The Impact of a Well Conducted Performance Review

— by taylor (2 min read)

We’ve all heard various stories about managers doing a poor job with performance reviews. Sure there is plenty of bias coming from the employee and that version may not be close to accurate. But what about the performance reviews that are well done by the manager? What is the impact on the employee when he or she feels the review was accurate, honest, and focused on his/her continued development? Here are five important things that generally occur:

  1. Respect and appreciation ramps up. The employee appreciates that the manager took the time to prepare a review that accurately reflected performance over the review period in question. And the level of respect for the manager increases because the employee perceives that the manager is interested in doing his/her job well and in helping the employee achieve his/her personal and job-related goals.
  2. Morale increases. Even when performance is subpar, well delivered performance reviews make employees feel good about the experience. Employees tend to feel the manager has his or her best interest at heart. To what extent morale increases is dependent on the employee and his or her specific experience.
  3. Engagement improves. The natural progression from a bump in morale is an increase in the level of engagement. Employees who get great feedback on an ongoing basis and as part of their formal reviews feel better about the organization and become more connected to it which is really the essence of engagement.
  4. Communication lines open up. Each time a manager delivers feedback in an effective manner, the lines of communication between the employee and the manager become more open and more positive on an ongoing basis.
  5. Retention improves. Because employees feel they are being treated fairly and because they believe managers have their best interest at heart, they tend to stick around longer…in many cases much longer. Keeping good employees obviously has a direct positive impact on the overall performance of the organization and delivering good performance reviews is a key element in elevating retention and in developing employees into even better employees.

While there are other benefits of conducting effective performance reviews, these represent a very material set of reasons for focusing on and training managers how to prepare and conduct reviews.