The constantly evolving business environment has truly changed how we work and what is expected of employees. We live in an era of 24 hour communication, where the ability to be responsive and efficient is more crucial than ever. At the same time, companies are under constant pressure to deliver better results and outperform their competitors. Yet in order to achieve these goals, organisations need to ensure they retain an engaged, loyal and motivated workforce. And for that workforce to exist, the importance of regular performance reviews cannot be downplayed.

Performance management is an on-going process of communication that supports the strategic objectives of the organisation, as well as those of the individual, while enabling organisations to work towards maximum productivity of the workforce. Although it ensures outputs are retained at a high level, the additional benefits for both staff and employers are substantial. Here are the top five benefits performance reviews bring to an organisation:

1.    Better understanding of job expectations

It is undisputed that ambiguities in the workplace result in a lack of productivity. For both employees and management to have clarity and accountability in the expectancies of their roles, the importance of two-way communication cannot be stressed enough. This process not only clarifies goals and expectations but also builds a transparent and friendly work environment, empowering employees to realise their full potential.

2.    Increased motivation

Employees can often become stuck in the day-to-day routine inherent in their positions. Settled in the comfort of their regime, they may lack the drive to succeed. Performance management ensures that this cycle does not arise, as receiving regular feedback on current performance and future prospects can inspire employees to develop their career paths. With greater drive and self-motivation, they will work more productively, becoming committed to the organisation and achieving their potential.

3.    Improved relationship with management

In large corporations employees often feel they are just a number among a sea of staff. This is especially true in organisations with a clearly divided structure, segregating senior management and lower level employees from communicating on a personal level. Having a performance management system in place that enhances engagement and openness enables employees to understand their value and contribution to the company’s strategy. As a result, they feel more able to discuss problems openly with management, who can rectify issues before they escalate.

4.    Continuous career development

When employees are not achieving targets and potentially lack the skills to perform in their roles, reviews support managers in finding the root cause of these problems and ensure potential weaknesses are addressed. Regular conversations also provide employees with the opportunity to discuss the direction of their career development and the skills they would like to develop, ensuring that appropriate training or a step-by-step plan can be allocated. This process becomes more effective when managers incorporate employee appraisal and recognition, striking a balance between employees’ weaknesses and strengths to guarantee they maintain confidence in fulfilling the expectations within their roles.

5.    Employee engagement

Improved performance and retention rates are at the heart of employee engagement, but ultimately it is a two-way process. While staff must receive feedback on how they are doing, they should also have the opportunity to discuss whether the organisation is meeting their expectations. When employees know that their work has a purpose and are recognised and rewarded for their successes, performance management tactics will ultimately support higher retention rates and enable employees to become more empowered within the workplace. As a result, their commitment to the organisation, its goals and values will be maintained and organisational success will pursue.