As frequently as employees seek raises and promotions for their hard work, you would think giving performance reviews would be easy. But from a leadership perspective, performance reviews can sometimes be daunting.

Perhaps your company is full of rockstars, or you don’t know how to encourage professional growth. As a result, some companies skip reviews, but they can be crucial to development.

When done well, performance reviews encourage employees to develop professionally, strive for improvement, set goals, and provide leadership with much-needed feedback on how they are doing in their role and how they view their value within the organization.

Some companies offer annual reviews. Yet, others are moving away from formalities and opting for more frequent, more casual reviews to keep communication between management and employees open.

There are benefits to all of those structures. If you decide to have them more frequently, it creates an open line of communication and develops psychological safety. Plus, keeping it more casual by checking in regularly with employees can be beneficial for identifying challenges and opportunities for improvement and empowering employees to feel their voice matters.

What to Include In Performance Reviews

No matter how frequently you conduct performance reviews, remember that there are a few key areas to focus on, such as:

• Communication: Is the employee demonstrating practical communication skills?
• Collaboration: Even if their work is autonomous, do they work well with others if needed?
• Problem-solving: Is the employee efficient with their problem-solving skills? Do they welcome constructive criticism and feedback when solving problems?
• Quality and accuracy of work: Are they consistent with the work output?
• Attendance: Are they punctual? Are they missing work too frequently to where it is affecting their work performance?
• Deadlines and goals: How well does the employee accomplish goals or meet deadlines?

Focusing on the quality and accuracy of work can range from small to large projects, the progress made, and what obstacles may be getting in the way. Sometimes these obstacles can be work-related, while other times, there may be personal difficulties. Opening the conversation to include the barriers will show empathy and encourage the employee to speak openly.

Performance reviews take into consideration the employee’s growth from a big or small picture perspective. For example, evaluate what they’ve improved on over an extended period of time and what current projects they are working on. Acknowledging past and present work helps the employee see their contribution to the organization.

For employees who are staying on task, performing well, and showing consistency with their work output, reviews can feel a little disappointing when there isn’t any way to expand their role. One way to still provide value to that employee during a performance review is to work together to create professional goals.

Guiding employees through professional development still provides helpful feedback during a performance review even when they aren’t showing areas needing improvement. You also want to gauge their capacity and how their current responsibilities line up with their title and scope of work.

The Benefits of Receiving Employee Feedback

You are communicating openly with your employees during performance reviews. But are you taking advantage of the opportunity to receive feedback? While some employees feel confident speaking up outside of reviews, others may not feel comfortable doing so unless prompted. Asking for feedback from employees is an excellent opportunity to learn how they are doing and how they perceive their role within the organization.

Employee feedback can help you improve your leadership skills. Plus, it shows employees that their voice is not only heard but valued. It is an exercise in emotional intelligence for leadership to listen without judgment or criticism of employees. Creating a safe environment for them to speak without fear of retaliation.

Best Practices for Raises and Promotions

Your goal as a leader is to encourage growth and development. So it’s no surprise that employees may be seeking raises and promotions along the way. Most companies have policies in place regarding promotions and raises, but if your company doesn’t, here are some things to consider:

Raise vs. Bonus

Those performing well at work expect to be compensated for a job well done. So if your company has a standard percentage rate to give as a raise, you want to disclose that information to employees. This way, expectations are clear.

If you aren’t already doing so, keep in mind what some of your closest competitors may offer through salary, raises, and bonuses. Again, leveraging this information gives you a sense of what your employees may be expecting.

Another factor to consider is if it’s more cost-effective to provide performance bonuses instead of an increase in annual base salary. For example, you may give a bonus at the end of a project, or reach a company milestone, but not necessarily tie it to a performance review. This may be a good alternative if your budget doesn’t allow annual raises.

Promotions

Providing a structure that incentivizes employees to strive for success can help improve the workplace, keep motivation up, and reward a job well done.

If your company doesn’t have a structure in place for promoting employees, here are some times to consider the move:

• When an employee is consistently committed to their work.
• When an employee goes above and beyond their scope frequently.
• When their work and performance exceed expectations.
• When they seek to help others or pitch in when teams could use an extra hand.
• If they are asking for more responsibilities.
• When they master their craft or technical skills and could become complacent if not stimulated to strive for more.
• If an employee has gained more educational qualifications or certifications.
• If an employee demonstrates leadership potential.
• If they take ownership of tasks.
• If they manage themselves and require little to no supervision.

While promotions and raises are only a part of evaluations, the real benefit from a leadership perspective is creating an environment where employees feel valued and heard. It can be challenging to know how or when to provide constructive feedback, but as a leader, you can create a structure that allows employees to feel valued no matter where they are in their careers.

Are you considering implementing or restructuring a new performance review system? Book a consultation below and let’s devise a plan together.