122

10
Performance Reviews

Performance management is a continuous process that involves informal reviews as required.

As Plachy and Plachy (1988) explained: ‘Performance review occurs whenever a manager and
an employee confirm, adjust, or correct their understanding of work performance during
routine work contacts.’ It is the best way to manage performance. But it is still useful to have
a formal review once or twice yearly. It is a focal point and a ‘stocktaking’ opportunity for the
consideration of key performance and development issues and provides the basis for perform-
ance and development planning and agreements. This chapter covers:
• the process of reviewing performance;
• a description of the formal performance review process;
• problems with performance reviews;
• preparing for review meetings;
• self-assessment;
• conducting a performance review meeting.

The process of reviewing performance

Informal reviews are the process by which performance is managed throughout the year. Per-
formance is reviewed as it occurs by the individual as well as the manager, comparing what
happened with what should have happened. Informal feedback can take place whenever a
manager comments on a piece of work or an action taken by an individual at work: ‘Well
done’; ‘That’s exactly what I wanted’; ‘Could we discuss another way of doing this next time?’;
‘Something seems to be going wrong. Let’s discuss why and what can be done about it.’
Whenever appropriate, managers meet individual members of their teams to provide feed-
back, initiate coaching or other learning activities, and agree on revised goals or any corrective
action required. The outcome of such meetings may not be formally documented unless action
 Performance Reviews 123

to deal with poor performance through a capability procedure is invoked. However, managers
may take notes for reference when preparing to conduct a formal review meeting.
Formal reviews are meetings in which performance is analysed more systematically. They
include an overview and analysis of performance since the last review, comparing results with
agreed expectations and plans. Reference may be made to events that illustrate performance as
discussed during the year (they shouldn’t be brought up at a formal meeting for the first time).
The level of performance achieved is assessed so that individuals know where they stand, and
in many cases it is rated. Formal reviews are usually documented on paper or recorded on a
computer. They can provide the basis for decisions on performance pay, promotion, inclusion
in talent management development programmes, training, performance and development
plans, and action to deal with poor performance (although the latter is best carried out at the
time rather than waiting for an annual review).
All this happens on a one-to-one basis – a get-together of the manager and the individual. This
should be a conversation involving dialogue and joint analysis of performance. It should be
constructive and forward-looking, not a top-down judgemental affair. Ron Collard, as a Vice-
President of the Institute of Personnel and Development, told the true story of an individual
who, stopping his car next to that of his boss at a set of traffic lights one day, was surprised to
see the boss gesticulating at him to wind down the car window. He duly did so and was even
more amazed when the boss said: ‘It’s appraisal time – I’ll put you down for a “3”… OK!’ As
Ron commented, it’s no wonder that performance management gets such a bad name.

The performance review process (Strebler, Bevan and Robertson, 2001)

The performance review process should:
• have clear aims and measurable success criteria;
• be designed and implemented with appropriate employee involvement;
• have its effective use core to all managers’ performance goals;
• allow employees a clear ‘line of sight’ between their performance goals and
those of the organization;
• focus on clarity and performance improvement;
• be closely allied to a clear and adequately resourced training and development
infrastructure;
• make crystal clear the purpose of any direct link to reward and build in proper
equity and transparency standards;
• be regularly and openly reviewed against its success criteria.
124 Performance Management Processes

The formal performance review meeting

The formal performance review meeting is the means through which the five primary per-
formance management elements of agreement, measurement, feedback, reinforcement and
dialogue can be put to good use.
The review should be rooted in the reality of the employee’s performance. It is concrete, not
abstract, and it allows managers and individuals to take a positive look together at how per-
formance can be developed in the future and how any problems in achieving goals and meeting
performance standards can be resolved. Individuals should be encouraged to assess their own
performance and become active agents for change in developing that performance. Managers
should be encouraged to adopt their proper enabling role: coaching and providing support
and guidance.
There should be no surprises in a formal review if performance issues have been dealt with as
they should have been – as they arise during the year. Traditional appraisals are often no more
than an analysis of where those involved are now, and where they have come from. This static
and historical approach is not what performance management is about. The true role of per-
formance management is to look forward to what needs to be done by people to achieve the
purpose of the job, to meet new challenges, to make even better use of their knowledge, skills
and abilities, to develop their capabilities by establishing a self-managed learning agenda, and
to reach agreement on any areas where performance needs to be developed and how that
development should take place. This process also helps managers to improve their ability to
lead, guide and develop the individuals and teams for whom they are responsible.
The most common practice is to have one annual review (65 per cent of respondents to the
2004 CIPD survey). Twice-yearly reviews were held by 27 per cent of the respondents. These
reviews lead directly to the conclusion of a performance agreement (at the same meeting or
later). It can be argued that formal reviews are unnecessary and that it is better to conduct
informal reviews as part of normal good management practice to be carried out as and when
required. Such informal reviews are valuable as part of the continuing process of performance
management (managing performance throughout the year). But there is much to be said for
an annual or half-yearly review that sums up the conclusions reached at earlier reviews and
provides a firm foundation for a new performance agreement and a framework for reviewing
performance informally, whenever appropriate.

