Avoid These 5 Mistakes When Doing A Performance Reviews

One key purpose of a performance review is the employee evaluation. But common systems are capable of so much more. As an important tool of communication performance reviews enable a healthy dialog between manager and employee. When goals and the overall direction of the company are clearly communicated, misunderstandings are erased and overall motivation is enhanced.

Why are performance reviews important?

Development. If an employee is struggling with something or has fallen behind in their targets, performance reviews are a great way to find out why, come up with solutions and offer them support for personal development.

Recognition. The motivation and performance of employees get a boost when they feel recognized and their work is appreciated.

Value. Show your employees they are worth your time. Sit down with them. Talk and listen to what they have on their minds. Show them their value to the company and that your door is always open.

Satisfaction. In the long run monetary reasons will not keep a best talent in the company. Perspectives on personal growth, interesting tasks and according appreciation are what keeps best talents in a company long-term.

Dimpact has identified 5 common mistakes managers make with performance reviews. And, of course, we explain to you how to avoid them.

5 Mistakes Made in Performance Reviews

Mistake 1: Performance Review is done once a year

Performance should matter the year-round not just for the annual performance reviews. Especially in big companies and groups such annual meetings between manager and employee have become common company practice. This puts enormous pressure on the manager to do multiple talks over a short period of time. Employees, on the other hand, might wait a whole year to get the chance to say what’s on their mind. At the end both parties are disappointed because the manager is too overworked to listen and employees do not feel heard.

Dimpact Tip:

Performance reviews on a regular basis keep managers up-to-date and employees have the opportunity to point out issues as they arise. Solving problems instantly is valuable for the whole company. After all problems are not islands, they spread within the company often building up even more consequences. Besides problem solving and employee development, the talks should also incorporate praise on things done well. Keeping the motivation of the employee up.

Mistake 2: One scheme for all

Standardized evaluation sheets embody the danger of leading standardized performance reviews. In order to fit every employee they are usually kept very general, leaving manager and employee with little to no tangible output. The other extreme would be having no scheme at all and getting lost in the details. Both approaches will spark frustration in the parties involved and eventually slow down progress because important issues are not discussed and solved.

Dimpact Tip:

Every department, every role within a company is different. Setting the same evaluation standards on everyone will not work due to these differences. At the same time no scheme will lead to chaos. The truth, as so often, is somewhere in the middle. Well crafted evaluation sheets usually are separated into two parts, a general section where e.g. the overall performance and general work ethic is rated. The second part is the employee centric evaluation, like e.g., rating the customer relationship management of a sales person. If for example they lack a certain sensitivity in conflict situations, a specific training can be defined together.

Mistake 3: Burned resources due to lack of measurable goals

Especially in complex hierarchies the goals and intentions of CEOs and managers sometimes get lost on the way to the employee. The employee works with good intention and work ethic but might not have the same vision in front of him/her as the leaders. That is the worst case scenario because it burns resources. Eventually both sides will get disappointed because the manager or CEO feels the employee is not delivering and the employee works hard without recognition.

Dimpact Tip:

Set measurable goals. Sometimes quantifying objectives is not easy because there are (and should be) qualitative goals set as well. Try to see it as a bit of a hierarchy. The qualitative goals are at the top. They are a vision, like e.g. be the most inclusive HR company in your region. In a next step think about which department of your company can contribute to that goal and how. Like for example, talk to your marketing manager. You could ask for a PR campaign that creates a certain number of leads. Keep in mind, that everything is quantifiable if you break it down into specific goals.

Mistake 4: The meeting is my preparation

Everyone can relate to the situation: Hunderts of emails in your mailbox, your phone rings all the time and work is piling up again. There is simply no time to prepare a performance review There everyone involved enters the meeting unprepared, figuring their way out as they go.

Dimpact Tip:

As hard as it is to find time to prepare for a meeting, entering a meeting unprepared might save up time beforehand but usually turns around during the meeting. Figuring out what the purpose of the meeting is, who has to deliver which information and what is the desired outcome, make meetings more efficient and decrease time-consuming follow-up meetings. Also, performance reviews don’t need to be a surprise. You can talk with your employee beforehand and define what you want to talk about together. That way both parties go into the meeting with the right expectations - an important prerequisite to keeping everyone involved motivated and using time efficiently.

Mistake 5: Regular meetings and performance reviews are merged

You have regular meetings with your employees anyway so you can incorporate the performance review into them, right? - Yes and no. Squeezing too much into a half an hour or an one hour meeting will not lead anywhere. Certain things need to be discussed without a tight time constraint.

Dimpact Tip:

Make sure that the topics and issues certain meetings revolve around are prioritize according to the overall goals of the company. If you already set a meeting with your sales manager on a certain customer, it might make sense to do incorporate a short evaluation into the meeting. There are a lot of management systems out there that help you define precise goals and enable to measure them afterwards, like KPIs, MBOs or OKRs.

Eager to find out more about goal-setting systems? Check out our related blog article: [How to establish a goal-setting-system that leads to success](https://www.dimpact.io/blog/how-to-establish-a-goal-setting-system-that-leads-to-success/)