Having an employee performance review system in place is important for a number of reasons including:

• Enhances coaching and mentoring opportunities for managers and supervisors.
• Clarifies the performance criteria that are important for employees to understand as important in doing their respective jobs.
• Defines a clear basis for wage increases, promotions, disciplinary action, and other important job related issues.
• Reinforces that performance and pay or incentives are rationally tied together.
• Serves as motivation to continue to focus on improving performance.
• Brings consistency to the organization in terms of how employees’ job performance is measured.
• Creates a means for clear and complete documentation of job performance.
• Helps identify training and development needs.
• Assists in associating company goals and objectives with employee goals.
• Communicates important information to the employee about how they are perceived relative to the work they do on a daily basis.

All organizations should have some sort of performance management system in place. Many “systems” in place are not well defined and/or they do not address critical performance variables (competencies) commonly associated with work.

 Employers should understand that personal biases enter into the overall perceptions about employees. What many managers believe is factual about an employee is often nothing more than their own biased perception of the employee’s performance.

Assessing an employee is sometimes a very unfair process. In most businesses, there are often misperceptions about various employees. And unfortunately there are a lot of managers and supervisors who are just not good mentors and coaches and, therefore, the employee does not have the benefit of correcting performance issues prior to their annual performance reviews.

Adding to the problems associated with personal bias, misperceptions, and poor coaching is the fact that many performance review sessions (the actual meetings to review performance) are poorly conducted by the manager. 

It is important that reviewing performance be taken seriously because it is a critical feedback mechanism for employees and a chance for managers and employees to share valuable information. But keep in mind that formal performance reviews are not the only time that feedback to employees should be given.

If you are looking to build a performance review system or enhance your current system, the Performance Review Manual provides everything you will need to do both.