Why Employee Performance Evaluations Are Important | Part 1

Only 54% of companies have implemented a formal employee performance evaluation process – are you one of them? A study by workhuman (2019) has revealed that the number of companies conducting regular formal performance reviews are continuously dropping and employee’s say they do not improve performance. However, to build a strong manager-employee relationship it is important to have regular check-ins to build trust, respect & engagement.

Learn more about why employee performance evaluations are necessary for the success of your business and retention of employees.

👉Want to keep the employee experience of feedback as calm as possible? Check out this article:Tips to Combat Unnecessary Stress Related to Performance Appraisals

Performance Evaluation & its challenges

When it comes to annual and bi-annual employee evaluations, the advantages vastly outweigh the disadvantages.

When poorly managed, employee performance evaluations can create stress in the workplace. They can even instill a sense of dread in employees. As a result, employees do feel like performance reviews are not indicative of all the work they do and are not an driving performance in the way they should.

When properly managed, employee performance evaluations are a crucial part of maintaining a healthy workspace. They can cultivate a culture of openness, trust and respect.

Workplaces will often succeed or fail based on how efficient and open their channels of communication are. Frequent communication after the big formal appraisal is here the key to long-term effectiveness. Additionally, transparency is crucial in maintaining the well-being of your company.

Transparency is Key

Performance reviews aren’t an obligation to put someone’s work under a microscope; they’re an invitation for conversation between employees and management. Allow your employees to speak candidly ensuring if they do their jobs are not in jeopardy. Transparency is vital, and this means that sometimes management will need to listen to and acknowledge the concerns of their employees, even when those concerns might be uncomfortable to hear.

Culture of Feedback

Employees want feedback to know where they stand. Employees don’t want to be left in the dark about their status with the company. Quite often, employees who experience stress over their performance are your top performers. You should create a formalised process for letting them know they’re doing well to keep them motivated.

Employee performance evaluations are a great way to initiate these conversations. Let your employees know exactly where they stand, for better or for worse. If an employee is doing well, they should know about it. If an employee is doing poorly, they should be given a goal-oriented path toward success.

Increase Employee Engagement & Performance

Employee engagement improves when the employee performance evaluation is effective. Performance evaluations create a shift in how an employee thinks about their work. Some employees are strong independent workers and are very rarely recognised for their contributions. Others are great employees but require a little more structure.  Evaluations can allow these types of employees to rethink their performance from the perspective of how they are contributing to the greater goals of the company.

When employees understand the importance of the work they are doing, then they automatically feel more engaged in the company as a whole. Once a person goes to work with the understanding that their tasks are an important piece of a larger mechanism, it makes their responsibilities feel more rewarding. When that same person goes to work with the idea that they’re just doing a repetitive set of uninspired tasks, their performance begins to suffer.

📢Tip: Did you know that employees who have weekly check ins with their manager are 5 times less likely to be disengaged? Engage your employees more by scheduling regular check-ins & increase performance.

Improved Communication between Levels

Performance evaluations help to allow communication between owners, management & employees. When communication is off, employees may start speculating and end up in a cycle of negative thoughts that could have been avoided, if communicated correctly. Prioritising communication allows employees the ability to see the greater picture and help them find their place inside of the organisation. They are much more likely to increase their performance and deliver satisfactory results, if they feel heard and involved.

Implementing an employee performance evaluation is a great tool to increase performance of your employees and the company- but they are not the only one. Regular check-ins are as important as formal feedback to keep engagement high and employee turnover low. In Part 2 of this article we explore some further benefits of appraisals, so be sure to not miss it.

Do you want to automise this process and make it easier for you and your employees? Then check out our performance review module & get in contact with one of our team members. We are here to support you on your journey to great employee experience and a positive work ethic.