Goal
In practice, when managers start to coach, most of the role involves asking questions that will
help individuals work out for themselves what their goal is. To aid this process, a list of ques-
tions is usually provided, with the goal usually being one of the objectives or the performance
criteria standard. Like the main objectives, all goals need to be SMART.
 Performance Reviews 125

Other examples of how performance reviews are carried out in DHL, Hitachi UK and the
Royal College of Nursing are given in Appendix B.

Problems with formal performance reviews

In traditional merit rating or performance appraisal schemes the annual appraisal meeting was
the key event – in fact, in most cases the only event – in the system. Line managers were often
highly sceptical about a process that they felt was imposed on them by the personnel department.
A typical reaction was: ‘Not another new appraisal scheme! The last three didn’t work.’ Manag-
ers felt that the schemes had nothing to do with their own needs and existed simply to maintain
the personnel database. Too often the personnel department contributed to this belief by adopt-
ing a ‘policing’ approach to the system, concerning themselves more with collecting completed
forms and checking that each box has been ticked properly than with helping managers to use
the process to improve individual and organizational performance.
When McGregor (1957) took an ‘uneasy look’ at performance appraisal many years ago, he
commented that managers shied away from it because they did not like sitting in judgement
on their subordinates – ‘playing at being God’. In his seminal book on the appraisal interview
Maier (1958) suggested that for managers to attempt to give negative feedback and help sub-
ordinates develop their performance in the same interview could present difficulties unless
very carefully handled.
Three main sources of difficulty in conducting performance reviews were identified in one of
the earliest articles on performance management by Beer and Ruh (1976):
• the quality of the relationship between the manager and the individual – unless there is
mutual trust and understanding the perception of both parties may be that the per-
formance review is a daunting experience in which hostility and resistance are likely to
emerge;
• the manner and the skill with which the interview is conducted;
• the review process itself – its purpose, methodology and documentation.
126 Performance Management Processes

Performance review issues

• Why have them at all?
• If they are necessary, what are the objectives of reviewing performance?
• What are the organizational issues?
• On whom should performance reviews focus?
• On what should they focus?
• What criteria should be used to review performance?
• What impact does management style make on performance reviews?
• What skills are required to conduct reviews and how can they be developed?
• How can both negative and positive elements be handled?
• How can reviews be used to promote good communications?
• How should the outputs of review meetings be handled?
• To what extent is past performance a guide to future potential?
• When should reviews take place?
• What are the main problems in conducting reviews and how can they be
overcome?
• How can their effectiveness be evaluated?

Why have performance reviews?

The answer to this question is, of course, that managers have no choice. Reviewing perform-
ance is an inherent part of their role. The question should be rephrased as: ‘Are formal reviews
necessary as a performance management activity to supplement the continuous informal
process of monitoring performance?’
The argument for a formal review is that it provides a focal point for the consideration of key
performance, motivational and development issues. It is a means for considering the future in
the light of an understanding of the past. It answers the two fundamental questions of ‘Where
have we got to?’ and ‘Where are we going?’ It gives managers with their teams and the indi-
vidual members of their staff the opportunity to pause after the hurly-burly of everyday life
and reflect on the key issues of personal development and performance improvement. It is a
means of ensuring that two-way communication on issues concerning work can take place,
and it provides the basis for future work and development plans. Formal reviews do not sup-
plement informal or interim progress reviews but they can complement and enhance them
and therefore have an important part to play in performance management. In a sense, they are
stock-taking exercises that take note of what has been happening in order to plan what is going
 Performance Reviews 127

to happen. A formal review is also necessary if performance has to be rated for performance-
related pay purposes.

