On this page
- Understand why reviews are important
- Set up strong review processes
- Develop and measure useful KPIs
Performance reviews and appraisals
KPIs, performance reviews and appraisals help employees know how they have been doing and what further development or training they need to do to improve. Reviews should be available to all staff. Use the performance and development agreement plan to outline your employee's expected performance standards and goals as well as skills improvement.
Objectives give employees focus and appraisals make them feel that their good work is recognised. You can also discuss any weaknesses or problems and identify solutions together.
A big part of successful performance reviews and appraisals is being able to communicate well with your staff. Use our communication skills for managers to help.
Set up the processes
The most effective way is to have a combination of structured face to face discussions with diary notes quarterly then half yearly reviews with a full review at the end of the year. Also, remove the prospect of a discussion about pay. Retain this for another time as an employee should be able to leave their review thinking about performance.
In conducting a performance review you should:
- ask the employee to rate themselves
- provide a written performance review to the employee
- make sure that you can back up any positives and negatives with specific examples
- conduct a review meeting within 48 hours of the written performance review
- note and file any employee comments and then ensure that the final version goes on file.
Customise this template to your company's requirements and hand to employees to complete prior to a performance review. You should use the performance management section of our HR template to embed the process in your business.
If an employee is consistently failing and the situation cannot be salvaged, you may need to dismiss the employee.
Key Performance Indicators (KPIs) for your staff
You can incorporate KPIs into your business by setting and measuring personal targets for individual staff members or departments. Performance management KPIs should:
- tie into the overall business objectives
- measure areas that will influence the success of the business
- indicate areas requiring further action.
The areas you choose to measure should relate directly to the core activities of your business. The performance indicators you choose will differ depending on your specific business type, operations and industry. For example, KPIs may be used to measure such areas as:
- unit sales
- profit per item
- product quality
- customer service
- time required to complete tasks
- customer referrals
- staff turnover.
Measure KPIs over time
KPIs should allow you to set measurable and achievable goals for improving core business activities. After introducing a method for examining and recording KPIs, make sure you maintain records of your results so that you can track performance over time.
Revision and review of agreed KPIs
If you regularly reconsider your performance indicators alongside the ongoing development of a business plan, you'll find your KPIs are more likely to stay aligned with your changing business requirement.