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4 Reasons Performance Reviews Are Here to Stay


Performance reviews have recently been put through the wringer as more and more people are claiming annual reviews don’t drive employee performance. Because of this association with annual reviews, the validity of performance reviews as a whole in performance management is being unfairly criticized.

What many of today’s critics fail to take into account is that performance reviews are just one element of an all-encompassing performance management system. And the accurate use and facilitation of that system is what brings the entire process full-circle. Performance reviews are not dead (and don’t have to be just once a year). They are a critical aspect of managing, influencing and growing employee performance and as with all things in life, how effective they are is very much impacted by, “What we make of it.” Here’s why performance reviews are here to stay.

They Facilitate Employee Growth

Employees today want to be attuned to their own strengths and weaknesses. In fact, 78% of employees who report having a meaningful discussion with their manager about their strengths feel that their work is making a difference and is appreciated.

Tweet This: 78% of employees feel their work is appreciated when managers do this:

With the right employee performance management system, performance reviews don’t just have to be a once a year, get in and get out process. Employees can hone their strengths around individual and company goals that are discussed during their performance reviews, which can be as many times a year as management chooses. Managers and employees alike, can keep track of how they get things done, whether or not they have the resources needed and if barriers to success can be solved with the help of their manager.

Today’s workforce wants career development and performance reviews are going to get them where they want, while keeping their goals and progress aligned with those of the company. If these are things that your company wants for their employees, don’t wait another day to implement a performance review process that enables them to develop their career and ultimately, your company’s bottom line.

They Keep Processes Intact

Performance reviews are a consistent way to not only develop employee performance, but ensure that employees are up to date on what processes the company has in place. Did you know, according to recent Gallup research, only about half of employees strongly know what is expected of them? The communication gap that exists for those unfortunate employees doesn’t have to exist for your company. Take the time to research performance management systems that are tailored to ensure employees are never in the dark about what is expected of them. Find what works for your company and start aligning processes as soon as possible.

Tweet This: Only about half of employees know what’s expected of them. Here’s the solution:

They Help Set and Scale Compensation

Performance reviews are a critical aspect of employee compensation management. Managers who are able to review past performance with current performance can make sound decisions on whether or not an employee is being paid what they deserve. Did you know, according to recent research done by Payscale, 79% of employees paid above market rate believe they’re paid either at or below market rate? The facilitation of performance reviews gives managers a chance to educate employees about the current market rate and keeps employees aware of their own progress so that they aren’t blindsided by conversations about compensation.

Tweet This: How do you decide if your employee compensation is fair?

Take it one step further with a performance management system that houses a compensation dashboard to provide recommendations, automate the compensation approval process and keep compensation offers aligned with company budget.

They Create the Feedback Loop

According to research done by Towers Watson, as of 2012, only 44% of organizations do a good job of using technology to deliver the performance management process. Having the ability to document employee performance through a robust performance review process means that your company has documentation to work from for the future, whether it be to improve one employee’s performance, create new standards for your teams or to identify areas in your performance management process that may need to be changed or updated. It’s also important in case those documents are ever needed for legal purposes. With an online performance management system, companies don’t have to worry about keeping (or losing) important performance review paperwork.

Performance reviews are here to stay and with the right performance management system, companies can ensure their review process is going to positively impact their bottom line. How does your performance review process compare?

Not sure how to answer that? We’re hosting a FREE webinar about performance management on February 25th, 2016. Save your spot today by going here:


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