Most businesses provide employee performance reviews at least annually. Unfortunately, too many fail to be consistent or default to an impersonal template approach. Yet, strategic performance reviews can be a tool to create a powerful workforce environment.

Everyone wants to know "how they're doing" on their job and in their workplace. Ideally, an employee performance review can provide that assessment. When done well and consistently, reviews can help workers perform better and feel more engaged in their own performance and success. 

When done poorly - or not at all - employee engagement and their sense of job satisfaction suffers. The unfortunate reality is that too many businesses are either inconsistent with their employee performance review process, or lack a process completely. Either of these scenarios is a detriment to both the employer and the employee.

But it doesn't have to be that way.

Benefits of an Effective Employee Performance Review Process

Aside from the typical purpose of helping managers make decisions regarding promotions, transfers and rewards for employees, there are a number of other benefits for both parties. They include the following:

• Performance awareness for employees. Most people want to know how managers see their job performance. In addition, a regular review allows managers to show employees what an employee needs to do or change, and how he or she can contribute further to the company.
• Employee self-development. A thoughtful, comprehensive performance appraisal allows managers to provide positive feedback as well as identifying areas for improvement. In addition, it provides a forum to create a development plan with the goal of improving an employee's skills.
• Establishing long-term and short-term goals. A performance review allows for more than a static "snapshot" of a worker's past performance. It is an opportunity to identify and establish employee goals for advancement, as well as professional development.  

What this means for managers is that they can be involved with the daily work performance of their direct reports as well as everyone's development, improvement and potential bonuses or promotion. This last point is critical since having a compensation system is a crucial element for employee self-development. Asking employees to improve is good, but you need tangible motivation to expect them to truly work on themselves.

Another aspect of a comprehensive performance review process is that it provides a structure for employees to clarify expectations and discuss other issues with their managers. There is a great deal of talk in HR and workforce management circles about employee engagement, but too many work environments do not allow for much meaningful engagement.

However, by regularly sitting down with a worker in a confidential, one-on-one setting will provide consistent opportunities for real and productive engagement. 

Structuring an Effective Performance Review Process

One of the first ground rules is to stop thinking in terms of and "annual" review. An effective review process is ongoing throughout the year and is a dynamic process as opposed to a "one-off" event. An ideal schedule is to have quarterly review sessions with each employee over the course of your fiscal year. As most businesses tend to offer pay increases, bonuses and promotions at the start of a new fiscal year, this is a convenient approach.

Your "end of the year" session should serve as both a final review and assessment for the year, and to engage in planning and goal-setting for the upcoming year. Then, for the next three quarterly sessions, that manager and employee would, among other things, review and assess progress on the previously established goals.

One of the benefits of this type of structure is that it helps keep employees engaged in their own development and success continually throughout the year. Knowing that there is real accountability along with tangible benefits and results works to improve both commitment, engagement and retention.

In addition, taking the time consistently and regularly with employees more than once a year allows managers to communicate expectations, concerns or praise. This is an opportunity to instill the values and standards that set a company apart from the rest.

Your Workforce Management Partner

In addition to a growing and demanding role in recruiting, hiring, and continually training employees, the HR staff is responsible for other functions such as payroll management, tax filings, employee records compliance, and so forth.

Considering alternatives such as outsourcing is increasingly becoming a cost-effective and strategic option. Accuchex can help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.