Performance reviews are an important part of performance management for Australian businesses. They provide a formal opportunity to review performance, develop performance agreements with your team members, and identify training needs.

Research has shown that performance reviews have a number of benefits for both employees and employers. Performance reviews can help employees to:

  • Understand what is expected of them
  • Clarify their roles and responsibilities
  • Identify any skills or knowledge gaps
  • Understand their performance relative to others
  • Receive feedback on their performance
  • Gain an understanding of the company’s goals and objectives

Employers can also benefit from performance reviews, through:

  • Improved communication and clarity of roles and responsibilities
  • Increased motivation and commitment from employees
  • More accurate identification of training needs
  • Better allocation of resources

How often should you hold performance reviews?

How often should you have performance reviews? There is no one answer that applies to every business or employee – but here are some tips on what works well in most cases.

Ideally, performance reviews should be held once a year for most employees. There are multiple reasons why performance reviews only work well if they’re done annually:

  • Performance reviews are about looking back and drawing conclusions from the past 12 months’ performance – it’s not something that can change in a week or month. Holding performance reviews more frequently than this would mean you’re holding them too often to be effective, as there won’t have been enough time for performance trends to emerge. Plus, doing any less means you may miss out on crucial information about individual team members.
  • Annual performance reviews also work better because of your business goals and targets which may need long-term planning before being revised between periods where annual performance review takes place, and also performance review cycles are aligned with organisation’s budgeting process.

However, there may be some employees who need more frequent reviews – for example, those in high-risk or high-impact roles. Or if your business is growing rapidly and you have a lot of new hires, performance reviews might need to be done more often than once a year. But in most cases, an annual performance review should be enough.

If you’re not sure when the last performance review was held for your team members, ask them! It’s always good to have a reminder so everyone is on the same page about what’s been discussed previously. And if it’s been a while since their last performance review, they’ll definitely appreciate the chance to update their performance agreement.

How to hold productive performance reviews

Now that you know how often performance reviews should be held, here are some tips on how to make them as productive as possible:

  • Make sure the agenda is clear and everyone understands it before the meeting starts. This will help keep things on track and avoid any confusion or wasted time.
  • Start by thanking employees for their work over the past year. This sets a positive tone for the meeting and helps employees feel appreciated.
  • Discuss specific goals and objectives that were achieved over the past year, as well as any areas where they fell short. This provides concrete examples of performance so both employee and manager can have a clear understanding of what’s been happening.
  • Identify any training or development opportunities that could help the employee improve performance in key areas. This part of the performance review can be difficult, so it’s often a good idea to have the entire team involved – perhaps by having members vote on which training activity would benefit employees most and why.
  • Discuss a timeline for performance reviews going forward, including when they’ll take place next year and any changes to objectives or targets you want them to focus on. It might also be helpful to identify how much notice should be given before performance reviews start being scheduled each year so everyone has plenty of time to prepare material for discussion at meetings.

Employee performance reviews are an important part of performance management, performance development, and performance appraisal. It’s also a chance to celebrate the achievements you’ve had over the year with your team members. So make sure they’re as productive as possible by following these tips!

Need help with your performance reviews?

Are you looking to improve your performance reviews but not sure where to start? Contact ChandlerWoods today for a free consultation on how to hold productive and effective employee performance reviews.

We’ll work with you to create an agenda that meets the specific needs of your business and provide training and development opportunities to help your employees achieve their performance goals.