Performance and Remunerations Reviews

What is a performance review?  A performance review, performance appraisal or performance evaluation is a tool that an employer uses to evaluate an employee’s performance.  It is a formal process in which the manager offers feedback, identifies strengths and weaknesses and goals are set for the future of the employee’s performance.

Prior to conducting a performance review, an employer should consider what they think the employee has done well and what they think the employee could improve on.  Additionally, consider how the employee has performed against their previous goals.  During the meeting, it is important to get feedback from the employee as it relates to their performance and their employment with the company.

Performance reviews are recommended to be conducted every six to 12 months.  They can, however, be conducted more or less frequently.  This is at the employer’s discretion.  Be that as it may, there are more benefits to the employer and employee if performance reviews are conducted at the recommended frequency.  Some of those benefits include increased employee focus, productivity and job satisfaction.  However, it should be noted that these benefits are dependent on whether the review is executed properly.

Whilst performance reviews do have their pros, it is important to be aware of the cons.  When conducting performance reviews, it is important to remember that the meeting should not be too negative feedback heavy.  If a review focuses too much on negative feedback, the consequence could be a further impact on decreased performance and productivity.  It should also be noted that not all employees are going to receive negative feedback as constructive.  Therefore, it is critical that performance reviews are conducted correctly.

A performance review is an opportunity to address poor performance constructively and to work with the employee to come up with an appropriate plan on how to improve.  If there is no improvement in the employee’s performance, there are some further steps that an employer can take to address and manage poor performance.  An example of such things could be to place the employee on a Performance Management Plan or go down the formal warning process.

Here are some general tips for how to conduct and what you need to consider when conducting a performance or remuneration review;

1. Ensure you’re ready and have a plan.

2. Give an opportunity for the employee to provide feedback.

3. Make sure your plan is flexible to accommodate the feedback.

4. Be considerate of the language and tone used when addressing difficult topics.

5. Be firm but fair.

Another important note is remuneration reviews and performance reviews are often falsely used interchangeably.  Whilst a performance review can be an opportunity for a salary review, there is no obligation for an employer to provide the employee with a pay increase, especially if performance has been poor.  Not to mention that it may not be a financially viable option for a company.  Generally, remuneration reviews occur at the time of a performance review due to the correlation between high performance being a predictor for salary increases.  Remuneration is defined by payment or compensation of work or services.  This ultimately means that remuneration reviews are not limited to salary increases alone.

For more information about performance reviews and remuneration options, contact the team at HR Business Assist.