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Performance Reviews ... Is it an important tool for organizations?

Updated on September 11, 2012
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Performance Reviews

A performance review is an important and effective tool that should be utilized by businesses on a consistent basis. This tool will allow an employee to know how their employer views his/her job performance along with determining if there needs to be any adjustments or improvements due to a change in either workload or the workplace.

Types of Performance Evaluations

Each organization may utilize their own type of performance evaluation since there is more than one to choose from to complete this process. Two of the many types of performance evaluations that can be utilized are the Individual Performance Appraisal and Multi-Person Appraisal.

  1. Individual Performance Appraisal - This appraisal method is straight-forward and precise. It simply measures an employee's strengths and weaknesses. There are specific objectives tailored to measures that specific individual's performance level.
  2. Multi-Person Appraisal - This appraisal method is used in a more comparative nature (employee vs. employee). It is basically used as ranking system by the employer when evaluating their employees' performance. For example, the military utilizes this type of annual performance appraisal amongst the various ranks within the enlisted and officer communities.

Advantages of Performance Reviews

Three advantages for businesses in using this tool are as follows:

  • It allows an employee to view an actual measurement scale of his/her job performance. For example, timeliness and/or accuracy of finishing assigned tasks.
  • It allows an employee to gain clarification on present and future expectations from their employer. For example, if downsizing occurs then workloads may have to be adjusted accordingly.
  • It allows an employee the opportunity to share his/her thoughts about the information being presented; in other words, there is a two-way conversation between employee and employer.

Challenges of Performance Reviews

Although there are many advantages to using performance reviews, there are a few challenges as well especially if this tool is not utilized in the correct manner. Three of those challenges include the following:

  • There can be a sense of discouragement established between employee via employer especially if this process is not a very favorable one. For example, the employee is always late finishing assigned tasks.
  • It can be a time consuming process depending on the number of employees as well as the time spent with each employee. There can be lengthy discussions established by the employee especially when he/she is in disagreement with particular performance marks made by the employer.
  • Biases can play a part in the rating because of it being conducted by a human being. For example, an employer may not be particularly fond of an individual and decide to mark his/her performance evaluation according to how he/she may feel about that individual versus being more objective.

In conclusion, it is very important for an employer to be proactive in ensuring that their employees are given at least an annual appraisal at the minimum. Most businesses today will conduct a semi-annual and annual evaluation which I think works well in allowing an employee to see how much process he/she has made or may need to make moving forward in the organization.

If this tool is used wisely, it can empower employees to excel in an organization and be rewarded accordingly or it can have the opposite effect and cause tremendous tension within a particular department or in the organization. Either way, it is an important tool and should be utilized on a consistent basis as well as in a fair, unbiased manner by employers.

Do you think performance reviews are important to both employee/employer growth?

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    • Melinda Longoria profile image

      Melinda Longoria, MSM 

      4 years ago from Garland, Texas

      Excellent article on the importance of performance reviews! Voted up & sharing. ;-)

    • UMHiram profile imageAUTHOR

      Unique Hiram 

      5 years ago from Midwest

      Neophonic, thanks for stopping by and commenting. I am glad that you found the information to be useful.

    • neophonic profile image

      Jakub Dubec 

      5 years ago from Europe

      They are interesting for both, momentally embarrased about it and i found this article veery useful to mind about a topic ;)

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