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Performance reviews, also referred to as performance appraisals, are typically utilized on a quarterly and/or annual basis to provide evaluation and feedback on employees' accomplishments, areas for improvement and failures. Although the purpose of the performance review is to encourage employee growth and development, many employers dread them and may not even take the time to fill them out thoroughly. Read on to find out why performance appraisals are necessary and how they can be utilized to improve your team's success.

Who should complete the evaluation?

It's unfortunate, but often times the structure of an organization negatively affects employee performance reviews. Typically, managers evaluate their direct reports. However, this is not always the case. Some employees may be evaluated based upon feedback from others within the organization. While these sources may be reliable, it can cause grievances from the employee because they are unsure who gave the evaluation and what they can do to make a change. If you or your organization relies on reviews from other key players when filling out performance appraisals, try to make those individuals available to the employee if and when additional elaboration is requested.

What needs to be included?

Performance reviews are all about the 'what.' What the employees have been doing well, what they have been doing poorly and what they can do to improve. However, providing a quick list of these items will not be beneficial unless a clear map of specific changes and how to get there are provided. Some of the information to cover includes the end goal, steps to get there, resources available, measures of success and rewards for completion. Additionally, you'll want to focus on strengths of your employees so they know what they're doing right and can build upon those skills, while only providing factual information for any criticisms.

When are performance reviews the most effective/beneficial?

Although it's easier (and may only be required) to complete the dreaded performance review on an annual basis, this is not the best option. Opting for a quarterly or even monthly review system will help keep employees on track all year long. If you're waiting until year end to let your workers know they aren't performing well, it's only going to hurt your team and company's overall success. Additionally, employees will be less than thrilled to find out at the end of the year that they've been doing something wrong for months. With a quarterly or monthly review system, you're able to give timely feedback that can be implemented immediately.

Where should the results be presented?

Although it is common for the HR department or someone in administrative support services to provide designated evaluation forms for managers to fill out about their employees, they're not you're only option. Unfortunately, templates do not provide room for real feedback and are often worded in very vague and unclear ways. For example, many HR evaluations require managers to rank the employee as Exceeds, Above Average, Average or Needs Improvement. While these might have some value, it's not much. Instead, it's important to provide specific examples, and one way to do this is by setting a meeting with each employee to discuss the areas that you're scoring. This will allow a two-way conversation instead of an ambiguous review sent from HR through an e-mail. This also shows your employees that you care enough to take the time to help them improve, and it gives them the ability to ask questions on the spot.

Why are performance reviews important?

Aside from the obvious fact that employees want pay raises and promotions or that HR requires you to submit evaluations of your direct reports, performance reviews actually serve a purpose when done correctly. It's not as simple as performance review = raise; it's about employee development and motivation. To your workers, a raise is more money, but to you, a raise for your employee is incentive to continually improve and strive for more. Additionally, this is a time that you can work hand-in-hand with your employees on areas they need to improve upon, setting goals for the next review period and providing examples of things that they've done well and things they've done poorly.

How should I prepare?

Instead of waiting until the day they're due or even submitting them late, try to view performance reviews as an ongoing process of learning and growth for yourself and your employees. One common problem with performance reviews is that managers are too busy to set aside time to actually evaluate each employee's work from the past quarter or year. Unless you're working with a very small team, it's unlikely that you have notes on specific instances of success and failure. Ideally, you should set up a system for keeping track of specific examples, setting clear standards for change and evaluating performance in unambiguous terms. Clarity is the key to preventing unnecessary confusion or frustration and also developing a path for career advancement.

Although quarterly and annual performance reviews may sound about as fun as filing your taxes, keep in mind that your reviews will affect employee and team morale and performance. By spending the extra time to set attainable goals and provide specific suggestions for improvement, you'll be setting the team and company up for future success.