The premise of the annual performance review can be traced back to the 1930's when Elton May, a Harvard Business School professor, found that happiness and productivity were directly related to the social structure of the workplace. To this day, organisations across the world still use the annual performance review process to appraise employees for a job well done. 

However, perhaps it's time to revitalise the performance review process in order to stay ahead in the ever-changing employment landscape. With Gen Z entering the workforce, requiring more regular or consistent feedback and praise, the traditional performance process may not always be as effective in today’s world.

The yearly performance appraisal, when done right, can be a valuable tool to reward and boost employee performance. Flaws in the process however may cause employees to be discouraged, but ultimately, most employees will want to know how they’re doing.

We’ve looked at ways how you as a manager can alter your methods of appraisal that will benefit your company and employees. Here are a few tips:

Make it an ongoing process

The process of reviewing and improving employee performance should be a constant, ongoing process and not a once-a-year compulsory examination. It can be challenging to give an employee an appraisal based on a whole year. Increasing the frequency of performance reviews can help fill in the gaps and make for a more consistent review system.

Managers should especially be discussing their team members’ development as and when issues arise. Keeping the lines of communication open will allow employees to talk about any difficulties they are facing. In turn, managers are able to offer thorough and continuous guidance which should improve work productivity and results.

Stay focused on the big picture

Not all employee performances can be rated on a scale of 1 to 10. While reviewing a particular employee’s work may be as simple as tracking his/her sales records, the performance of other positions with less measurable goals or a wider scope of responsibilities can be more difficult to quantify. Tailoring your questions and review methods to the role at hand will make the performance review process more efficient.

Whether you’re praising a report the employee wrote or critiquing the way she handled an interaction with a client, be sure to explain the effect her performance had on the company as a whole. A recent Robert Half survey of Canadian CFOs found that employees from all age groups wish they had more insight into the effects of their contributions on their company's bottom line. Says David  King, Canadian President of Robert Half Management Resources, “When employees can easily recognize the impact their roles have on the overall success of the company they work for, they are more likely to be motivated and able to make decisions with long-term business goals in mind."

When employees understand that the quality of their work will affect the company’s mission, they’re more likely to feel valued, and as a result, work to improve.

Make it collaborative

In today’s workplace, many employees collaborate with several departments and report to several managers and in those cases there’s no reason why the performance review can’t be a collaborative project. Team members and other managers who have worked with the individual can and should play a role in the performance review process. The 360-degree feedback approach - a process by which an employee is rated on their performance by bosses, co-workers, subordinates and other stakeholders who regularly interact with them - has become quite common in many companies.

Strike a balance between positive and critical

Although it’s best to avoid negativity, it’s important not to sugarcoat issues. Instead of just telling employees that their performance is not meeting expectations, areas for growth should be highlighted, and training, guidance and mentorship should be offered. Employees can then look forward to a chance to develop their career, while feeling supported by the company.

Some of the top-rated methods to improving productivity are employee motivation, staff training and development, and performance evaluation. One way to incorporate these ideas is by reframing the performance appraisal exercise as a career opportunity for employees.

Change the scene

Small gestures can go a long way in making the performance review process less intimidating, especially for (introvert) employees who aren’t comfortable with giving feedback to their superior. One way to lighten the mood would be to do the appraisal out of the office and in a more casual setting – for example, a restaurant or a café. This can help alleviate the stress of the evaluation, and facilitates having a more open conversation with the team member.

Employees can find performance reviews intimidating. After all, their work is under scrutiny. That’s why these meetings should be a conversation, not a monologue. If you establish a collaborative environment, you show your staff that you’re invested in them, and they’ll feel more appreciated and more motivated to perform even better in the coming year.