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Five Best Practices for Performance Reviews

Employees are the most important part of your business. The quality of your employees makes a world of difference in every aspect of the company’s operations. Therefore, it’s especially important to give your employees the guidance that they need to grow. Paired with regular assessments of the overall quality of their work, your employees will be equipped to adapt and improve.

Without the right direction, your employees won’t be able to reach their potential. A directionless workforce is much less likely to make your business stand out from its competitors. When the competition has more effective employees, clients and customers may purchase goods and services from them instead. This is why performance reviews are so vital, but there are a few major practices to consider when trying to optimize your review process.

Set Clear Expectations

Employees need to understand what the company expects from them. Therefore, your business needs to have clearly stated rules and policies so that everyone knows how to conduct themselves. Things such as your company’s dress code, social media policies, standard operating procedures, and other specific information should be clearly written out for your employees. Otherwise, every worker may have a different understanding of what is or isn’t acceptable behavior. Unclear or unstated policies can cause a lot of discord and general inefficiency in your business, and it could give your company a bad reputation.

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Managers, HR representatives, IT specialists, and other important professionals should regularly come together to examine and update your company’s policies. All new employees should go through these policies extensively during their training period. With clear expectations and a workforce that understands them, there will be few surprises at the next performance review.

Cite Relevant Data

Goals and Benchmarks

If workers don’t have any objectives to accomplish, then how can managers fairly assess their performance? For your business’s assessment metrics to be useful, they need to be measurable. Otherwise, your managers may review your employees inconsistently and unfairly. You could tell a department to simply make more sales, but that’s not a very useful goal. Instead, you should provide a minimum benchmark for each product or service that you expect them to sell.

Company meeting where the presenter is pointing to goals on a whiteboard.

With measurable goals, there will be no ambiguity about an employee’s performance. However, don’t just let the numbers speak for themselves. There’s always a chance that your managers are setting unattainable goals. If an alarming number of employees fail to miss a benchmark, then that may point to managerial inefficiencies, poor hiring practices, or bad training.

Therefore, instead of just grilling them on their unsatisfactory numbers, you should seek to establish a dialogue with your employees during the review process. Their poor performance could be caused by suboptimal software, questionable operating procedures, or problematic clients. If you don’t allow employees to make a case for their insufficient performance, then your company may miss out on useful information about its processes.


As stated earlier, your company’s policies should be clear, and that includes its attendance policies. Your business relies on its employees, so they need to arrive at work on time to operate effectively. If an employee is constantly tardy or absent, then that could seriously affect other employees’ projects and tasks. Poor attendance can be a symptom of a bigger problem, so your managers should try to work with employees to find the right solution.

Attending a business meeting.


How well does an employee get along with the people in their department? Do they conduct themselves in a way that fits your company’s culture? Managers must take these things into account when assessing an employee’s performance. While an employee may have awesome sales numbers, personality issues or negative behavior could severely affect other employees’ happiness and performance.

Without data, there’s not much that your business can do about petty conflicts or questionable behavior. Thus, your managers should record conflicts and bad interactions in your employees’ personnel files so that they have relevant data to inform their decisions. Zoho People makes it incredibly easy to attach notes to employee’s files to preserve such information for the next performance review.

Be Tactful

Your employees aren’t emotionless machines. They’re people with rich lives and unique feelings. Thus, your company’s managers shouldn’t offend or belittle them. A hostile review process won’t only hurt your employees’ feelings and reduce their productivity, but it can also damage your business’s reputation. If your business is known as a place with cold-hearted managers who treat employees like equipment, then the most talented individuals may not apply.

Tactfully giving a performance review.

To enhance the morale and productivity of your workforce, your managers should work hard to soften the blow of their criticisms. When an employee falls short of a certain benchmark, your managers must make it clear that they want to help the employee succeed. Furthermore, every criticism should be accompanied by a compliment. Even if an employee is underperforming in one aspect, they are likely still doing other things very well. When managers focus on an employee’s strengths and potential to progress, the employee will have the morale and guidance to improve their performance.

Don’t Wait Forever

The semi-annual review process seems to be an unspoken norm across many industries, but is that a good thing? A lot can change in six months, and with the pace at which modern commerce develops, two reviews per year may not be sufficient. Depending on your business’s typical sales timelines and general practices, you may want to conduct reviews more often.

Not every review has to be a huge aggregation of all of an employee’s performance metrics. While such reviews should still be conducted every six months, less formal reviews should take place on a monthly or quarterly basis. With more regular reviews, employees and managers will have more chances to engage in dialogue to better understand the company’s state of affairs. This can save your business a lot of time, and your managers won’t have to wait six months to identify and react to potential problems.

Examine the Effects of Employee Reviews

Comprehensive data will make it much easier for your managers and executives to make informed decisions and develop smart strategies. Therefore, your company should use Zoho People to log data and track relevant information about each employee’s performance. With this information, you can determine the effectiveness of the company’s review policies. If certain problems persist after each review, then that may point to systemic issues.

For example, you may notice that only a few employees consistently fail to improve after each employee review. The right HR software solution will allow you to quickly find commonalities between these employees. If they happen to share a manager, then that information may indicate that the manager is not equipping these employees for future success. If the underperforming employees happen to share the same job title while working at different locations, then the issue may be a result of inefficient tools or procedures.

Performance Reviews Final Thoughts

No manager wants to let an employee go. It’s an unpleasant process, and it can damage your business. The average business spends over $4,000 to find, hire, and train new employees. That’s a large sum of money, so your business should do whatever it takes to get the most out of their investment.

An effective review process will help employees and managers come together to find solutions for your company’s challenges. By using Zoho People to accumulate and analyze data, your managers will be able to provide the right guidance to ensure that your employees can succeed. As long as your managers and executives remember to set clear goals, rely on data, and remain sensitive to each employee’s needs, each performance review will set your company up for success.

Billy Bates

Senior Web Developer

Billy is a Wordpress Developer with an eye for design. His knowledge will help our company website and client sites meet their goals. Billy and his young family have just moved to Ashland Oregon, and are looking forward to exploring the area’s amazing beer, wine, and food. He also has a passion for synthesizers and drum machines.

Lucas Sant'Anna


With a background in Operations Research and Data Analysis, Lucas is a Brazilian programmer that likes to get stuff done quickly and reliably. In previous jobs, he implemented industrial job scheduling, fleet management and detailed long-haul route optimization – among other data-driven processes – to reach objectives of increased profit and reduced wasted resources. His goal is to make Zoho fully automated and with more meaningful data for spot-on decisions.