Designing an Optimal Performance Review Framework for Managers

Preparing for a performance review can cause nervousness among both employees and managers, regardless of how experienced they are. You can ease this anxiety with a dynamic and focused performance review framework that focuses on employee development.

Today, the focus is on agile and continuous performance management, underpinned by a constant stream of feedback. This means managers and employees no longer have to deal with the confusing process of remembering and discussing things that happened months before the annual performance review. More frequent performance reviews streamline the process and ensure relevance and timeliness for everyone involved.

Combine this rhythm with a crystal clear and concise performance review template, and you'll be set up for success right from the start.

The goal? A performance appraisal system that promotes constructive, enriching and engaging conversations between managers and employees.

The Importance of Performance Appraisals

A lot can happen and change in a year, especially with growing teams. For this reason, performance appraisals are an important performance management tool for managers. They're designed to help you and your teams take the time to look back, reflect, pivot, talk about future possibilities, and even create the right framework for delicate conversations.

Perhaps most importantly, they help keep your team together, especially as it grows and evolves. When done correctly, a performance appraisal can be an excellent tool for aligning your employees with their goals.

Of course, performance reviews shouldn’t replace regular communication with your team. However, they provide a unique opportunity to address important topics such as desires, career goals, insecurities and problems and to recognize employees' hard work.

From clarifying expectations and aligning employee and company goals to driving growth through constructive feedback and increasing employee engagement, there are a wealth of benefits that come from proper performance management and well-conducted performance reviews. Here are a few more to illustrate the benefits:

• They help improve communication
• They help to identify strengths and weaknesses
• They make setting goals easier
• They help strengthen relationships between employees and managers.

We know that performance reviews are very important for companies to thrive and are one of the most important responsibilities of a performance management manager. That's why we've put together a framework to help you carry them out smoothly.

Tips for creating the perfect performance review framework

Before you begin conducting performance reviews, it is important to create the right framework to ensure you are adequately prepared and able to get the most out of each conversation. To help you, we have put together a checklist that you should follow.

Before the performance appraisal: preparation

With a little preparation, a productive and constructive conversation can be ensured for both managers and employees. Managers should take notes on their employees' performance goals, strengths and areas for improvement, as well as specific examples of their performance.

You should also be prepared to provide constructive feedback and suggestions for improvement and be open to listening to the employee's perspective and addressing their concerns. Thorough preparation allows managers to have productive and meaningful individual performance review conversations with every employee on their team.

1.Track goals and progress over time

One of the main purposes of a performance appraisal is to evaluate progress and growth over time. Therefore, it is important to set and pursue goals correctly. Goal setting is an important part of driving employee engagement, increasing team performance, and helping your direct reports reach their full potential.

There are a number of employee goal setting frameworks that managers can use, such as: OKRs and SMART goals. A handy tool like IceHrm can make setting and tracking these goals even easier and pave the way to success!

2.Get a comprehensive picture of your employee's performance by collecting 360° feedback

In a decentralized corporate culture, you often have no insight into the emotions and performance of your employees. That's why it's important to get a 360° view of their improvements, teamwork and collaboration. A 360° feedback loop can provide a comprehensive assessment of an employee's performance because it collects feedback from various sources, including colleagues.

Managers can collect feedback from everyone who works closely with the employee through surveys, interviews, or even informal conversations. Employees should also have the opportunity to reflect on their own performance, strengths, opportunities for improvement, and career goals (which helps employees take ownership of their development).

Of course, managers must also conduct their own assessment to evaluate performance based on their observations, interactions and knowledge of their employees' work. This valuable combined feedback provides diverse insights and helps managers better understand each employee's performance and growth potential. It promotes self-awareness, supports collaboration and teamwork, and even promotes a culture of continuous learning and development within the company.

3.Be prepared for a conversation

Prepare for a conversation, not an assessment. A conversation goes both ways. It is an open dialogue that encourages employees to share whether or not they have grown. An evaluation is merely an assessment, a criticism, that ignores the key elements that contributed to the positive or negative results of a project. Defuse feelings of intimidation and nervousness by remaining open and structuring your conversation.

It's no secret that healthy communication has a huge impact on performance and engagement. Some people are better than others at communicating effectively with each other, but there's no shame in admitting that there's still room for improvement!

4.Prepare your performance review agenda

Just as you use a recipe to prepare a dish just right, preparing your performance review agenda can help steer an in-person conversation in the right direction. It helps you capture all the necessary talking points, follow up on action items, and even establish continuity from one conversation to the next. Sending the documents in advance allows your employee to prepare their thoughts on each point, making the process easier for both parties.

During the employee's performance review: Dealing with difficult conversations

It's completely normal for some employees to be nervous during a performance review or feel uncertain about certain topics. It may not be obvious on video calls, but performance reviews can be scary for many people, so it's important to learn how to have difficult conversations.

5.Address the elephant in the room

Even though it's not always pleasant, it's important to be aware of it. Acknowledge that it is normal to feel uncomfortable, especially when discussing negative outcomes, and try to lead the conversation with empathy. This will help employees feel supported as you guide them through the appraisal process. Try to be open to employees' concerns and respond in a solution-oriented manner. Let her know that you want to support, guide and coach her and you will both feel better.

6.Consider the employee's contribution beyond numbers and results

We tend to view an employee's performance with a black and white approach: what worked, what didn't work, and how does that affect salaries and benefits. It's important to realize that an employee's competency can be measured in many ways, and sometimes there's more to it than meets the eye. The only way to truly get the results you want from an employee is to give them constructive feedback that will help them achieve their goals and your company's goals.

