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Performance Review  - Which Method is Right for Your Enterprise?

Posted by Yen Phuong Nguyen on

As a manager, you might think that going through the process of performance review is a daunting task. However, it plays an integral role in boosting the relationship between the managers and the employees.

According to a survey conducted by consulting firm Achievers, 57% of CEOs believed they gave their subordinates adequate recognition. Meanwhile, from the same study, only 9% of the employees agreed that they received the rewards they deserve. This means a great portion of your staff going to work every day feeling unmotivated, underappreciated, and might quit the job.

Read more: Motivation - How does it work for sales?

Performance Review  - Which Method is the Right One for Your Enterprise?

That is the reason why reviewing your employee’s performance regularly is essential. Based on the results and feedbacks, both the managers and the employees will be able to identify their and weaknesses, thus, resolutions can be provided timely and accordingly.

Read more: KPIs - the key to identifying your top performers

The different ways of doing performance review

Performance review, or performance appraisal, is the process of evaluating the employee’s performance on a predetermined basis. The purpose of the review is to give the employees the recognition and motivation by rewarding them monetarily, or by giving them promotions or training.

Read more: Development - This is not an event... it's a journey!

There are many different performance review methods, each has their own pros and cons. Depending on your company’s policies, procedures and objectives, you should choose the appropriate method. And it should be done in the most unbiased judgements possible.

1. Self-evaluation

For this method, the employees will self-evaluate their performance against predetermined criteria. And the results will be used afterwards in a more in-depth discussion between line managers and their subordinates.

One issue managers should take into account when using this method is that the employees may rate their performances either too high or too low, focusing mainly on their accomplishments, and as a result, disregarding their weaknesses. There are also differences between what the employees thought they deserve versus their manager’s side of the story. Discrepancies in perspectives are unavoidable.

Read more: [Infographic] The power of expectation

This method is best when used in conjunction with another appraisal method. Furthermore, more objective information is also crucial to help guide the employees, enable them to see the bigger picture of how their performance fit in with the organisation’s overall vision.  

2. Behavioural checklist

In simple terms, a behavioural checklist is a form detailing the various behaviours and competencies related to the job that the employees are expected to follow.

Behavioural checklist performance review

This method is considered to be less hostile than other methods due to the evaluators, or the managers, merely describe the employees rather than comparing their behaviours with another.

Read more: Professionalism in the workplace - Do's and Don'ts

The method is also useful for employee development. The downside is the method requires extensive investment in terms of money and time to construct the instrument.

3. 360-degree feedback

360-degree feedback provides the managers with a comprehensive look at the employee’s performance via an intensive assessment and peers/ non-supervisor’s feedback. Due to the 360-degree view of the method, it can also be used to review the employee’s character and leadership skills.

360-degree feedback performance review

Read more: Understand the fundamentals of 360-degree feedback

When undergoing the 360-degree feedback, beware of the personal feelings interfering with the result. Try enforcing anonymous feedback which allows the staff to give a more honest response when they don’t want to hold responsible for giving critical comments.

4. Management by objectives

Each member will work with their line manager to set individual performance objectives they need to accomplish before a set timeline. In order for this appraisal method to be effective, your organisation needs to have a clear definition of company’s values, culture, and success.

Read more: Understanding company culture and its importance

The objectives, though customisable, still have its downsides. If the deadline for the objectives is too far away, the employees might already have shifted their focus to something else. Therefore, it is critical to set specific, realistic goals and a short timeline. If possible, managers should go through the evaluation process monthly to timely resolve any issues.

Management by objectives performance review

5. Rating scale

Rating scale probably is one of the most commonly used performance review methods which evaluates the employee based on a set of criteria – behaviours, competencies, completed projects, KPIs, etc. The rating scale values usually rank from 1 to 10 or 1 to 5 points.

However, there is evidence where managers were unsure of how to properly score their employees, as a consequence, they tend to rate them somewhere in the middle. This could mislead the reading of the final results. Unless the rating scale method is backed by other evidence-based documentations, findings from this review can negatively reflect on the manager’s view of an individual.

All of the above performance review methods though have their own disadvantages but can still be useful if in the right hand. Both managers and employees must understand the purpose of the review process is to draw honest and constructive feedback from which the employees can continuously grow and thrive.

As a manager, prior to establishing a good performance review method, you must clearly define:

  • How does your organisation define “success”?
  • What’s your company’s culture, core values, goals, etc?
  • Do you have a well-defined metrics in which your feedback can be based on?
  • Can you guarantee no personal feelings or opinions are involved in the process?

Performance review requires you put in a lot of time and effort to carefully and accurately evaluate a staff member. Therefore, take your time to make your own decision, choose the method you are most comfortable with, and remember, transparency is key.

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