Principles and Processes of Performance Review: A Comprehensive Guide

This article provides a comprehensive guide to the principles and processes of performance review, including employee self-assessment, clear strategic goals, and six primary processes of performance review. It also discusses the reasons for failure of performance reviews and provides recommendations for improving the effectiveness of the system.

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Introduction
Performance review also referred as performance evaluation is a process through which the
productivity of an employee is evaluated for career development. Traditionally, businesses used
annual review processes, normally one year but currently, most companies are adopting shorter
appraisal cycles of six months and three months. The main aim of performance appraisal is to
determine whether employees are meeting their performance standards (Brijesh 2013, p 34). To
some extent, the success or failure of any business organization depends on how performance is
managed. Therefore, for any organization that is aiming to improve the performance of its
employees through performance review, here are some of the principles to consider;
As a way of encouraging productive performance, always let each person evaluate themselves
first. Self-assessment makes the employees have a feeling of self-accomplishment. After that,
through the human resource department, the manager can learn which employees have unique
skills and can help improve the productivity of the organization. Always pay attention to things
that motivate employees outside their profession and work. It is of the essence to note that most
people have their own goals and aspirations that can be used positively in their field hence
increasing their productivity.
Have clear strategic goals and missions for the organizations. Having these goals spelt out for
employees means that they know what is required of them and they develop ways of achieving
these goals. With these strategic goals laid down, employees can translate them into actions
(Farndale $ Kelliher 2013, p 87).

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Reviews should be undertaken by all employees within a reasonable period of time to realize the
full benefits. Evaluations should also take into consideration other factors such as employee
potentials, strengths and weaknesses.
Employees should also sign into the company’s missions as a way of viewing their commitment
and contribution to the success of the company. This includes all employees in the administration
and the low levels. Always compare the actual outcome with the desired results within a given
period of time. For effective performance appraisal, ensure that the comparison is made for a
period of one year or less.
It is crucial for managers to develop review processes that clearly define operational procedures
in an organization. Basically there are six primary processes of performance review. They are
discussed as follows.
1. Establishment of performance standards
For any organization setting performance standards is necessary. Performance standards involve
all business operations including sales. Businesses should adopt performance standards that are
flexible according to the business needs. Additionally, businesses should come up with measures
that are favorable and ready to meet the expectations of all employees (Longenecker and Fink
2017, P 37).
2. Employee communication
Apart from establishing performance standards, employee communication is also essential.
Employee communication is used by the management to pass information to the employees
concerning the company’s goals, objectives, and missions. Despite the fact that performance

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standards are written and distributed to the employees using manuals there is a need to have a
process that ensures that there are interactions between the management and the employees.
Holding regular meetings helps to remind the employees what is expected of them. These
meetings can also be used to remind the employees what is required of them so that they can be
rewarded and promoted (Brijesh 2013, p 54).
3. Measure employee performance
Using clearly stated performance standards helps managers to review and track how employees
are performing. Recently, business managers are examining employee performance either
quarterly or half yearly. Some managers are also evaluating employee performance monthly or
weekly for more effective results. For instance, employee sales can be reviewed monthly
whereas their attendance can be reviewed weekly.
4. Comparison of employee metrics
It is of the essence to acknowledge that employees have unique skills and talents. Mostly,
employers set performance standards depending on their abilities. Employees can compare an
employee against the others in the same department to determine whether it is employees who
have a problem or if it is a bigger issue like training that is affecting productivity. If it is the
employee is the one who is not performing, the management can then come up with ways of
motivating such an employee as a way of improving his/her performance. On the other hand, if
training is the issue, then leaders can arrange to have employees in that department to undergo
vigorous training (Aguinis $ Harry, P 113).
5. Employee feedback

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For performance evaluation to be effective, employees should be involved. The management
should sit down with each employee to get their feedback on what was done well and what needs
to be improved. Ensure that employee feedback is written down so that they can be used for
future reference. Additionally, performance review meetings can be used to gather feedback
from employees about their expectations and their personal, professional goals (Marcoulides
2008, p 23).
6. Action plan development
Have goals and plans for the future performance review. Develop a business culture where
employees are given opportunities to grow and develop their skills and abilities within the
organization. Focus on the future by setting bigger goals which aim to promote employee
success and come up with methods of bettering areas which need improvement.
Reasons for Failure of Performance Reviews
The purpose of performance appraisals in the organization is to evaluate the employees’
skills and abilities. It identifies the area of deficiency in skills and competencies in employee and
improves focusing on training and development to improve the specific skills and abilities
required to perform the individual work. The reviews revolve around personal objective settings
and the appraisal done against these goals and objectives (Manjunatha 2012, p. 170). The
employer equips the employee with the resources needed to perform their duties, and the workers
set their objectives and goals which they are evaluated against after a period.
Performance review focuses on management of elements such as constructive feedback,
personal development, and recognition and career opportunities (Kim 2016, p. 152). The
organization manages to build the right skills and talents for the future growth of the