Objectives of performance reviews

The objectives of reviewing performance are as follows:
• Planning – to provide the basis for re-formulating the performance agreement and the
performance and development plans incorporated in it.
• Motivation – to provide positive feedback, recognition, praise and opportunities for
growth; to clarify expectations; to empower people by encouraging them to take control
over their own performance, learning and development.
• Learning and development – to provide a basis for self-managed learning and the
development through coaching and other learning activities of the abilities relevant
both to the current role and any future role the employee may have the potential to
carry out. Note that learning and development includes focusing on the current role,
enabling people to enlarge and enrich the range of their responsibilities and the skills
they require and be rewarded accordingly. This aspect of role development is even
more important in flatter organizations where career ladders have shortened and where
lateral progression is likely to be the best route forward.
• Communication – to serve as a two-way channel for communication about roles,
expectations (objectives and competency requirements), relationships, work problems
and aspirations.
Reviews can also provide the basis for assessing performance, especially if ratings are required
for performance or contribution-related pay although there are arguments against over-mech-
anistic rating procedures (assessment and rating are discussed in Chapter 11).

Organizational issues
To have any chance of success the objectives and methodology of performance reviews should
either be in harmony with the organization’s culture or be introduced deliberately as a lever
for change, moving from a culture of management by command to one of management by
consent. Performance management and review processes can help to achieve cultural change,
but only if the change is managed vigorously from the top and every effort is made to bring
managers and staff generally on board through involvement in developing the process, through
communication and through training.
If, however, an autocratic style of management is practised at the top and pervades the organ-
ization, a more circumspect approach might be necessary. Arguments have to be prepared to
handle chief executives who say, firmly: ‘I set the direction, I decide on the corporate objec-
128 Performance Management Processes

tives, only I am accountable for results to the shareholders, my word therefore goes. I am not
in the business of managing by consent.’ Remarks along these lines are not untypical, espe-
cially when the finance institutions are demanding a significant increase in the price/earnings
ratio, or a hostile takeover bid is imminent. The best thing you can do is to argue as persua-
sively as possible that the achievement of corporate objectives is far more likely if people are
fully committed to them, and that such commitment is more probable if they are given the
opportunity of participating in setting their own objectives and even of influencing higher-
level objectives if they can contribute to their formulation.
But if this argument fails you may have to accept that objectives will be cascaded down the
organization as a top-down process. Even so, performance management can still operate effec-
tively at the level of defining individual goals and competency levels and reviewing perform-
ance in relation to them, and at least it should give individuals some scope to comment on the
objectives that have cascaded down as they apply to them. Some managers may continue to
take an autocratic line, but others may accept the benefits of the joint approach that is funda-
mental to the philosophy of a complete process of performance management. This is where
the HR function can foster cultural change by encouraging those who are moving in the right
direction, pointing out the benefits to the laggards by reference to successful experiences else-
where in the organization and finally, and importantly, convincing the head of the organiza-
tion, if she/he needs to be convinced, that the whole process will add value and contribute
significantly to bottom-line organizational performance.
In short, when introducing performance management you cannot work against the culture of
the organization. You have to work within it, but you can still aspire to develop a performance
culture, and performance management provides you with a means of doing so.

On whom should performance reviews focus?

Many performance management and review ‘systems’ seem to focus almost exclusively on the
upper and lower extremes of the performance distribution, neglecting the core of middle-of-
the-road performers on whom the organization relies to function effectively in its day-to-day
operations and to sustain itself in the future.
This is illogical because exceptional performance is unlikely to go unrecognized and very poor
performance should be equally obvious. From the point of view of both motivating and
keeping people, the majority of employees who are in the middle of the performance distribu-
tion should be given equal if not more attention.

On what should the performance review meeting focus?

There are two focus issues in performance review meetings: first, the emphasis that should be
placed on performance improvement as distinct from broader developmental needs; second,
the degree to which the meeting should be forward rather than backward looking.
 Performance Reviews 129

A single-minded focus on performance improvement at the expense of broader issues is

unlikely to produce much motivation. The focus should also be on the individual’s learning
and development needs, bearing in mind that no one is simply being prepared for vertical
movement up the hierarchy. This means helping people to widen their range of abilities
(multi-skilling in shop floor terms) to enable them to meet the demands of future change and
the additional activities they may be required to carry out. In this way employability both
within and outside the organization can be enhanced. This particularly applies to the core of
middle-of-the-road performers.
Performance review meetings that are used or are perceived as being there simply to generate
ratings for performance-related pay purposes will almost inevitably fail to achieve what should
be regarded as their most important objectives – to motivate and develop people.
The slogan that should be imprinted on the minds of all reviewers is that ‘Yesterday is only
useful if it teaches us about today and tomorrow.’ The analysis of past performance is a neces-
sary precursor to the preparation of performance and development plans for the future. But
the tendency to dwell on the past rather than looking to the future must be avoided if the
review is going to make any positive motivational impact.

What criteria should be used?

