Performance Reviews: Painful Tradition or Powerful Tool?

For many employers and employees, performance reviews have earned a reputation as a time-consuming, uncomfortable formality. Too often, they are rushed, backward-looking, or treated as a check-in-the-box. But when done thoughtfully, performance reviews can do far more than document past performance. They can be used to motivate employees, inspire new ideas, and increase retention.

The start of the year is an ideal time to reassess whether your performance review process is merely a tradition or a tool that actually works. And, the first step to revamping your process is knowing what tools you have in your toolbox.

Below we’ve outlined common types of employee evaluations, as well as pros and cons to consider as you select which ones are right for your business.  CEA members can also access our comprehensive Performance Evaluation Toolkit with sample forms and steps to build your program. Call our HR Advisors at 800.399.5331 for additional assistance.

Performance Review Types

Rating Scale System: This evaluation is probably the most common and easily recognized. The Rating Scale System focuses on preset criteria and offers a score for each category. The criteria can be based on company or department goals, certain metrics, individual behaviors or anything else management wants to assess. In this method, the criteria and rating standards are the same for all employees. For example, the rating scale may be from 1-5, or you may use terms like “Poor, Satisfactory, Excellent.”

Pros: provides consistency for measuring performance, helps to compare employee performance based on objective factors, works well for metric-based roles

Cons: time-consuming, discouraging for employees who receive low scores, often less focus on soft skills and emotional intelligence

 Self-Assessment Review: This evaluation involves an employee identifying how they view their own performance. For instance, the employee might be asked to rank various job responsibilities in order of proficiency or score themselves in individual categories. After the self-assessment, the employee and their supervisor meet to discuss further. This kind of review empowers employees to take an objective look at their performance and make their voices heard. This evaluation may also be blended or combined with a Rating Scale System conducted by the supervisor.

Pros: employee feels involved and empowered, allows for increased reflection, puts responsibility on employee to support claims of good performance

Cons: The employee might not be self-aware or good at tracking their own progress, which may result in less feedback from management

360 Degree Review: A 360-Degree review solicits feedback from everyone who interacts with a given employee in addition to managers. In this model, peers, direct reports, and supervisors all submit feedback. The feedback is compiled into a report, which is then presented to the employee. The idea is that diverse feedback will help employees get a better sense of their performance and relationships at work.

Pros: provides diverse feedback beyond just work metrics, can lead to greater self-reflection, provides insight into team dynamics, often best for supervisory roles

Cons: an employee may take feedback personally, and can risk harming relationships with coworkers if the feedback is not constructive

30-60-90 Day Plan: This is a structured check-in process often used during the early stages of employment or after a significant change in role or performance. It is best for new hires, newly promoted supervisors, or as an alternative to a more formal performance improvement plan (PIP). 

Pros: establishes goals that can be measured on a quicker timeline, keeps new hires and newly promoted employees on track, and offers frequent opportunities for supervisor feedback

Cons: time-consuming for the supervisor, not intended for long-term performance management

Personal Development Review: This review style zeroes in on employees’ personal goals and then assesses them based on the progress made to reach them. Setting personal goals makes employees feel more engaged and gives them a “purpose” throughout the year.

Pros: motivating, results-oriented, employee has “buy-in” in the process

Cons: employee’s goals may not align with company interests, supervisor must ensure goals are detailed/developed and not subjective

Of course, selecting the right approach for your business is just the first step. Leaders must ensure the review process is actually meaningful. For best practices to perfect your performance reviews, CEA members may refer to our Performance Evaluation Toolkit!