The Key Strengths of an Annual Performance Review

Employee reviews are an often overlooked yet crucial component to an organization’s human resources department. The benefits of periodic performance reviews are mutual for both the organization and the employees themselves, particularly in their ability to serve as legal documentation, goalposts for employee performance, reference material for promotions and the opportunity for employees to openly discuss their work experiences one-on-one with their supervisors.

Legal Documentation

Employee performance reviews are typically documented using questionnaires that both employees and their managers complete and then discuss with one another. In the event that an employee sues the organization for wrongful termination or other litigation is pursued, these evaluations provide a paper trail that could help or hinder the case. Of particular importance is the employee’s self-evaluation, indications of whether or not the employee has been made aware of areas that require improvement and whether the employee received any formal complaints or written warnings.

Goal Setting

Whether employees are performing satisfactorily or in need of serious improvement, setting goals during a performance review is of mutual benefit, allowing an employee the opportunity of career development, which in turn improves the organization’s bottom line. For employees who are excelling in most of their endeavors, performance reviews allow them the opportunity to discuss any untapped talents they could put to use that would make their jobs more challenging while also benefiting the organization.

Promotions and Bonuses

When it comes time to select a candidate for a promotion within the organization, employee performance reviews serve as valuable reference material that helps separate high performers from the rest of their colleagues. Using performance reviews as a benchmark for determining who receives promotions also mitigates the chances of perceived or actual favoritism that might skew the manager’s decision.

Communication Opportunities

For employees with particularly busy managers, a review may be the only opportunity they have to sit down with them and have a reflective conversation concerning their jobs. The communication opportunities provided by a review can also be especially valuable for managers with reserved employees who don’t readily and voluntarily express their feelings and opinions about their own jobs.