The Truth about Performance Reviews

Two articles recently published in The Australian Financial Review (11 and 12 August 2015) note how the pendulum has swung in the HR world on the value of performance reviews. Suddenly, it seems that HR experts are now of the view that performance reviews are a waste of time and money. They say they are often counterproductive in terms of improving employee performance and ill-suited to today’s fast paced world of immediate feedback.

This is nothing new to those who have been subjected to performance reviews, myself included. The lawyers I worked with at national law firms were subject to bi-annual reviews. These reviews asked questions to which there were often no answers and were followed by a meeting with a partner. I can’t say that we got a lot out of them.

What has finally been admitted by HR experts is that good managers undertake performance review on an informal basis, all of the time. They give constant feedback and make regular informal assessments of those they are supposed to be managing. They give advice as to how to remedy any performance issue at any early stage before it becomes a more serious, entrenched problem. They don’t save up all of their feedback and criticism for an annual review.

All of this raises another issue. If you are a party to an employment agreement (employer or employee) that sets out provisions for performance review, it is important that those provisions are complied with. Often these provisions stipulate who is to undertake the performance review (usually an immediate manager), how much notice is to be given of the performance review and how it is to be conducted, including opportunities for the employee to provide comment and allow time for improvement in any performance issues. These provisions are usually intended to provide a system of review that is procedurally fair, and to avoid the termination of employee’s employment on unfair grounds. If employers fail to comply with such terms, they may be in breach of the employment agreement, and face a claim for bullying or a claim for unfair dismissal in the event of termination.

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