When giving performance feedback, try to discuss factors such as effort, expertise, resources, and collaboration, and always keep the conversation specific enough to be easily understood. You can then link it to the 360 degree assessment. This way, you can find concrete examples that highlight the employee's strengths and areas for improvement, giving them the guidance and tools they need to shine!

7.Use the time to give recognition

We've said it before and we'll say it again: never underestimate the power and value of employee recognition! Whether big or small, achievements deserve to be recognized. When you take the time to recognize and reward your employees' hard work, you will increase your employees' motivation, increase their loyalty to the company, and create a more positive company culture.

When giving recognition, make sure your praise is genuine and impactful. And make sure that recognition occurs regularly. Find out what type of recognition resonates with your employees and go for it. Some prefer more personal interactions, while others are more comfortable with public recognition. Either way, it will undoubtedly be well received and appreciated!

8.Discuss compensation and promotions carefully and learn how they work

When it comes to important things like promotions and raises, it's always best to be transparent about why these things are or aren't happening. Obtain all necessary information from HR in advance and be open about how decisions are made. This is important to build trust in both the assessment process and the manager.

Keep in mind that for companies going through major changes, the focus isn't necessarily on financial rewards, but rather on perks designed to improve employee retention. Let employees know that these are not personal and are not based solely on performance.

After the performance review: Be continuous

Once the performance review is complete, it's time to take a look at what's next. Ultimately, it is not a one-time scenario but an ongoing process that promotes employee alignment, growth and success. Here's what's next:

9.Establish clear next steps

After you've had the face-to-face conversation and gained your insights, it's important to establish clear next steps and action points. This gives employees a clear idea of what is expected of them in the future and allows managers to set new goals that they can then evaluate at the next performance review. This gives everyone involved clear direction, which is beneficial for both sides!

Make sure you follow up regularly to encourage employee improvement and performance.

10.Make continuous feedback a regular habit

As mentioned at the beginning of this article, performance management doesn't just depend on the outdated annual performance review. Scheduling frequent one-on-one meetings with your employees will help you discuss goals and outcomes, as well as clarify what progress has been made and what is needed to complete tasks. Provide ongoing feedback and have transparent, ongoing conversations to maintain alignment and achieve long-term success.

11.Remind your employees that you are there for them

As a leader, your employees value your coaching, mentoring, and guidance. Providing them with specific advice on a regular basis will help them develop in their role, quickly improve their work and capitalize on their strengths.

A coaching model is proven to be an excellent way to achieve success and build trust in the team. So it's worth taking the time to learn how to incorporate it into your leadership style.

12.Use a performance management system to drive ongoing performance

We already know that you shouldn't wait until the end of the year to give performance feedback, but that performance discussions should become a regular occurrence. Making this an ongoing conversation allows employees to develop and grow over time.

Tools like IceHrm can really help set up performance management systems through practical features like continuous performance management, performance reviews and structured one-on-one meetings. They also allow you to set and monitor goals, save action items, and take timely follow-up actions.

Improve your performance framework with IceHrm templates

As a manager, you can use IceHrm performance development templates for one-on-one conversations between managers and employees to make performance management more efficient. That's how it's done:

Professional development

Part of your responsibility as a manager is to provide your employees with a clear path for their professional development. Professional development conversations are a crucial part of understanding what the employee wants to achieve and how you both envision them achieving their professional goals. This template is designed to help you have those conversations.

Objective

Goals give everyone direction. That's why it's important to know how to set and track them correctly. When you set individual goals with your team members, you can really see them grow in their roles. This template is a great tool to do just that!

Bad performance

Although we all strive to promote and achieve good performance, not everything is always rosy. Conversations with team members who are struggling can be difficult, and it's not always easy to figure out what's affecting their performance and engagement at work. This guide can help with these types of conversations.

Avoid common performance appraisal mistakes

Nobody is perfect and sometimes mistakes happen. It is important that you recognize and acknowledge these and take steps to ensure that they do not happen again next time. Let's take a look at some important things to keep in mind to ensure the performance review goes smoothly.

Performance reviews are not presentations

Perhaps the most important part of the performance review is the feedback you give your team members. It also depends a lot on how you give this feedback. It should never appear to be the ultimate truth about employees' work. Performance appraisal is about understanding the motivations behind certain behavior and therefore it should always be a two-way discussion.

If an employee stays silent during an appraisal, it doesn't mean they agree with everything you say. That's why it's your job as a manager to continually ask your team members questions during their reviews so that they can also express their opinion on the feedback you give them. Even if not all employees are willing to share their own feedback, there are ways to encourage employee feedback.

Performance reviews aren't just about numbers

A common misconception about performance reviews is that they are only about business metrics and performance ratings. However, an employee's overall performance goes beyond business numbers. You should also consider your employee's attitude, leadership, development and progress. These factors should be included in the conversation about your employee's performance.

Don't be afraid to mix different types of goals. This will help your employees improve holistically in their job and role and develop meaningful purpose in their work. And the icing on the cake? These types of conversations strengthen communication, trust and relationships between managers and their employees.

Performance reviews don't have to be negative

Performance reviews can have a negative connotation because employees often expect negative feedback from their manager. As mentioned at the beginning, this can cause stress among team members. Therefore, your performance reviews should always include recognition when it is due! As a manager, make sure that you include points of positive feedback in performance reviews so that they are well-rounded and well received.

There may be little positive feedback for some team members to give. In these cases, you should provide constructive feedback and ask your employees where they think they can improve. This will help you achieve meaningful goals together.

Develop a performance appraisal framework to promote success

Now that we have examined all facets of developing an effective performance management plan, it is clear once again that ongoing performance management, open communication and regular feedback are the keys to a consistent, effective and ultimately successful performance review.

Embrace IceHrm's templates to streamline performance reviews. With agile management and continuous feedback, foster growth and success in your team.