The criteria for assessing performance should be balanced between:
• achievements in relation to goals;
• the level of knowledge and skills possessed and applied (competences);
• behaviour in the job as it affects performance (competencies);
• the degree to which behaviour upholds the core values of the organization;
• day-to-day effectiveness.
The criteria should not be limited to a few quantified objectives, as has often been the case in
traditional appraisal schemes. In many cases the most important consideration will be the job
holders’ day-to-day effectiveness in meeting the continuing performance standards associated
with their key tasks. It may not be possible to agree meaningful new quantified targets for
some jobs every year. As much attention needs to be given to the behaviour that has produced
the results as to the results themselves.

The impact of management style

Most managers have their own management style and are reasonably well aware of what it is.
If it has worked well for them in the past they will not want to change it in a hurry. But how
do managers with a highly directive style adjust their behaviour when they are expected to
130 Performance Management Processes

conduct review meetings on a participative, two-way basis? With difficulty, if at all, in some
cases. Guidance and coaching will be required if managers are to handle successfully the poten-
tial dilemma of inconsistency between their normal behaviour and how they are expected to
behave when conducting performance reviews.

Performance review skills

Conducting an effective performance review, especially one in which problems of under-
performance have to be discussed, demands considerable skill on the part of the reviewer in
such areas as giving feedback, agreeing objectives, assessing performance and development
needs, planning for performance improvement and carrying on a dialogue.
One advantage of introducing an element of formality into the review process is that it high-
lights the skills required to carry out both formal and informal reviews and emphasizes the
role of the manager as a coach. These skills come naturally to some managers. Others, proba-
bly the majority, will benefit from guidance and coaching in these key aspects of their manage-
rial roles.

Outcome issues
If individual employees who have taken part in performance review meetings are to be moti-
vated and retained, the outcomes of the meetings have to be relevant and put into action. All
too often, review meetings have been seen as ends in themselves. It is necessary to be clear
about the range of outcomes that are wanted and can be handled. Besides performance devel-
opment plans, these can include personal development plans, lateral job moves, job restruc-
turing and secondments.
Almost worse than no outcomes is the situation when outcomes are agreed and written up but
not followed through. Raising expectations that are not subsequently met is a prescription for
demotivation and disenchantment. Reviewers need to be certain that they do not over-
commit themselves or the organization. They also need to be sure about their own commit-
ment, as well as that of the individual, to agreed outputs.
Enacting agreed outputs is a powerful demonstration of the organization’s commitment to the
individual.

Dealing with positive and negative elements

This is probably the area of greatest concern to line managers, many of whom do not like
handing out criticisms. Performance reviews should not be regarded as an opportunity for
attaching blame for things that have gone wrong in the past. If individuals have to be shown
that they are accountable for failures to perform to standard or to reach targets, that should
have been done at the time when the failure occurred, not saved up for the review meeting.
 Performance Reviews 131

And the positive elements should not be neglected. Too often they are overlooked or men-
tioned briefly then put on one side. The following sequence is not untypical:
• Objective number one – fantastic.
• Objective number two – that was great.
• Objective number three – couldn’t have been done better.
• Now objective number four – this is what we really need to talk about, what went
wrong?
If this sort of approach is adopted, the discussion will focus on the failure, the negatives, and
the individual will become defensive. This can be destructive and explains why some people
feel that the annual review meeting is going to be a ‘beat me over the head’ session.
To underemphasize the positive aspects reduces the scope for action and motivation. More
can be achieved by focusing on positives than by concentrating on the negatives. People are
most receptive to the need for further learning when they are talking about their achieve-
ments. Empowering people is a matter of building on success.
But this does not mean that under-performance should go unnoticed. Specific problems may
have been dealt with at the time but it may still be necessary to discuss where there has been a
pattern of poor performance. The first step, and often the most difficult one, is to get people
to agree that there is room for improvement. This will best be achieved if the discussion focuses
on factual evidence of performance problems. Some people will never admit to being wrong
and in those cases you may have to say in effect: ‘here is the evidence; I have no doubt that this
is correct; I am afraid you have to accept from me on the basis of this evidence that your per-
formance in this respect has been unsatisfactory.’ It is often useful to give examples of what is
considered effective performance in the area under review for comparative purposes. If at all
possible, the aim is not to blame people but to take a positive view based on obtaining answers
to questions such as these:
• Why do you think this has been happening?
• What do you think you can do about it?
• How can I help?

