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Evaluating the effectiveness of performance management

By Yosie Saint-Cyr, LL.B., Managing Editor and Nancy Currie, Assistant Editor at HRinfodesk.com---Canadian Payroll and Employment Law News, June 2007

In our recent poll on HRinfodesk.com, we asked participants if their company conducts performance reviews and how often the reviews are conducted. The overwhelming response from participants was that performance reviews are conducted on an annual basis (71.09%). This could be, in part, because of an expectation by management and employees of performance reviewing based on a system of annual reviews traditionally created by factory bosses to keep assembly-line workers productive during a time when work was routine and predictable. Annual reviews were usually tied to annual pay increases as a reward for good performance. However, in today's changing workforce, there are fewer jobs that consist of routine tasks without room for personal development and growth. Employees need more feedback related to their performance on special projects and tasks that don't take an entire year to complete. This may be why some managers are choosing to conduct their staff performance reviews on a bi-annual basis.

Our poll showed that 11.72% of respondents conduct performance reviews every six months. The bi-annual review breaks the review period into two shorter parts and allows the employee and his or her manager to focus on performance issues and goal management for shorter terms. Too often, what occurs with annual reviews is an employee will work extra hard in the two months preceding their annual performance review and not perform to their fullest when their review is still months away because they believe that what they do that far in advance of their next annual review will not likely be remembered by their manager. This is where bi-annual performance reviews offer better feedback for employees and managers.

The quarterly review, based on participants' responses, comes in at 1.56%. Compared to the traditional, annual review and the bi-annual review, the quarterly review may not be something that employers are willing to devote time to. Performance reviews are time consuming to prepare for, conduct and follow-up on if further review is needed. This could be the reason why most organizations prefer the annual or bi-annual review over the quarterly review.

However, randomly conducting performance reviews-7.03% in our poll-seems to be more popular than the quarterly review category. This could be due, in part, to a response by management to performance issues that require immediate handling or when an employee performs or completes a task particularly well and management wishes to acknowledge that employee for a job well-done. If either of these scenarios is the case, and performance reviews are performed in relation to a particular behaviour, there should be no surprises at the employee's annual performance review, if one is still conducted as sometimes is the case.

According to the poll results, 8.59% of respondent organizations do not conduct performance reviews. There could be several reasons for this. Some organizations may maintain an open dialogue or a system of “performance conversations” with their staff where employees are receiving regular feedback on their performance, whether the feedback is positive or negative, therefore the need for a formal performance review at any point during the year may not be deemed necessary by management. There is also a great deal of stress and pressure related to performance reviews. The time it takes to prepare and conduct reviews that ultimately may not provide appropriate feedback to the employee for his or her performance is stressful and can cause managers a great deal of angst.

A performance review, whether it is done annually, bi-annually, quarterly, or randomly is an important tool that employers should use to provide feedback to their employees. However, what seems to be up in the air is the method of the review and how often the review should be conducted. Each organization must decide this process for itself and determine what best suits their management style and their employees' needs for ongoing, constructive feedback. Regardless of how and when your organization chooses to conduct reviews, it has been proven that constructive feedback improves overall employee performance and you should take advantage of this valuable tool.

Below is a breakdown of the results of the recent HRinfodesk Poll and further information about performance management systems:

What is a performance management tool?

Performance management is an ongoing process where management staff (managers, supervisors, team leaders) and employees work together to plan, monitor, and review an employee's work objectives, goals or issues that may arise during the employment relationship and overall contribution to the organization.

Any type of performance review should include a development process to assist employees in meeting job expectations, to be more productive and grow with the company. According to expert human resources professionals, the performance management process is ultimately a tool designed to assist the manager/supervisor and employee in:

  • communicating regularly, candidly and clearly about performance goals, expectations, actual performance and issues;
  • identifying actions to enhance the employee's performance, results and growth;
  • identifying development needs for the current job and future positions within the company.

What is the purpose of performance management?

The purpose of a performance management system is to help managers/supervisors improve individual and organizational performance in keeping with the general management principles and the organization's planning guidelines. It also includes:

  • Ensuring that the employee's work supports the strategic direction of the organization;
  • Motivating employees to do their best and improve performance;
  • Establishing clear guidelines about what the employee is expected to accomplish;
  • Providing ongoing, constructive feedback on performance;
  • Identifying areas of poor performance and establishing plans for improving performance;
  • Identifying the skills, abilities and strengths of each employee so that work assignments build on and reflect an employee's strengths;
  • Identifying individual employees for more challenging work;
  • Assisting and supporting staff in achieving their work and career goals by identifying training needs and development opportunities;
  • Support decision-making about promotions, terminations, compensation and rewards; and
  • Provide a paper trail for legal challenges such as dismissal, discrimination or vicarious liability.

Establishing effective performance reviews

1. Performance management starts with the employer establishing a plan

To ensure that your performance management process is effective, the process should be based on a well written job description and job-related activities. The process should also be a collaborative effort between the manager/supervisor and employee on such things as setting performance objectives.

The duties of a specific job are reviewed to ensure alignment with organizational objectives is recorded in an updated job description. Establish objectives and behaviours for which you can develop observable measures.

The manager communicates to the employee performance expectations in writing and through discussion. The plan is to identify for the employee what is to be accomplished, how and in what time period (if applicable).

2. Monitoring and feedback

The plan should be followed by ongoing monitoring and feedback on the employee's progress towards the objectives set in the plan during the performance period. At this stage, managers/supervisors should provide ongoing coaching and guidance to employees and remove barriers to performance and take corrective action using a development plan, if required.

3. Performance review

At the end of the performance period, which is traditionally a year, the manager/supervisor and the employee should meet to review and discuss the accomplishments and challenges of the past year. The discussion is documented using a performance management form or appraisal form. The manager/supervisor and the employee should also take the opportunity to compare the actual results obtained by the employee over the established time period to the expected results and performance standards for each position responsibility. Variances should be identified.

When documenting the performance process, the manager/supervisor records the findings objectively and concisely. The employee should be allowed to read and discuss the results with the manager/supervisor. Following the discussion, the employee should sign the review document with comments if desired.

4. Planning for the next performance period

Performance standards and objectives should be set (revised, if necessary) for the following performance period. The manager/supervisor and the employee should prepare a development plan to address gaps between actual and expected performance and to capitalize on the employee's strengths. When problems are identified with performance or behaviour, the manager/supervisor should provide support in the form of training, development or coaching, and adequate time for the performance or behaviour to improve.

A development plan should include the nature and degree of change expected, development activities, time frames, and accountability for each aspect of the plan.

The manager/supervisor should also update job descriptions annually (determine if the current job description is still accurate and reflects the reality of the employee's job, and discuss and make changes as required) and communicate them to employees with new or revised performance and development plans.

5. Establish an appeal's process

Even with a well designed and implemented performance management process, there may be situations when an employee has a serious difference of opinion with the manager/supervisor about his or her performance assessment. A procedure for the employee to discuss and resolve disagreement with the process should be established.

6. Review performance management process

Periodically review the performance management process to ensure that it is adequate, fits the needs of your organization, and is being applied consistently and effectively.


For the performance management process to work, managers/supervisors must be trained on the established process and how to work with employees to set goals and standards; how to provide constructive feedback; how to conduct a performance management review; how to make bias free assessments, and the grounds for discrimination under Human Rights Legislation.

In addition, the performance management process has to motivate employees to do their best and it must be fairly and consistently applied to all employees.