Employee Performance Review: A Comprehensive Guide

Viren Kapadia October 04, 2023
Employee Performance Review: A Comprehensive Guide

What Is an Employee Performance Review?

Employee performance review is a formal regulated process of assessing the employee’s work performance and articulating future work expectations. The purpose is to provide constructive performance feedback and assist in goal setting for professional and personal development.

Performance assessments differ significantly in format and structure across organizations and industries. They may include self-assessment checklists, rating scales, performance tasks, or formal observations.Effective performance reviews help employees identify potential areas of improvement and growth while still maintaining cordial business relationships.

Importance and Benefits of Performance Review

Managers use performance reviews to prioritize career development opportunities and motivate employees.Continuous performance feedbackhelps employees modify their behavior or reorient their efforts toward the correct goals. Some of the other benefits include:

  • Clear Roles and Responsibilities
  • Performance management and review help employees clarify their specific job duties within the company. This eliminates ambiguities in the workplace, making every individual accountable for their work and responsibilities.

  • Career Growth and Development
  • By identifying the employee’s strengths and weaknesses, a performance review helps managers develop a growth plan to enhance the employee’s skills. This can act as a basis for advancement and attainment of long-term career goals.

  • Improved Communication
  • The structured nature of employee performance assessment contributes to productive and better all-around communication in the workplace. Its mechanism guides the conversation for both constructive criticism and positive reinforcement, easing tensions when discussing something challenging.

  • Rewards and Bonuses
  • Some companies issue merit-based pay increases, bonuses, and other rewards to employees who perform well on assessments. Exceeding expectations during the performance appraisal process can open doors to career advancements.

Types of Performance Review

  1. Weekly or Fortnightly Performance Review
  2. A weekly review facilitates record-keeping and ensures that a project, especially a fast-moving or agile one, stays on track progressively. Weekly reviews need not be specifically goal-oriented and don’t require the collection of large amounts of data every time.

  3. Monthly Performance Evaluations
  4. Monthly performance reviews ensure that new projects stay on track and meet the organizational goals. They are beneficial for companies that employ freelancers or individuals on short-term contracts. It is also useful during the onboarding process of new hires as they move from probation to actual performance.

  5. Quarterly Performance Appraisals
  6. Evaluating performance every business quarter can give key insights into employees’ progress. Three months is enough time for employees to hone their skills and achieve their targets or goals. Managers can also create quarterly assessment reports by combining weekly or monthly reviews for performance review meetings.

  7. Annual Performance Assessment
  8. Though some organizations still conduct annual performance appraisals, they are widely being replaced by 360-degree performance feedback throughout the year. Traditional performance evaluations looked at past performance instead of looking forward to future performance.Moreover, a year without feedback is too long to be a fair evaluation of an individual’s efforts. On the contrary, collating feedback and reviews throughout the year into a single 12-month report can be a useful bank of information.

How to Conduct Performance Reviews Effectively?

The following are 6 best practices that can help you conduct effective performance reviews:

  1. Track Performance Every Week
  2. Invest a few minutes every week to keep track of each employee’s performance. This facilitates annual appraisals as you can simply compile the information at the end of the year. Otherwise, formal annual reviews can become overblown, with plenty of information that is difficult to manage.

  3. Conduct a Fair Evaluation
  4. If you’re going to list only the negatives, there’s no hope for improvement. You must explain what the employee is doing correctly, along with the areas they need to improvise on. With a negative approach, you can end up with an employee who is both uninspired and dejected.

  5. Appreciate Top Performers
  6. Highly productive employees who shape the company’s creativity, innovation, and culture are often neglected during performance review cycles. When these individuals are not occasionally recognized, they could lose their motivation or passion. It’s essential to express gratitude and convey how much the company values the results of top performers.

  7. Provide Tips for Improvement
  8. Remember, your duties are not limited to being the manager. You also need to be the coach. If you’re reviewing someone who is aware of their problem, don’t stop at stating the obvious. Instead, go the extra mile and provide helpful solutions.

  9. Deliver Performance Reviews Face-to-Face
  10. Your employees deserve a chance to ask questions. The best way to conduct performance reviews is face-to-face. Schedule a meeting in an out-of-office location to provide a comfortable atmosphere. This approach leaves ample time to present, listen, process, and respond while preventing miscommunication.