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organizations. However, there is tension when it comes to interests of employees. They view
performance review as a way of scrutinizing their work and putting pressure based on the
managers’ expectations. Below are some of the reasons that lead to failure of the performance
appraisal.
Process Design
The employers use the review as the basis for talent decisions, fostering career development, and
enhancing the relationships and communication, while for the employees, it is more of
evaluation time and may lead to summary dismissal. The review fails as the objective or purpose
of the function is not stated clearly, and both the parties have different agendas. It creates a lot of
tensions among the employees leading to low job satisfaction and performance (Min, Bei, Xu &
Yucai 2015, p. 1105).
Based on the foundation of mistrust
The employees believe that managers have their favorite employees and express biases during
the performance review. When performing work, other employees are carefully monitored to
ensure they do quality work and the right thing as per the requirements of the performance
review (Mulvaney 2017, p. 92). Other employees are not involved and only see the fault in the
review system. The biases lead to mistrust in the system and demotivate employees recording
low work performances. The performance review process does not add value to the employees.
Based on the faulty assumption of human behavior and motivation
The review aims at rating employees to motivate them to improve their performance. Some
employees are confident in them and are not willing to hear different opinions of their managers.
The process is also demotivating to the employees. It makes them lose focus and interest in their

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work. The rating system aimed at motivating employees in most cases lead to employee
demotivation leading to the failure of the process.
Emphasizes more on the rules and procedures of the organization
The review does not provide constant feedback to employees. The review is usually done after
11 months, and no communication on your performances is provided until the time for
performance reviews. It fails to provide constant feedback and building the relationship between
the managers and employees (DeNisi & Murphy 2017, p. 428). The rules and processes
undermine effective communication and investment in development, lack of training to develop
employees, no avenues for communications and no support from the leaders.
Recommendations
The simplifying of the performance review process would improve the effectiveness of
the system. Identifying and communicating the objectives of the review process would improve
its effectiveness. The system can be improved by providing regular review meetings and
providing feedback to employees on the areas they need to improve on. The meetings should also
lead to quality discussions between managers and employees to build the relationship. The
managers are required to provide useful appraisals and be committed to their work. The
managers should also ensure that the performance review is in line with the corporate strategy to
enable them to understand their contributions to the overall goal of the organization.
The review process should also be integrated with the culture of the organization and tailor the
varying needs of different employers. Use technology to engage employees and have a platform
where they can gauge their performances.
 Regular and quality discussions

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The CEO needs to provide constant feedback to the employees. It helps improve the
performance and understand their weaknesses. The organization also uses data collected from the
review to identify the gaps present and organize training to develop the skills and talents for
specific job positions and requirements. The company can also provide coaching in cases of low
performances.
 Capable and committed managers
Having the managers engaged in the review system from the start also leads to
engagement of the employees. They do motivate the employee under them, and it leads to job
satisfaction and positive energy within the company. The positive attitude of employees
determines their work performances. The continuous motivation encourages employees.
 The reward system
The employers should provide a reward to those who do perform exceptionally (Bei et al
2014, p. 1318). The reward system works as a way of motivation for the employees to work hard
and achieve the goals of the company.
 Aligning the objectives of the organization goals
The CEO should ensure that the objectives of the performance review are in line with the
overall goals of the organization. The objective should be clearly stated and all the employees
aware of the purpose of the performance review. All the interests should be put into
considerations.
 Integration of organization culture
Integration of organization culture with the performance review making it a continuous
activity and part of the daily program leading the job understanding and satisfaction. The

