The Pros and Cons of Performance Reviews

​Performance reviews have been an integral performance management tool within the workplace for decades. The early 20th century Industrial Revolution invited the necessity for the tool to effectively manage large, scaled organisations, which have since then become an ingrained facet within modern-day workplaces. Whilst performance reviews are insightful, informative, and valuable for employees, they can also be vehicles for personal dissatisfaction due to subjectivity, bias, and infrequency.

This blog post will outline the pros and cons to performance reviews and offer some thoughts on how to balance the approach. This will ensure that you are getting the highest performance out of your employees, in a suitable and thoughtful manner.

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Performance reviews help employees understand their strengths, identify weaknesses, and set improvement goals. They can provide a useful framework to build upon when aligning goals with personal growth.

Here are 4 positives to performance reviews:

1.       Structured Feedback

Structured feedback is a fantastic way for employees to see their feedback in a succinct and ordered manner. For many individuals, this analytical approach provides a thorough outline towards success, with strengths and weaknesses listed, eventuating in several goals to strive towards.

2.      Goal Setting and Motivation

Performance reviews are an ideal time to set future goals, as they naturally involve assessing feedback and planning for upcoming work. Setting goals can be overwhelming, but with a positive mindset, employees often gain motivation and pride in their objectives.

3.     Documented Growth

A documented archive of an employee’s strengths, weaknesses, improvements, and goals serves as a valuable record of their development. Reviewing this timeline can instill satisfaction in their progress and aid in decisions regarding promotions, raises, and terminations.

4.     Development Opportunity

If the reviews occur regularly and are staggered, it allows for the identification of skills gaps and training needs, which in turn initiates a myriad of self and team-driven professional development opportunities. This not only bolsters one's skills but also strengthens one's career profile for future endeavors in the job sphere.

Whilst performance reviews may be a mainstay for many organisations, they are not without their drawbacks. Many employees see these reviews as stressful and anxiety inducing experiences, as well as biased and inefficient ways of being managed and evaluated on performance.

Here are 4 negatives for performance reviews:

1.       Anxiety and Stress

Annual or semi-annual reviews can prove stressful for many employees which can eventuate into anxiety and unease. Not only can this reduce morale amongst employees, but also initiate a decline in performance, passion, and dedication to one’s role and responsibility.

2.      Recency and Subjectivity Bias

During performance reviews, managers may prioritise recent events over the entire review period, potentially resulting in unfair assessments. This intertwines with the subjective nature of reviews, influences by the manager’s personal biases, leading to prejudiced evaluations.

3.     Delayed feedback

Employees often benefit from continuous feedback, including real-time advice adjustments on completed tasks. Therefore, traditional performance reviews may not be the most effective form of communication. If organisations stick to strict performance review timelines, employees may miss valuable real-time constructive feedback that could enhance their efficiency and attitude at work.

4.     Time consuming

The process of a performance review can also be a timely task for both managers and employees. Dedicating time to talk through growth, challenges and successes is extremely important, but when time is valuable in the workplace, the traditional outline of a performance review may take away from more productive activities for both parties.

By analysing both the positives and negatives of traditional performance reviews, we can optimise their benefits and mitigate their drawbacks. This leads to a more balanced approach, championed by many organisations in their workplaces.  

Here are 4 approaches to a more balanced review system:

1.       Continuous Feedback

Continuous feedback involves providing immediate, regular feedback to employees at the time of task completion. This form of feedback includes regular one on one meetings, informal check ins, open lines of communication, and project-based feedback. This approach not only fosters skill refinement and accountability, but also boosts morale and productivity through trust and support.

2.      360-degree feedback

Many organisations are adopting 360-degree feedback, gathering input from peers, managers, stakeholders, and traditional top-down sources. This holistic approach offers a comprehensive view of performance, reducing bias and highlighting overlooked strengths and weaknesses.

3.     Clear Criteria

Creating clear and digestible criteria for performance reviews involves defining specific, measurable, and relevant points for assessment. This approach reduces potential subjectivity and bias, fostering transparency between manager and employee. Clear expectations increase employee focus and motivation, providing concrete goals and criteria to follow.

4.     Employee Involvement

To boost employees' pride and growth, involve them in the review process by encouraging self-assessments and collaborative goal setting. Active participation helps them understand strengths and weaknesses, fostering a sense of ownership and accountability. This approach enhances communication, strengthens manager-employee connections, and creates a highly motivated, productive environment.

Performance reviews come with both advantages and disadvantages. They provide structured feedback, goal setting, and essential documentation, yet they can also be subject to bias, lack timeliness, and induce stress and anxiety.

A balanced approach is crucial when prioritising performance reviews. Integrate continuous feedback systems, 360-degree feedback, and clear criteria to minimise bias and encourage employees to actively engage with their goals and progress.

Here at Sharp & Carter Recruitment Agency, we understand the importance of effective feedback to foster growth and development. If you are looking to refine your review processes or need expert advice on improving your talent management processes, visit our blog, “The Importance of Retaining your Employees” for some helpful tips.