Using reviews as a communications channel

A well-conducted review meeting provides ‘quality time’ in which individuals and their man-
agers can discuss matters affecting work and future developments. They also provide an extra
channel of communication.
Properly planned review meetings allow much more time and space for productive conversa-
tion and communication than is generally available to busy managers – this is perhaps one of
their most important purposes.
132 Performance Management Processes

There should be ample scope for communication about the organization’s or department’s
objectives and how individuals fit into the picture – the contribution they are expected to
make. Information can be given on significant events and changes in the organization that will
impact on the role of the department and its members.
One of the objections that can be made to this free flow of information is that some of it will
be confidential. But the need for confidentiality is often overstated. If the feeling is conveyed
to people that they cannot be trusted with confidential information, it will not do much for
their motivation.
The review meeting often presents a good opportunity for upward communication. This is the
time to find out about how people feel about their jobs, their aspirations and their relation-
ships with their peers and their managers. The opportunity a review meeting gives to people
to stand back from everyday pressures and consider matters that concern them with a sense of
perspective is an important benefit.

Balancing past performance against future potential

Traditionally, line managers have been asked to predict the potential for promotion of their
subordinates. That has put them in a difficult position unless they have a good understanding
of the requirements (key dimensions and capabilities) of the roles for which their staff may
have potential. This is unlikely in many cases, although the development of ‘career maps’
setting out the capabilities required in different roles and at different levels can provide inval-
uable information.
In general terms, past performance is not necessarily a good predictor of potential unless it
includes activities related to dimensions that are also present in the anticipated role.
Because of these problems, assessments of potential are now less frequently included as part of
the performance review meeting. They are more often carried out as a separate exercise in a
talent management programme, sometimes by means of assessment centres.

When should reviews be held?

The usual practice is to have an annual formal review that provides a basis for a new perform-
ance agreement and performance rating, if that is required. Some organizations hold all
reviews at the same time, especially if they need a performance rating for pay purposes. The
timing of the review can be linked to the corporate business or operational planning pro-
gramme to ensure that teams and individuals can contribute to the formulation of depart-
mental, and ultimately corporate, objectives and to provide for these team/individual objectives
to flow from those finally determined at corporate, functional and departmental levels. The
model of the performance management system at the Royal College of Nursing (Figure 14.8 in
Chapter 14) shows how this can be done.
 Performance Reviews 133

There may be some scope allowed for separate business units or functions to align perform-
ance reviews to their own business planning cycle or to carry them out at the time most con-
venient to them. There is much to be said for allowing the maximum degree of flexibility in
order to meet the needs of line management rather than to conform to the bureaucratic
requirements of the HR department.
Some organizations have required performance reviews to be conducted on the individual’s
birthday (or thereabouts) or on the anniversary of their joining the organization. This spreads
the load for managers but it makes it impossible to fit the review into the annual planning
cycle, which is highly desirable if the integration of individual/team objectives and corporate
objectives is to be achieved.
If the formal performance review is spread over the year, but the company still conducts pay
reviews at the same time annually, a separate assessment for such reviews would have to be
carried out.
Corporate guidelines to managers on performance management often suggest that they should
hold interim formal progress reviews during the year, say once a quarter or half-way through
the review year. Such reviews could be incorporated into the normal work or project review
process (eg the supervisory meetings held by social service departments) or they would be held
at focal points as decided when preparing the performance plan.
Managers should be allowed to choose their own times for conducting such interim or infor-
mal reviews, although the importance of carrying them out and not waiting until the end of
the year could be emphasized in guidance notes and training. To underline the voluntary and
informal nature of such progress reviews it is best not to ask managers to complete standard
review forms. They should be left to document them as they feel fit.
Some organizations require a formal performance review for new starters at the end of, say, six
months or a probationary period, if that has been stipulated.

Performance review problems

The main problems that arise in conducting performance reviews are:
• identifying performance measures and criteria for evaluating performance;
• collecting factual evidence about performance;
• the existence of bias on the part of managers;
• resolving conflict between reviewers and the people they review;
• defensive behaviour exhibited by individuals in response to criticism.
There are no easy answers to these problems, no quick fixes. It is wise never to underestimate
how hard it is for even experienced and effective managers to conduct productive perform-
134 Performance Management Processes