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organization can move towards a reward based system where the culture of the organization
states certain rewards of different work accomplishments (Grund & Przemeck 2012, p. 2152).
 The use of technologies
The CEO can use the technology to improve the performance review. The employees can
be engaged through different platforms such as reporting system where the managers are aware
of the activities going on and the update on where improvement is required. It enables employees
to meet the performance expectations and lead to job satisfaction and reduces time wasted.
According to Selvarajan and Cloninger (2012, p. 3070) the employers can use technology such
as Facebook to update other team members by providing information on their performance status
and acquiring help if needed. They can also post there weekly update for all to measure against
the set goals and achievements
 Monitored system
The process needs to be coordinated and monitored for it to function and the operations
run smoothly (Harrington & Lee 2015, p. 260). The organization should evaluate not only the
performance of the workers but also assess the effectiveness of the appraisal system.
Conclusion
In conclusion, the performance review can be managed with clearly stated policies and
procedures to be followed when performing the reviews. The reviews should also be performed
frequently for constant feedback to the employee to improve on the areas of weaknesses. The
managers should also take their roles in the performance review as they influence the employees
and should avoid favoritism and biases when it comes to appraisal.

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List of References
Aguinis, H, Gottfredson, HR and Harry Joo, H 2012. Delivering effective performance feedback:
The strengths-based approach’, Business Horizons, vol. 55, no. 2, pp. 105-111.
Brijesh Goswami, B. 2013. Performance Appraisal-Management by Objective and Assessment
Centre–Modern Approaches to Performance Appraisal. IOSR Journal of Business and
Management, 7(5), pp.24-28.
DeNisi, A, & Murphy, K 2017, 'Performance appraisal and performance management: 100 years
of progress?', Journal Of Applied Psychology, 102, 3, pp. 421-433, Psyc ARTICLES,
EBSCOhost, viewed 17 May 2018.
Farndale, E. and Kelliher, C. 2013. Implementing Performance Appraisal: Exploring the
Employee Experience. Human Resource Management, 52(6), pp.879-897
Grund, C and Przemeck, J (2012). “Subjective Performance Appraisal and Inequality Aversion,”
Applied Economics, 44(17), 2149-2155
Harrington, J, & Lee, J 2015, 'What Drives Perceived Fairness of Performance Appraisal?
Exploring the Effects of Psychological Contract Fulfillment on Employees’ Perceived Fairness
of Performance Appraisal in U.S. Federal Agencies', Public Personnel Management, 44, 2, pp.
214-238, Business Source Premier, EBSCOhost, viewed 17 May 2018.
Kim, J 2016, 'Impact of Performance Appraisal Justice on the Effectiveness of Pay-for-
Performance Systems After Civil Service Reform', Public Personnel Management, 45, 2, pp.
148-170, Business Source Premier, EBSCOhost, viewed 17 May 2018.

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Longenecker and Fink 2017. Lessons for improving your formal performance appraisal process’,
Strategic HR Review, vol. 16, no. 1, pp. 32-38.
Manjunatha, K 2012, 'Performance Appraisal', Vikalpa: The Journal For Decision Makers, 37, 1,
pp. 165-173, Business Source Premier, EBSCOhost, viewed 17 May 2018.
Marcoulides, G. 2008. Performance Appraisal: Issues of Validity. Performance Improvement
Quarterly, 2(2), pp.3-12.
Min, Q, Bei, H, Xu, Z, & Yucai, L 2015, 'Employees' Psychological Ownership And Self-
Efficacy As Mediators Between Performance Appraisal Purpose And Proactive Behavior', Social
Behavior & Personality: An International Journal, 43, 7, pp. 1101-1109, SPORTDiscus with Full
Text, EBSCOhost, viewed 17 May 2018.
Mulvaney, M 2017, 'Performance Appraisals in Public Parks and Recreation: A Study of
Employees' Short and Longer Term Attitudes Toward the Appraisal System', Journal Of Park &
Recreation Administration, 35, 2, pp. 86-107, SPORTDiscus with Full Text, EBSCOhost,
viewed 17 May 2018
Selvarajan, T, & Cloninger, P 2012, 'Can performance appraisals motivate employees to improve
performance? A Mexican study', International Journal Of Human Resource Management, 23, 15,
pp. 3063-3084, Business Source Premier, EBSCOhost, viewed 17 May 2018.
Xu, Z, Bei, H, & Min, Q 2014, 'Job Satisfaction As A Mediator In The Relationship Between
Performance Appraisal And Voice Behavior', Social Behavior & Personality: An International
Journal, 42, 8, pp. 1315-1323, SPORTDiscus with Full Text, EBSCOhost, viewed 17 May 2018.

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