Blog Post

How HR Can Use Performance Reviews to Help the Whole Company

Suzanne Lucas

Founder, Evil HR Lady

It's not hard to understand why an increasing number of companies are choosing to do away with annual performance reviews: according to one study, over 94 percent of employees would prefer their manager address feedback in real time rather then wait until the end of the year.

But annual performance reviews aren't all bad. Formal ratings provide a macro-view of performance and engagement levels across the company. If the results of any group (department, experience level, etc.) stick out—it can indicate a bright spot or potential problem worth looking into.

And that isn't the only benefit of an annual performance review. They key to their success is to utilize them not just at year-end but throughout the year, as well.

Here are three ways to use your performance reviews to ensure your employees have the skills they needs to succeed.

1) Fill Talent Gaps With Highly Rated Employees

Take note of employees that consistently earn a score of "above expectations" on their annual performance review. These are the employees you don't want to lose, so you should work with them to plan out their career paths and make sure they see a future for themselves at the company. What skills do they already have that make them shine? What skills do they lack that they need to advance?

Make a plan for these high performers to both gain new skills and to use their current skillset to help the business. Speak with them. Let them know they have great potential and you're there to help their careers while also helping the business grow.

This is also a good time to use talent management software: If you incorporate your performance reviews into the software, you can get automatic reports that show talent gaps, track goals and provide reminders of what skills employees need to be focusing on to fill those gaps.

2) Put People Where Their Skills Are Most Needed

We tend to focus on the high potential employees—as we should—but just because someone merely meets expectations in their current job, doesn't mean they don't have potential.

Just like you did above, take a look at the gaps in skills and the successes for each employee. If an employee scored "above expectations" in two categories and "meets expectations" in four what can you do to take advantage of those "above expectation" skills? This may indicate a time for a reorganization to put people where their skills are most needed.

There's nothing wrong with saying, "Jane, it's obvious that you weren't meant to be a procurement specialist, but you do have strong skills in this area. Would you be interested in working towards a career change?" Jane will probably be thrilled that her less than stellar review isn't seen as a sign that she's a bad employee, but that she's not in the best role for her.

Again, a good talent management application can help with this by keeping you aware of what skills people are working towards and what departments need these skills. Managers only see their own employees, but HR should take a look at the business as a whole. There's no reason to keep people in their current jobs if they would help the business more in a different position.

3) Prepare for Changes Ahead

The only guarantee when it comes to talent management is that your company and it's needs will change in the year ahead. You may have some idea of how that will happen: Are you scaling-up or cutting down? Is there new legislation that will impact the business? Whatever it is, change will happen. By taking a look at the annual performance reviews you'll be able to identify looming skill gaps in the business and proactively make plans to fill them.

This information can help you develop training programs and better target your recruiting. You know what skills your company has and where the business lacks strength. You can't expect to find perfect people off the street for every position, but if you take the time to review the performance reviews, you'll know how best to target job candidates and can start working on training your current employees.

Don't let your employee performance reviews just sit until next December. Take a good look and help your business by recruiting, training and developing people so your business has the skills it needs to succeed.

Photo: Creative Commons

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