ance review meetings. It was the facile assumption that this is a natural and not too difficult
process that has bedevilled many performance appraisal schemes over the years. This assump-
tion has certainly resulted in neglect of the need to provide adequate guidance and training for
reviewing managers and, importantly, those whom they review.
The approaches described in this chapter for preparing for and conducting performance
reviews can alleviate the problems listed above even if they cannot guarantee to eliminate
them. In summary, these approaches are to:
• Ensure that the criteria for evaluating performance cover agreed goals (quantified
wherever possible), competencies based upon proper role analysis and measures of
day-to-day effectiveness, preferably stated as standards of performance. Ensure also
that success criteria have been agreed and specific performance measures identified.
• Monitor performance throughout the year in relation to performance plans and agreed
goals, performance standards and behavioural requirements (competencies). Use the
success criteria and performance measures as the basis for monitoring progress. Ensure
that there is feedback at the time based upon evidence (techniques of providing feed-
back were discussed in Chapter 8) and record any critical incidents as they occur to
assist in an overall assessment of performance.
• Take steps to eliminate bias. If the review process does not involve the delivery of judge-
ments in the form of performance ratings bias may not appear so obviously, but it can
still exist in subtle ways. Mentors and training can alert individuals to the risk of bias
and assessments can be monitored by the manager’s manager and HR.
• Ensure that both managers and their staff understand the positive nature of the process.
Train managers in the virtues of building on positives as well as how to provide con-
structive feedback that is based on fact and not on opinions about the employee’s per-
sonality traits.
• Encourage a positive approach by managers so that by using constructive criticism
rather than attaching blame, they can reduce defensive behaviour. Briefing for all those
involved on the benefits of the process to both parties should also help. Getting indi-
viduals to assess their own performance (self-assessment, as discussed later in this
chapter) is another way of reducing defensive behaviour.

Evaluating formal performance reviews

There is no doubt that in spite of careful training and guidance some managers will be better
at conducting performance review meetings than others. So how can their effectiveness as per-
formance reviewers be evaluated as a basis for further training or guidance when necessary?
Traditionally, the personnel department had a policing role – checking that performance
appraisal forms were completed on time and filled in properly. However, this will convey
nothing about the quality of the meeting or the feelings of individuals after it; they may have
 Performance Reviews 135

signed the form stating they agree with its comments but this does not reveal what they really
thought about the process.
Another approach is to get the manager’s manager (the so-called ‘grandparent’) to review the
form. This at least provides the individual who has been reported on with the comfort of
knowing that a prejudiced report may be rejected or amended by a higher authority. But it still
does not solve the problem of a negative or biased review process that would probably not be
conveyed in a written report.
Space on the review form can be given to individuals to comment on the review, but many will
feel unwilling to do so. If the interview has been conducted in an intimidating manner, how
ready are they likely to be to commit themselves to open criticism?
Another, potentially more productive, approach is to conduct an attitude survey following
performance reviews asking individuals in confidence to answer questions about their review
meeting such as:
• How well did your manager conduct your performance review meeting?
• Are there any specific aspects of the way in which the review was conducted that could
be improved?
• How did you feel at the end of it?
• How are you feeling at the moment about your job and the challenges ahead of you?
• How much help are you getting from your manager in developing your skills and abilities?
The results of such a survey, a form of upward assessment, can be fed back anonymously to
individual managers, and possibly their superiors, and action can be taken to provide further
guidance, coaching or formal training. A general analysis of the outcome can be used to iden-
tify any common failings that can be dealt with by more formal training workshops. Evalua-
tion of performance management processes is dealt with more fully in Chapter 24.

Analysis of the issues

Effective performance review training and processes are not likely to happen unless the issues
referred to above have been thoroughly analysed. This analysis should be used as the basis for
designing training programmes and developing guidelines on preparing for and conducting
reviews as described below.

Preparing for formal review meetings

Review meetings are likely to be much more effective if both parties – the manager and the
individual – have prepared for them carefully. The extent to which detailed preparation is
needed will vary according to the type of review. More care would need to be taken for a
136 Performance Management Processes

formal annual review, and the approach suggested below is aimed at such occasions. But the
same principles would apply, albeit less formally, to interim reviews.
Preparation should be concerned with:
• the purpose and points to be covered at the meeting;
• what evidence on performance the manager should get ready for the meeting;
• what the individual should do in the way of self-assessment.

Purpose and points to be covered

The purpose of a review meeting would be defined as being to:
• provide an opportunity for a frank, open but non-threatening discussion about the
individual’s performance and learning and development needs;
• give the individual a chance to discuss her/his aspirations and any work problems;
• focus the attention of both the individual and the manager on objectives and plans for
the future (ie provide the basis for the next performance agreement or plan).
The things to do at a performance review meeting (it is probably best not to over-formalize
this list by calling it an agenda) are set out below.