  11. End Your Interaction on a Positive Note
  12. End your review with mutual respect and understanding. Leave the evaluation on a note of encouragement. No one ever planned the interaction to end on a negative note. This will inspire employees to perform remarkable feats of progress

Performance Management Software and How to Implement Them

Top-quality performance management software enhances collaboration between managers and employees and delivers real-time reports. It can help you finish the process faster and store the results for future review. The following are two ways to implement the software:

  1. Performance Management Solutions
  2. Certain performance management solutions comprise an open API system that enables software customization to match the size and scope of your HR needs. They may include the following features:

    • Provide a platform where employees can self-serve some of their HR requirements.
    • Allow HR staff and managers to set goals and monitor them.
    • Produce custom reviews.

  3. Professional Employer Organization (PEO) Services
  4. PEO companies are useful for small and midsize organizations to provide effective performance reviews. Through a co-employment contract, the PEO companies allow you to outsource HR tasks and performance reviews. Furthermore, the PEO company’s apps provide employees and managers with real-time access to payroll, benefits, and time.

Performance Review Do's and Don'ts

Performance feedback for employees aims to guide, not criticize, your team. Constructive feedback makes team members feel valued for their contributions and helps them practice the correct actions.Implement the following performance evaluation techniques to achieve the above goals:

Do's Don'ts
Highlighting achievements and providing constructive criticism. Emphasizing relationships and passive-aggressive statements.
Relying on quantifiable data and conveying a positive intent. Acting on a hunch and jumping directly to performance scores.
Describing the observations in detail and indicating areas of improvement. Making blank statements and suggesting fixes.
Providing an opportunity to respond and comment on the impacts made. Having a one-way conversation and commenting on behaviors or actions.

Free Performance Review Template

If you're struggling to create a review template for organization-wide use, consider using this free performance review template to get started.

Free Employee Performance Review Template


Regular feedback and coaching is the key to creating a productive and engaged workforce. A positive and efficient work environment is one where temporary performance slips are resolved quickly, and A-level work is acknowledged regularly. Having a documented employee performance review process in place is your first step in this direction.

Looking for innovative learning technology solutions? Gyrus can be your digital transformation partner! With Gyrus LMS, you can create your performance rubric to provide quality and effective feedback. To learn moreabout our services, schedule a demo with us today!  


  1. Which skills should a performance review assess?
  2. A performance review must assess the following skills:

    • Problem-solving
    • Collaboration and teamwork
    • Communication
    • Reliability, attendance, and punctuality
    • Accuracy and quality of work
    • The ability to meet deadlines and achieve goals
    • Any role-specific competencies

  3. Why is performance management software important?
  4. Performance management software ensures teams and employees are engaged and aligned with company goals. The system replaces annual performance assessments with real-time performance tracking, feedback, and goal setting.

  5. What is the ideal frequency to conduct a performance review?
  6. It is recommended to conduct performance evaluations every 6 to 12 months. Schedule reviews of new hires or entry-level candidates sooner, such as after 3 to 6 months.

  7. What should a manager say in an employee performance review?
  8. Divide your speech into the following parts to determine what to say in a performance review:

    • Constructive feedback on the employee’s behavior and actions.
    • Appreciation of the employee’s achievements and efforts.
    • Results and follow-up plan after the review.

  9. What are the 5 performance ratings?
  10. The standard 5-point grading system for employee performance reviewis as follows:

    • 5 – Outstanding
    • 4 – Exceeds Expectations
    • 3 – Meets Expectations
    • 2 – Requires Improvement
    • 1 – Unacceptable

  11. What are the key components of a performance review?
  12. The following are some of the critical components of an employee performance review:

    • Employee self-assessment forms
    • Performance review forms for managers
    • Performance improvement plan
    • Employee development plan
    • 1:1 conversation with a manager or direct supervisor

  13. Who conducts an employee performance review?
  14. Generally, the manager conducts the employee's performance review as they have complete knowledge about the employee's job roles and responsibilities. Sometimes HR staff, a team leader, or a senior leader may run the performance review.

  15. What's the best approach for employee performance reviews?
  16. Instead of focusing on past performance in an annual review, a better assessment system regularly engages the workforce to better gauge their job satisfaction levels. The best approach for performance review is to incorporate continuous performance feedback.

  17. What should a performance review look like?
  18. Employee performance reviews must focus on measurable and observable performance. They should include real examples from the previous period and follow-up steps to take. Employees must have a clear understanding of how to make improvements.