Rethinking Traditional Performance Reviews

It’s that time of year again when many businesses are preparing for their annual performance reviews. With the Australian job market still rippling from ‘The Great Resignation’, the fundamental tool of employee performance reviews has never been so important. They cannot be overlooked or sidelined, now more than ever! 

A common struggle we hear from business owners is the difficulty finding the amount of time needed to have meaningful performance reviews, but also their desire to have them in the first place. It seems that most business owners, rather than seeing them as an opportunity to have an open and honest discussion with their employees, see them as stressful, costly, time consuming, and in some cases, doing more bad than good for employee morale.

But with the state of the current job market, in order to retain talent, we cannot afford to overlook the power a performance review has. We all know that if we want our business to be great, we need great people. The only way to ensure this is through communicating with our employees about how we achieve our definition of “great”, and in what ways they can continue to grow to support that.

To ensure retention and maximise employee growth and performance, we first need our employees to be engaged. If we look at some of the key drivers of engagement, it becomes apparent that we need to adapt and reshape the traditional performance review: 

1. Role clarity – A performance review that not only reinforces the direction of the business, but the role that each employee plays in this is critical for employees to feel a sense of worth and importance to the business and drives engagement.

2. Feedback – We should not shy away from providing both negative and positive feedback to employees, as long as it’s constructive. Even negative feedback is far more motivating than no feedback at all, which leaves employees constantly questioning their performance. By providing feedback we are offering our employees the opportunity to grow and develop.

3. Career and development – One of the biggest drivers for retention and engagement is that all employees have a sense that their skills and role within the business is continually developing. Employees that believe their career to be stagnate are the employees that most need your support, ensuring the performance review focuses around honest discussion about career objectives and potentials, and most importantly, a plan of attack to get there.

4. Values – The culture of your business is underpinned by both the values that are demonstrated and not demonstrated in practice. Ensuring a good culture is key to maximum employee performance, meaning all employees must be aware of the values and behaviours expected of them. They must also feel like you as business owners are also upholding the core business values.

Never before have we seen a workforce like this. The value of performance reviews isn’t to be dismissed, but they must be seriously reworked to adapt to these new times with a focus on employee motivation, engagement, attraction and retention and how they enhance performance. By setting in place solid objectives and practices for performance reviews throughout the year, rather than in the weeks leading up, both employees and managers are in a better position to seek real value from the process, past simply checking boxes. 

 For a free consultation or review of your performance reviews contact TalentCode HR at or 1300 559585.