You’re not legally obliged, in NZ, to conduct performance reviews either. So why bother?Having a performance review system is an important tool for bringing the best out of your people and keeping your business running smoothly.
It gives the chance to gauge whether employees are achieving expected levels of performance and to offer them important feedback, guidance, and encouragement.
It is also an important way to identify and address poor performance before the problem leads to dismissal.
There are many ways to design and implement a review system, and it should be tailored to the size and structure of your company.
Quality, responsive software can help schedule and track key check-ins and meetings, taking care of all the admin-related tasks so you can focus on talking to your people.
Whether you base your review system around a personal development plan (PDP) with a yearly check-up, or more regular, informal sessions, there are some compelling reasons provided by RBA Partners MyHR why your organisation should do performance reviews.
They provide the opportunity for your employees to receive recognition for a job well-done or to highlight areas that may need more attention.
Acknowledgement and constructive criticism helps motivate people to strive for improvement. Without feedback, your team members may be unaware of poor performance and won’t be able to change it. Remember that performance appraisals work best as conversations. When giving feedback, also offer people a chance to raise any concerns and suggestions they have.
A study of global companies by best practice insights company CEB found that employee performance was 10 percent lower in organisations that don’t conduct reviews.
The lack of regular feedback and recognition was especially detrimental to high-performing employees, whose productivity was 28 percent less. If employees know what is expected of them and ways to improve performance, management can spend less time directing individuals and focus on building the business.
Target training and development
Performance reviews provide an excellent opportunity to identify and discuss any development and training requirements, which can be planned and then reviewed throughout the year.
By demonstrating your commitment to helping people be their best, you boost individual self-esteem and overall company morale. Having each member performing at their best means your team will be more productive.
As well as diminished performance, the CEB study found employees, particularly high performers, become disengaged without performance evaluations.
By treating employees as partners working towards common business goals, you build a team where people support each other to succeed.
This has the flow-on effects of aiding staff retention and improving the service you provide to your customers.