusting responsibilities or priorities;
• Establishing follow-up meetings or check-ins; and
• Recognizing achievements or strong performance.

Goals should be clear and realistic, with employees understanding what is expected of them and how their progress will be assessed.

Resources:

• Performance Management Templates
• Performance Review Form
• Performance Management Training