Performance reviews can be informal or formal. Some managers place less emphasis on the informal review type versus the formal review type, but informal reviews have their place in the organization.
Imagine a situation where there are employees, which feel insecure in their role. Or perhaps, there are employees in the organization that do not know where they stand in the eyes of their managers. This can happen with new employees. In such instances, the employees could benefit from some basic informal feedback from their managers. A simple statement such as “I think you’re a quick and effective worker.” could go a long way towards making any employee feel comfortable. This small bit of communication could be all that is needed to enhance an employee’s productivity and effectiveness.
Most organizations have requirements for managers to conduct regular and periodic formal performance reviews. This is important for various reasons. Employees that perform at a high standard need to be rewarded with higher performance reviews, and consequently higher compensation than the employees, which perform at a lower standard. Employees that perform well will only be further motivated to maintain or improve upon their performance. Employees that do not show adequate levels of performance will feel pressure to work harder to improve their performance. In addition, without the formal performance reviews, there would be no way to differentiate between the employees. Everyone would be the same. In the event that the organization needs to downsize and let an employee go, there would be no way to select the worker that should be let go. If an organization were to let an employee go, under the condition that all employees are all the same, the organization could be accused of favouritism. The organization could be held liable.
When conducting a formal performance review, there are two main things to watch out for. First, it is important to maintain the accuracy of the performance review. When it comes to reviews, both the employees and the reviewers can be subject to evaluation biases. The review must be an accurate portrayal of performance. Second, the review process is confrontational. The managers are on the offensive as they make judgments about the workers. The workers are on the defensive. This kind of oppositional meeting does not always serve to motivate employees towards better performance. Instead, what if a reviewer were to discuss accomplishments and achievements of the worker during the review session. Going over these matters would only serve to motivate the employees to better performance. In finishing a performance review, a discussion needs to happen not simply about the problems of the past, but also what actions will need to be taken to improve the performance from that point on.
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