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It’s that wonderful time of year when companies and organizations are strategically planning for the upcoming year. Essential to the planning process is analyzing the individuals within a workforce through annual performance reviews. At NBS, we focus on the provision of pre-employment and technical skill assessments, which are a complementary tool to performance reviews. With that, we often receive a plethora of questions about performance reviews—one being, “what are the different types of performance reviews.As we close 2018, we thought what better topic to address.

What is an annual performance review?

A performance review is the official discussion and documentation of an employee’s performance and development. The items commonly addressed are the ability to reach goals, attitude, and timeliness, along with specifics that revolve around the organization. There are multiple types of performance reviews, the most common being: self-assessments, 360-degree, objective-focused, and a grading system.

Self-assessment

A bit self-explanatory, self-assessment is when an employee provides their thoughts and analysis of their performance throughout commonly addressed time frame. Generally, the employee will identify where they think their performance has progressed and where they need to improve. There are a number of tactics to gather this information, but the most common is a written response through a series of open-ended questions.

There is a negative stigma that surrounds self-assessments—that there is too much opportunity for bias because employees may lie to appear more impressive. However, it’s actually a proven tactic to gather an honest opinion of where employees view their professional progress. 

360-degree

If an employer or manager is striving to avoid any bias, a 360-degree performance review is a safe bet. This review involves gathering the thoughts and opinions of every major touch point of an employee. Managers, fellow employees, customers, and even vendors may all be asked for commonly addressed on how well an individual is doing their job.

This type of review process is probably the most labor-intensive which can cause headaches if not properly executed. Still, with the right plan of action, 360-degree reviews provide multi-dimensional feedback that is very worthwhile in the long run.

Objective-focused

A very simple employee appraisal process is objective-focused performance reviews. Here, employers simply measure each employee’s performance by the number of goals they reach and how efficiently they do so. For this review process to be effective it is imperative that employees be well aware of their goals, timelines, expectations, and that their performance review is based on that criteria. Without that, employers and managers risk introducing multiple levels of bias into the review process. 

Though this review process can be highly effective and straightforward, there are always circumstances that can affect employees completing their objectives. Those should always be taken into consideration when using objective-focused performance reviews; it is simply not fair to do otherwise.

Grading system

Possibly the most common format for annual-reviews is the grading system. Generally, employers or managers develop their own criteria for multiple areas of an employee’s role. They then use a grading system, usually a five- or ten-point scale, to grade the performance of the employee based on the predetermined criteria.

This type of system may take quite a bit of work to establish on the front end, but if properly implemented it creates an efficiently consistent rating system. Additionally, it provides the ability to gain quantitative results making this system very popular for employers.

Awareness of performance reviews

In any performance review scenario, it is recommended that supervisors make employees aware of how their professional progress will be appraised. There is too much opportunity for bias in a system where employees are unaware of the criteria of their appraisal. For example, if team leaders use a grading system based on four factors, and forty percent of employees find out about that system, the data dramatically skews by nearly half of the workforces’ efforts. It is ideal for employers or managers to provide this information during the hiring process to ensure that there is no lag time on gathered data or performance. Additionally, they’ll want to reaffirm the review process and criteria annually.     

overhead view of papers on a desk

What type of performance review is the best?

Honestly, the best type of performance review and documentation to the nature of the business, the size of the workforce, and the duties of the employees. At NBS, we like to think that a combination of systems is the best direction—warranting that each has fair and unbiased criteria.U

Using technical skill assessments with performance reviews

It can be hard to measure an employee’s progress and success purely through observation which is why we also recommend the combination of evaluation tests (skill assessments) and performance reviews. This is especially useful for new or entry-level employees who have to do a great deal of learning while on the job. By using this combination, managers can determine training needs through documented observation and quantifiable data. To learn more about using employee evaluation tests with performance reviews click here.

If you have any questions about performance reviews or technical skill assessments, contact us today!