To review or not to review… – All about performance reviews

There was once an employee at a software company, let’s call him ‘Bob’. Bob was a top-performing software programmer, very rarely away from his desk, quiet, reserved and an ideal employee in many respects. Bob’s performance reviews were near perfect; his employer gave him praise for the speed, accuracy and efficiency in which he performed his work.

Then it turned out that Bob was in fact outsourcing all of his work tasks to China, his day to day activities consisted mainly of social networking, YouTube and watching cat videos. He paid the consultancy firm around $50,000 per year, which was approximately one fifth of his total salary.

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There also was, once another employee, Jeremy. Jeremy was a systems administrator for a well-known and substantially sized bank. Jeremy decided to automate his daily tasks to give himself time to build online gaming platforms. Both Bob and Jeremy were promptly terminated, so where are they now?

Jeremy is now a millionaire web entrepreneur, launching several highly lucrative businesses and while we can’t confirm Bob’s next move, this was not his first ‘outsourcing offence’. Whilst there is no question, in both cases, of misconduct, there is another question that needs to be addressed, how did this manage to go overlooked during performance reviews?recent reports estimating that only 35-40% of Australian organisations feel they manage performance reviews well

Bob’s performance reviews in particular were consistently positive, which in reality makes them hugely ineffective, as they did not manage to identify Bob’s severe lack of engagement. In addition, outsourcing work for one fifth of its current cost whilst not compromising on quality is a smart business move. Both Jeremy and Bob possess certain desirable qualities, that when used in the right way, could be of benefit to a business. Would a better performance review process prevent such a misinterpretation and misuse of skills?

Performance reviews, when done well, can boost morale, improve performance and encourage commitment. They can build on the strengths of the individual, help with career development and generally enhance the employment experience. However, when poorly executed, they certainly do more harm than good, with recent reports estimating that only 35-40% of Australian organisations feel they manage performance reviews well. The rest describe the process as negative and stressful, saying they add very little value and overlook what is most important. It goes without saying that both Jeremy and Bob were highly disengaged, so are outdated approaches to performance reviews the root of the problem?

Annual reviews, bad idea?

Annual reviews can create feelings of dread for both parties involved. To change the way in which managers and employees feel about this process, it needs to be transformed into an ongoing business activity. Regular conversations or check-ins will enable progress to be monitored effectively. Reviews should also consider the employee’s well-being, job satisfaction and general happiness, not just their productivity. This way, regular meetings can be kept casual and this encourages better communication.

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Negative focus

Traditional reviews focus on the negative and most employees will be neither ready nor well-equipped for criticism. Managers should also collect positive feedback from peers; this creates a 360 degree effect, gives a multi-angle perspective and is also very easy to both deliver and receive. Regular, ongoing conversations of this nature allow employees to raise their own concerns, for example, lack of stimulation or job satisfaction.

Look ahead, not behind.

The focus should be primarily on the future, on what is required to move the employee and the business forward, including considering new ways of doing things. Managers need to be clear with expectations and ensure their employees have the tools they need to meet objectives.

Encourage self-evaluation.

Encouraging employees to evaluate themselves will help with motivation and self-esteem, plus delivering feedback from peers and highlighting achievements is helpful. The nature of a performance review can be tailored to suit the needs of both the employee and employer. It should be based around the requirements of the role, ensuring both parties are clear on what is and what isn’t acceptable. The underlying goal is to open and maintain the lines of communication, so you can avoid an encounter with an employee like Bob.

Melinda Gibson

Melinda is a HR Manager with Employment Innovations (EI), based in Melbourne; she primarily assists clients in the retail and hospitality industry. With over 10 years of experience in human resource management, Mel provides advice and training on HR practices and employment law, assisting clients with the implementation of effective human resource tools and strategies. Visit

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