What to do in a performance review meeting

• Discuss achievements in relation to objectives and performance/development plans.
• Assess the level of competence achieved against the headings and descriptors in
the individual’s role definition.
• Discuss the extent to which the individual’s behaviour is in accord with the
organization’s core values.
• Identify any problems in achieving agreed objectives or standards of performance.
• Establish the reasons for such problems, including any factors beyond the
individual’s control as well as those that can be attributed to the individual’s
behaviour.
• Discuss any other problems relating to work and the individual’s relationships
with his/her manager, colleagues and, if appropriate, subordinates.
• Agree on any actions required to overcome problems.
• Agree on any changes to the role profile in terms of key result areas or key tasks
and competency requirements that might be necessary.
• Review and revise performance measures (standards) as necessary.
 Performance Reviews 137

Preparation for the meeting

The manager should initiate the main formal review meeting by letting the individual know
some time in advance (two weeks or so) when it is going to take place. A period of about two
uninterrupted hours should be allowed for the meeting.
The manager should discuss with the individual the purpose of the meeting and the points to
be covered. The aim should be, as far as possible, to emphasize the positive nature of the
process and to dispel any feelings of trepidation on the part of the individual. The manager
should also suggest that the individual prepares for the meeting along the lines described
below.
The basis for preparation by managers should be the objectives, standards, competency
requirements and plans agreed at the last main review as amended during the year. Achieve-
ments should be assessed by the application of appropriate performance measures. Any other
evidence of good or not-so-good performance should also be assembled. Reference should be
made to any notes made during or following interim review meetings about the individual’s
performance. Alterations to the individual’s role since the last review should be noted. Con-
sideration should be given to any changes in internal organizational, divisional or departmen-
tal circumstances that may have affected the definition and achievement of objectives. External
pressure that may have affected performance and outcomes should also be noted. A prepara-
tion checklist is given in the performance management toolkit in Appendix A.
Individuals should prepare for the meeting by carrying out a process of self-assessment as
described below.

Self-assessment
Self-assessment is a process in which individuals review their own performance, using a struc-
tured approach, as the basis for discussions with their managers in review meetings. On the
whole people are surprisingly realistic when they do this, as long as their assessment is not
going to contribute directly to a performance-related pay decision. In fact, some people under-
estimate themselves, which makes it even easier for their manager to take a positive
approach.
Self-assessment involves analysing performance and identifying successes and any problems
in achieving goals. Individuals may attribute any problems to lack of skill or experience and
should be encouraged to be specific so that a personal development plan can be prepared.
They may also comment on a lack of adequate support from their manager or colleagues,
insufficient resources, unattainable objectives or any other factor beyond their control that
they believe has affected their performance. The structure for self-assessment can be provided
138 Performance Management Processes

by a self-assessment check list that is given to individuals before the review meeting. An
example is provided in the performance management toolkit in Appendix A.

Advantages of self-assessment
The main advantage of using a self-assessment approach is that it reduces defensiveness by
allowing individuals to take the lead in reviewing their own performance rather than having
their managers’ judgements thrust upon them. It therefore helps to generate a more positive
and constructive discussion during the review meeting, which can focus on joint problem-
solving rather than attaching blame. In addition, it encourages people to think about their
own development needs and how they can improve their own performance, and provides for
a more balanced assessment because it is based on the views of both the manager and the indi-
vidual rather than those of the manager alone

Problems of self-assessment
Self-assessment can allow employees to take the lead but the aim of the review meeting remains
that of achieving an agreed joint assessment and a development plan. Managers have therefore
to contribute and, as necessary, add to the views expressed by employees. They should also be
prepared to allow employees in effect to criticize them for lack of support, providing inade-
quate resources or setting unachievable standards. Many managers may be unwilling to accept
such criticisms and many employees may be unwilling to make them for fear of their manag-
ers’ reactions. Steps can be taken to overcome this problem by education, guidance and
example, but realistically, this may be difficult.
There is still room for confrontation if managers bluntly disagree, and it may require consid-
erable skill on their part to persuade employees to reconsider their self-assessment. This can
be achieved by good reviewers, but it means taking care to handle the situation by asking
further questions or presenting additional facts rather than simply expressing an adverse
opinion that is unsupported by evidence.
As mentioned earlier, many people can be surprisingly realistic in assessing their own per-
formance, but some will overestimate their abilities and they need to be handled carefully.

Requirements for success

Incorporating self-assessment as part of a performance management/review process is most
likely to be successful when all concerned fully understand the purpose of self-assessment and
both managers and employees understand their respective roles in the review meeting and
how they should be carried out. Employees need guidance on how to carry out self-assess-
ments, and both managers and employees need training in conducting reviews based on self-
assessment, especially on joint problem-solving methods.
 Performance Reviews 139

Self-assessment is directed to the future motivation and development of the employee and
should not be used simply as the basis for raking over past problems, although it should be
recognized that the analysis of any such problems will provide guidance on the way ahead.
Clearly, self-assessments should not be taken directly into account when making pay, promo-
tion or disciplinary decisions.

