An effective performance review: 5 tips

As an employer or manager, you probably plan a performance review with your employees once a year, at a fixed moment. But why not consider a more modern approach for your SME, where you and your employees discuss performance and development wishes regularly?

To get the most out of your performance appraisals, there are different approaches. The 5 tips below will help you as an employer or manager find a modern performance appraisal that suits you.

1. Plan the meetings

Determine how often it is useful to sit down with your employee and what type of meeting you want to have. Within the traditional HR cycle, the performance review is 1 of 3 types of annual personnel interviews:

Planning meeting

A planning meeting is two-sided: the employer or manager and the employee both contribute something. During this meeting, you plan the objectives for the coming year together and discuss what is needed to achieve them, such as certain behaviour, skills, or knowledge. Record the agreements in a Personal Development Plan (in Dutch).

Performance interview

The performance interview is an interim assessment of the progress of the agreed agreements. For example, objectives may turn out to be unrealistic due to external changes (the coronavirus), internal bottlenecks (lack of time or problems with collaboration) or personal circumstances (illness). The performance interview is a two-way conversation. Employer or manager and employee prepare their input and can ask questions. In this conversation you make adjustments where necessary, so that the objectives can be achieved. Record the new agreements in the PDP.

Assessment interview

The assessment interview takes place at the end of the year and is a one-sided interview. Both parties prepare the assessment interview. For example, an employee sends an overview of his performance or a self-assessment, prior to the interview. The employer or manager then gives his assessment during the interview. This includes consequences, such as a salary increase, job change or warning. The assessment should not have a surprising outcome. Provide a written assessment and have both sign it.

In a modern HR cycle, these 3 conversations are not standard. Decide which interview formats best suit your business. Does your organisation have a clear hierarchical structure with many long-term objectives? Then it makes sense to have all three conversations at fixed times. Do you work more with multidisciplinary teams and short-term goals? Schedule performance reviews when you close a specific goal or project. This does not have to be once a year and it does not have to be linked to a planning or assessment interview. You decide how often you want to sit down with your employee.

2. Pay attention to development

In a performance interview, look beyond the performance of your employee. Also pay attention to personal development and growth. Talk about their ambition and development perspective, both inside and outside your company. Ask open questions about how the employee wants to grow within their own position, what their dream job is and how they want to improve.

3. Keep records

A clear picture of the performance of your employee depends on good reporting. So, assess the employee's performance annually and ensure that a report is added to their personnel file. Briefly record the agreements made and make a note of whether your employee complies with them. The report provides insight into the growth and performance of your employee. Does the employee show no improvement and do you want to let them go? The personnel file forms your evidence with a subdistrict court or the UWV.

As an employer, you are legally obliged to keep a personnel file for every employee, including personal data, performance reports, and sick leave. The file must be available to both the employer and the employee at any time. The GDPR Privacy Act applies to the personnel file. You are also responsible for correct storage.

4. Have interim conversations

Continuous alignment ensures that you can quickly respond to changes. Employees also feel more involved with your organisation when there is regular attention for their well-being. For example, plan a bi-weekly, half-hour meeting, in which you discuss how things are going. The conversation revolves around progress and is not an (interim) assessment moment.

Possible questions in an interim interview are:

  • How are you?
  • What is going well and what could be improved?
  • How is the cooperation with colleagues?
  • What do you need to do your job well?

Make a report at the end of each conversation and share it with the employee. Use this as a starting point for the next interview or performance review.

5. Immediately reward achievements

Celebrate achievements at once. This improves the bond with your employee and binds them (in Dutch) to your company. If you delay expressing your appreciation, you run the risk that talented employees will not feel seen and involved. As a result, they may look for another employer. Reward your employees with an extra allowance, cake, a company outing or opportunities for personal development. Think of training courses or new responsibilities.

Are you getting started in hiring staff in the Netherlands? Take a look at this checklist for hiring staff to find out what your obligations are.

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