Conducting a formal performance review meeting

There are golden rules for conducting formal performance review meetings:
• Be prepared. Managers should prepare by referring to a list of agreed goals and their
notes on performance throughout the year. They should form views about the reasons
for success or failure and decide where to give praise, which performance problems
should be mentioned and what steps might be undertaken to overcome them. Thought
should also be given to any changes that have taken place or are contemplated in the
individual’s role and to work and personal objectives for the next period. Individuals
should also prepare in order to identify achievements and problems, and to be ready to
assess their own performance at the meeting. They should also note any points they
wish to raise about their work and prospects.
• Work to a clear structure. The meeting should be planned to cover all the points iden-
tified during preparation. Sufficient time should be allowed for a full discussion –
hurried meetings will be ineffective. An hour or two is usually necessary to get maximum
value from the review.
• Create the right atmosphere. A successful meeting depends on creating an informal
environment in which a full, frank but friendly exchange of views can take place. It is
best to start with a fairly general discussion that aims to put the individual at ease and
create a non-threatening atmosphere and that covers the purpose of the meeting,
emphasizing that it is a joint affair before getting into any detail.
• Provide good feedback. Individuals need to know how they are getting on. Feedback
needs to based on factual evidence and careful thought should be given to what is said
and how it is said so that it motivates rather than demotivates people. Techniques of
giving feedback – a key aspect of the meeting – are described at the end of this
chapter.
• Use time productively. The reviewer should test understanding, seek information, and
seek proposals and support. Time should be allowed for the individual to express his or
her views fully and to respond to any comments made by the manager. The meeting
should take the form of a dialogue between two interested and involved parties both of
whom are seeking a positive conclusion.
140 Performance Management Processes

• Use praise. If possible, managers should begin with praise for some specific achieve-
ment, but this should be sincere and deserved. Praise helps people to relax – everyone
needs encouragement and appreciation.
• Let individuals do most of the talking. This enables then to get things off their chest and
helps them to feel that they are getting a fair hearing. Use open-ended questions (ie
questions that invite the individual to think about what to reply rather than indicating
the expected answer). This will encourage people to expand.
• Invite self-assessment. This is to see how things look from the individual’s point of
view and to provide a basis for discussion – many people underestimate themselves.
• Ask questions such as:
– How well do you feel you have done?
– What do you feel are your strengths?
– What do you like most/least about your job?
– Why do you think that project went well?
– Why do you think you didn’t meet that target?
• Discuss performance not personality – discussions on performance should be based on
factual evidence, not opinion. Always refer to actual events or behaviour and to results
compared with agreed performance measures. Individuals should be given plenty of
scope to explain why something did or did not happen.
• Encourage analysis of performance – don’t just hand out praise or blame. Analyse
jointly and objectively why things went well or badly and what can be done to maintain
a high standard or to avoid problems in the future.
• Don’t deliver unexpected criticisms – there should be no surprises. The discussion
should only be concerned with events or behaviours that have been noted at the time
they took place. Feedback on performance should be immediate; it should not wait
until the end of the year. The purpose of the formal review is to reflect briefly on expe-
riences during the review period and on this basis to look ahead.
• Agree measurable objectives and a plan of action – the aim should be to end the review
meeting on a positive note.
These golden rules may sound straightforward and obvious enough but they will only func-
tion properly in a culture that supports this type of approach. This is why it is essential to get
and keep top management support and to take special care in developing and introducing the
system and in training managers and their staff.
 Performance Reviews 141

A problem-solving approach
The answers to these checklist questions provide an agenda for the review meeting in which
individuals take the lead and managers respond as appropriate. The aim is to adopt a prob-
lem-solving approach. The role of managers is to comment on and sometimes add to the indi-
viduals’ self-assessment. They should avoid confrontation – that is, total disagreement with
the individuals’ opinions – and should preferably ask exploratory questions such as those
listed below.

Examples of questions posed by the manager during a review meeting

• Why do you feel like that?
• Why do you think that happened?
• Have you taken into account such and such an event?
• The information I have is that you have not consistently achieved the
performance standard for this particular task we agreed last year. Here are some
examples. How did this happen?
• Do you think there are any other causes of this problem?
• Do you think you have contributed to this problem?
• Are there any other issues or problems you have not mentioned?
• How are we going to make sure that this problem does not occur again in the
future?

This approach enables the review to be constructive. It is conducted on a joint problem-solv-

ing basis, focusing on the identification and exploration of the key problems facing the
employee and encouraging him or her to think through the issues involved. The manager will
provide feedback, but this is constructive feedback in that it is aimed at encouraging the
employee to work out for himself or herself what needs to be done, with the support or help
of the manager.